School of Agricultural and Resource Economics

Helena Clayton

Thesis

An investigation of farmer responses to economic incentives for landscape recovery

Summary

My thesis has developed out from the growing interest in the role of environmental markets to address natural resource management problems in Australia. In it, I explore some of the theoretical insights raised in the behavioural economics literature to better understand how farming communities might respond to market-based policies that aim to support their environmental recovery efforts through providing economic incentives.

In particular, I am drawing upon crowding-out theory to investigate the interactions between socially based motivations and economic incentives. I am exploring this through using the Auction for Landscape Recovery (ALR) as a case study.

The ALR is a trial of an auction mechanism which provides economic incentives with the aim of motivating farmers to undertake on-farm projects to achieve specific environmental outcomes. The auction is funded through the National Action Plan for Salinity and is managed by WWF Australia.

Why my research is important

It is a well-established idea in the literature and within policy rhetoric that the social context in which policy instruments are implemented has an important influence on how people respond to the policy, and therefore on the overall success of the policy itself. However, there remains substantial scope for understanding the ways in which the social context affects people’s responses and how this can be translated into changes in the process of policy development, design and choice.

In contributing to learning about the social dimensions of market-based environmental policy my overall objective is to provide recommendations about socially appropriate policy design and choices for engaging farming communities in efforts to achieve biodiversity conservation and salinity mitigation.

Funding

• I would like to thank the Cooperative Research Centre for Plant-Based Management of Dryland Salinity for the financial support provided for my PhD research and related travel.