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Comparing a best management practice scorecard with an auction metric to select proposals in a water quality tender

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  • John Rolfe

    ()
    (Faculty of Business and Informatics at Central Queensland University, Australia)

  • Jill Windle

    ()
    (Faculty of Business and Informatics at Central Queensland University, Australia)

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    Abstract

    The focus of this paper is to compare different evaluation frameworks for selecting landholder proposals to improve water quality. The case study is a water quality tender performed in the Burdekin region in Northern Australia in 2007/2008 where bids could be assessed using an inputs-based best management practice scorecard or an outputs-based auction metric. The scorecard approach and other variants of multi-criteria analysis are commonly applied in grant schemes, where landholder proposals are rated by a range of inputs-based criteria. Output-based approaches are typically applied in water quality and conservation tenders, where an environmental benefits index is constructed to summarise the cost-effectiveness of each proposal. The case study evaluation reported in this paper demonstrates that multi-criteria analysis type assessments are flawed, and that the efficiency of public funding can be more than doubled by using auction metrics to assess proposals for landholders to improve water quality.

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    File URL: https://crawford.anu.edu.au/research_units/eerh/pdf/EERH_RR43.pdf
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    Bibliographic Info

    Paper provided by Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University in its series Environmental Economics Research Hub Research Reports with number 0943.

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    Date of creation: Dec 2009
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    Handle: RePEc:een:eenhrr:0943

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    Keywords: water quality tender; auction metric; best management practice; input-based; output-based; Great Barrier Reef;

    This paper has been announced in the following NEP Reports:

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    1. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
    2. W√ľnscher, Tobias & Engel, Stefanie & Wunder, Sven, 2008. "Spatial targeting of payments for environmental services: A tool for boosting conservation benefits," Ecological Economics, Elsevier, vol. 65(4), pages 822-833, May.
    3. Uwe Latacz-Lohmann & Carel P. C. M. Hamsvoort, 1998. "Auctions as a Means of Creating a Market for Public Goods from Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 334-345.
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