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Testing for allocation efficiencies in water quality tenders across catchments, industries and pollutants: a north Queensland case study

Author

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  • John Rolfe
  • Romy Greiner
  • Jill Windle
  • Atakelty Hailu

Abstract

The design of competitive tenders to purchase environmental services requires judgements to be made about the funding scale and tender scope, with the latter incorporating considerations of geographic area, industries involved and the types of environmental outputs required. Increasing the scale and scope of tenders increases the likelihood that a larger range of proposals will be proposed and cost-effective ones selected. However, the use of larger and more broadly scoped tenders may reduce landholder participation and increase asking bids. In the study reported here, these issues have been tested with a single water quality tender run in north-eastern Australia in 2007 and 2008. Post hoc tests and workshop exercises show that while largerscale and scope tenders can generate efficiency gains, care has to be taken to maintain participation and avoid higher bid levels
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Suggested Citation

  • John Rolfe & Romy Greiner & Jill Windle & Atakelty Hailu, 2011. "Testing for allocation efficiencies in water quality tenders across catchments, industries and pollutants: a north Queensland case study," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 518-536, October.
    • Handle: RePEc:bla:ajarec:v:55:y:2011:i:4:p:518-536
    DOI: j.1467-8489.2011.00557.x
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    Cited by:

    1. M. S. Iftekhar & A. Hailu & R. K. Lindner, 2014. "Does It Pay to Increase Competition in Combinatorial Conservation Auctions?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(3), pages 411-433, September.
    2. Hao Wang & Sander Meijerink & Erwin van der Krabben, 2020. "Institutional Design and Performance of Markets for Watershed Ecosystem Services: A Systematic Literature Review," Sustainability, MDPI, vol. 12(16), pages 1-26, August.
    3. Tongzhe Li & Leah H. Palm-Forster & Siddika Bhuiyanmishu, 2025. "Transaction Costs, Participation, and the Cost-Effectiveness of Reverse Auctions: Evidence from a Laboratory Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(2), pages 397-424, February.
    4. Md. Sayed Iftekhar & John G. Tisdell, 2016. "An Agent Based Analysis of Combinatorial Bidding for Spatially Targeted Multi-Objective Environmental Programs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(4), pages 537-558, August.
    5. Iftekhar, M.S. & Tisdell, J.G. & Connor, J.D., 2013. "Effects of competition on environmental water buyback auctions," Agricultural Water Management, Elsevier, vol. 127(C), pages 59-73.
    6. Rolfe, John & Windle, Jill & McCosker, Kevin & Northey, Adam, 2018. "Assessing cost-effectiveness when environmental benefits are bundled: agricultural water management in Great Barrier Reef catchments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), July.
    7. John Rolfe & Jill Windle & Kevin McCosker & Adam Northey, 2018. "Assessing cost‐effectiveness when environmental benefits are bundled: agricultural water management in Great Barrier Reef catchments," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), pages 373-393, July.
    8. Romy Greiner, 2023. "Examining Participation in and Supply of Private Land for Voluntary Conservation in Australia’s Tropical Savannas: A Discrete-Continuous Choice Experiment," Land, MDPI, vol. 12(7), pages 1-19, June.
    9. Rolfe, John & Windle, Jill, 2016. "Estimating supply functions for agri-environmental schemes: Water quality and the Great Barrier Reef," 2016 Conference (60th), February 2-5, 2016, Canberra, Australia 235510, Australian Agricultural and Resource Economics Society.
    10. Graeme J. Doole & Olga Vigiak & David J. Pannell & Anna M. Roberts, 2013. "Cost-effective strategies to mitigate multiple pollutants in an agricultural catchment in North Central Victoria, Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(3), pages 441-460, July.
    11. Messer, Kent D. & Duke, Joshua M. & Lynch, Lori & Li, Tongzhe, 2017. "When Does Public Information Undermine the Efficiency of Reverse Auctions for the Purchase of Ecosystem Services?," Ecological Economics, Elsevier, vol. 134(C), pages 212-226.
    12. Rolfe, John & Whitten, Stuart & Windle, Jill, 2017. "The Australian experience in using tenders for conservation," Land Use Policy, Elsevier, vol. 63(C), pages 611-620.

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