IMAGE: Some tourism-based industries, such as dive and day boat trips in the Great Barrier Reef, pay a bond to operate in environmentally sensitive areas. Image: Matt Curnock.
Incentive-based management is increasingly being used to manage industries that interact with the environment.
Fundamental to the concept is the notion that environmental damage could be reduced if the costs were borne by the individual or industry responsible. Appropriate incentives – either an explicit price (such as a tax) or a market-based opportunity (such as a tradeable quota) – can provide efficient ways to reduce or limit environmental damage.
Incentive-based marine management has largely been limited to fisheries quotas. These have been applied to limit turtle and mammal bycatch in the United States, Canada and New Zealand with mixed success, partially due to quota type and low-frequency species interactions. Some tourism-based industries pay a bond to operate in environmentally sensitive areas (such as dive and day-trip boats in the Great Barrier Reef).
This research explored the potential for incentive-based management to limit environmental damage in two areas: the dumping of dredge spoils at sea, and interactions between fisheries and high-conservation-value species and habitats.
Approach and methods
The research was largely review-based, with a qualitative assessment of how a range of existing Commonwealth and State incentive-based measures may work (in the dredging and fishing industry), and an exploration of how different instruments might change these incentives. International experiences in marine environmental management were also reviewed. In the case of fisheries impacts to habitats and species, most reviewed studies were largely theoretical or model based, as relatively few countries have adopted incentive based management approaches for non-target species or habitats.
In the case of dredging, Commonwealth and State legislation is largely based on a permit system, the granting of which depends on the expected environmental impact. Once approved, it generally provides no incentives to minimise the quantity of spoils dumped at sea. In some cases, limits on the amount of spoils are set as part of the approval process. Based on other studies, a combination of a bond and levy based system to provide incentives to minimise the impact (in terms of volume and where dumped) was considered an optimal outcome. An offset system should form part of the package.
In the case of fisheries environmental impacts, the optimal incentive-based management measure depended on the frequency of impact and the impacted matter. For infrequent bycatch species (such as seabirds), a levy based system was most likely to be effective, but this approach has had little international application internationally due to a reluctance to use tax-related management measures. In contrast, for high-frequency bycatch species, individual quotas offered benefits. For habitats, assurance bonds and/or insurance based systems were most appropriate when impacts were relatively infrequent. Model based analyses suggest individual habitat quotas were likely to be most suitable when impacts were likely to be frequent.
Outputs and outcomes
This research has clarified the potential of incentive-based measures as tools for policy makers. It has provided guidance on incentives faced by commercial operators with respect to unpriced outputs of the production process, and the measures available to manage these, as well as mixes of incentives appropriate for specific circumstances.
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