NSW Environmental Services Scheme

Natasha Herron - DIPNR NSW

Markets for Environmental Markets for Environmental Services Services -- Why?Why?

We are aiming to: • value environmental services• create new income streams for rural producers• encourage adoption of activities that provide environmental services into farm plans• achieve balance between production and conservation, with economic viability

ý Consistent with salinity & other targets within catchment blueprints

What is happening in NSW What is happening in NSW

• Institutional/Policy Frameworki Devolve NRM to local communities (eg. CMAs)i Legislate to protect native vegetationi Provision of $$$ to drive incentive schemes and funding allocations. i Promote positive Land Use Changes (LUC) and BMPsi Develop marketsi Shift from Govt resource inventory => modelling using available

info

• Assessment Proceduresi Development of models/tools to assess environmental benefits i Development of indices for individual servicesi Integrated Environmental Benefits Indexi Monitoring guidelines for evaluating impacts of LUC

• Conservation and Incentives Schemesi Range of different projects under way

NSW Environmental Services ProjectsNSW Environmental Services Projects

Land Use Change• TARGET - Central West• Heartlands - Murray/Murrumbidgee• Liverpool Plains project

Voluntary Schemes • Conservation Partners Program (DEC)

• VCAs, Wildlife Refuges, Land for Wildlife

Incentives Schemes • Environmental Services Scheme• Enterprise Based Conservation (West 2000)• PVP Incentives

Environmental Services Scheme Environmental Services Scheme -- OverviewOverview

• First stage of broader ES market development program

• $2M for on ground works

• 20 ‘sites’• properties or groups of properties• focus on areas of salinity & coastal acid sulfate soils• also biodiversity, carbon, soil and water ‘services’

• Explore practical issues in developing ES markets• quantifying the value of ES • costs of including ES in rural production• define and create ownership of services• what financial, contractual and incentive arrangements needed

• ‘Learn by doing’ and invest along the way to solve problems

Summary of Responses

• 150 EOIs received

• Shortlisted down to 75 applicants

• 54 received

Express interest

Final applications

Landholders Selected

Shortlist

Contract Sign-up

• 20 sites involving 25 landholders

• 15 salinity, 5 acid sulfate soils

• 24 contracts signed

ESS ESS -- From EOI to ContractsFrom EOI to Contracts

ESS ESS -- ShortlistingShortlisting

Procedure for Expressions of Interest

Checklist• within priority areas• income derived mainly from farming• suitable land use changes• integrated farm plan• demonstration value of site

Estimate of potential environmental benefits• ranking by Technical Working Groups• scaled up by area of LUC• comparison of total benefits

è Short-listed applicants submit detailed applications

• Establishment + Improved management of deep-rooted perennial pasture

• Environmental plantings of native species• Regeneration of native vegetation• Commercial plantings of native or exotic species• Establishment of saltbush• Engineering solutions • Re-establish wetland or estuarine function

ESS ESS -- Suitable Land Use ChangesSuitable Land Use Changes

ESSESS -- Assessment Assessment of Shortof Short--Listed ApplicationsListed Applications

Site Visits - data collection, assistance with property plans

Calculation of index for each individual service

• Salinity Benefits Index (non-ASS sites)• Biodiversity Benefits Index• Storage of Carbon• Soil and Nutrient retention• Reduction in acid exports (coastal only)

Integration into single Environmental Benefits Index (EBI)

• Individual indices normalised• based on sample population

• Added together è EBI• equal weighting to each index

• Total Score• EBI• demonstration value of site • cost effectiveness of bid

è Ranking• Other considerations

• geographic spread• representation of specific enterprises• full range of ‘suitable’ land use changes

EBI - Costing and Ranking

Enterprise Based Conservation Sites

ESS ESS -- What have we What have we gained?gained?

Land use change á c. 11,000 ha

• Total Cost á $2.1 million• Area cost á $190/ha

5 year contracts á Expectation of long term (enduring) change

Access to landholders and properties á experience, sites, monitoring & promotion

Experience in implementing tender-based incentive programs

0

10

20

No. of Sites

Land Use Change

No. of Sites 19 15 6 19 14 4 3 3

Est Imp Comm Env Regen Saltbu Eng Wet

ESS Sites by Land Use ChangeESS Sites by Land Use Change

0

2000

4000

6000

Total Area (Ha)

Land Use Change

Tot Area LUC 2879 5212 104 703 764 68 757 496

% Tot Area 26 47 1 6 7 1 7 5

Est Imp Com Env Rege Saltb Eng Wet

ESS ESS -- Total Area of Land Use ChangeTotal Area of Land Use Change

050,000

100,000150,000200,000250,000300,000350,000400,000

Total $

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Qtr 3 02/03 - Qtr 3 07/08

ESS ESS -- Contracted Quarterly Payments ($2.1M)Contracted Quarterly Payments ($2.1M)

Environmental Services Scheme - the future

• Implement monitoring program for toolkit

evaluation, reporting & compliance

• Business planning & financial analysis

• Pasture management strategies and monitoring

• Promote use and understanding of EBI &

integrated decision support tools - e.g. LUOS

• Implement at operational scale through CMAs

(PVPs, incentive schemes)

• Work on demand side - additional buyers,

private investors

Environmental Services - Market Context

‘How will the ESS &EBI help in creating

markets forenvironmental

services?’

Work with landholders to:

•identify waysto define environmentalservices

•investigate ways toestimate, measure and trackenvironmental services asthey are produced

Work with landholders to:

•consider ways to separate theownership of environmental servicesfrom land title, and from each other

•develop the contracts needed to support tradeable rights’

Legal framework

Available information

Trading rules

Institutional a rrangements

Defined market

Defined product