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Designing frameworks to deliver unknown information to support market‐based instruments
Author(s) -
Eigenraam Mark,
Strappazzon Loris,
Lansdell Nicola,
Beverly Craig,
Stoneham Gary
Publication year - 2007
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2007.00250.x
Subject(s) - agency (philosophy) , environmental economics , scale (ratio) , production (economics) , environmental resource management , business , environmental quality , desk , joint implementation , environmental impact assessment , emissions trading , environmental science , economics , computer science , greenhouse gas , microeconomics , geography , philosophy , ecology , cartography , epistemology , biology , operating system , political science , law
This article reports on an Australian auction to procure multiple environmental outcomes: EcoTender . EcoTender uses a Catchment Modelling Framework (CMF) to estimate the impact landholder actions have on carbon, terrestrial biodiversity, aquatic function (water quality and quantity), and saline land area. This framework solves the problem of linking paddock‐scale land use and management to catchment‐scale environmental outcomes. This is the first time a market‐based instrument has been fully integrated from desk to field with a biophysical model for the purchase of multiple environmental outcomes. A multiple outcome auction provides several new economic and scientific challenges. This article discusses the EcoTender approach to incorporating agency preferences, modeling the joint production of environmental outcomes and reporting environmental scores. Results indicate that linking EcoTender to the carbon market reduced the cost of procuring the environmental goods by 26%. Further, preliminary estimates show that the environmental gains from scoring the joint production of multiple outcomes are between 30% and 50% to the agency.