Carbon Markets and their Implications for Natural Resource Management in Australia

Just as the world must adapt to climate change, it must also adapt to carbon markets. While some industries see carbon markets as a threat, many conservationists see a major opportunity. This paper considers implications of carbon markets for natural resource management (NRM) in Australia. There are in fact a range of distinct, but overlapping carbon markets. These range from international compliance markets (the Kyoto Protocol flexibility mechanisms) through national compliance markets (such as Australia’s proposed emissions trading scheme) to unregulated voluntary markets. While NRM is intimately linked to the global carbon cycle, it has a very limited role in existing and proposed carbon markets. The only significant direct impact likely up to 2015 is a small increase in tree planting. While trees have excellent potential to sequester carbon, the incentives for tree planting will be relatively small, given the limited scope of Australia’ proposed emissions reductions and the ability to import carbon credits from international markets. NRM managers should continue to manage carbon as one of a suite of issues without expecting rivers of gold to flow from carbon markets. Some may choose to participate directly in carbon markets, although this is inherently risky given their ill-defined and rapidly evolving nature. There is a need to develop improved understanding of carbon stocks and flows in the landscape, at both national and local scales. New institutions will be needed to secure carbon opportunities from agriculture and land management while also recognising other social and environmental objectives.carbon trading, emissions trading, environment, agriculture

Experimental Economics: Applications to Environmental Policy

Incentives, regulations and other policy interventions intended to promote sustainability work through influencing human behaviour. There is therefore much to be gained from a thorough understanding of exactly how various policy interventions relate to the decision-making process. Experimental economics, and the closely related fields of behavioural economics and behavioural finance, apply an empirical approach to study how people act when faced with a range of economic and social scenarios. The experimental approach was pioneered by Vernon Smith and Daniel Kahneman and others, building on early studies by Chamberlin (1948). In recognition of this work, Kahneman and Smith were awarded the 2002 Nobel Prize in Economic Sciences. This paper briefly reviews the applications and methods of experimental economics, relates some key research findings and describes some examples of its use in informing environmental policy.Experimental economics, Behavioral economics, Environmental economics, Environmental markets, Market-based instruments, MBIs

MARKETS, MOTIVATIONS AND PUBLIC GOODS: EXPERIMENTAL INVESTIGATIONS ON THE IMPACT OF INSTITUTIONS

There are many factors which can motivate people to contribute to public goods. These range from intrinsic motivations such as altruism, through social motivations such as concerns for fairness and approval, to extrinsic incentives which include sanctions and payments. Institutions help determine how these motivations are applied and expressed. Psychological studies indicate that extrinsic incentives can crowd out the intrinsic motivations which prompt voluntary contributions to public goods. We applied experimental economics techniques to examine how people in a public good dilemma respond to changing institutions. Our results showed that the introduction of formal institutions (a regulation and competitive tender) crowded out voluntary contributions, with the supply of public good increasing less than anticipated, and in some circumstances actually decreasing. In particular, the introduction of the competitive tender triggered a ‘market instinct’, with participants who previously had been expressing social preferences now seeking to maximise profits. The effects of crowding out persisted even after an institution was removed, suggesting that it may be difficult to reverse. We conclude that policy makers should tread carefully when considering formal institutions to promote public good provision, particularly where desired actions are already occurring voluntarily to some extent.

Putting Theory into Practice: Market Failure and Market Based Instruments (MBIs)

The use of market-based instruments (MBIs) to provide and protect ecosystem services has gained significant attention in Australia. Despite their popularity, MBIs are not appropriate for the provision of all ecosystem services. Rather, MBIs must be carefully designed given the ecosystem service outcomes desired, while meeting the needs of participants. In this paper we detail the importance of a robust theoretical structure to underpin the selection and design of an MBI. In particular, we demonstrate the role of identifying and analysing the nature of the market failures present, and their implications for instrument design. Our conclusions are illustrated using several regional MBI case studies.Market Based Instruments (MBIs), ecosystem services, conservation

An Experimental Approach to Comparing Trust in Pastoral and Non-Pastoral Australia

It is generally held that rural Australians are more cooperative in character than their urban counterparts. To explore one aspect of this notion, we conducted an experiment which compared trust and trustworthiness among a sample of Australian senior high school students which included students with both pastoral and non-pastoral backgrounds. While student behaviour is unlikely to mimic adult behaviour, any significant differences between pastoral and non-pastoral students would suggest differences do exist between the social norms that guide pastoral and non-pastoral communities. We repeated our experiment at three different schools containing students from both pastoral and non-pastoral backgrounds, allowing us to draw comparisons. In total 78 students participated. Our experiments were based on similar experiments that have been applied across a range of contexts internationally (trust game/investment game). We did not find evidence of differences between students with pastoral and non-pastoral backgrounds, either in the level of trust in others or in trustworthiness, though our methods probably have a bias towards this conclusion. Our results concurred with other studies in showing that social distance is an important determinant of the level of cooperation.rural urban relations, economic behaviour, culture, arid zones, semiarid zones, pastoral society

Experiments with regulations & markets linking upstream tree plantations with downstream water users

Land-use change in upper catchments impact downstream water flows. As trees use large amounts of water the expansion of upstream plantations can substantially reduce water availability to downstream users. There can also be impacts on downstream salinity due to reduced dilution flows. In some jurisdictions afforestation requires the purchase of water rights from downstream holders, while in others it does not, effectively handing the water rights to the upstream landholders. We consider the economic efficiency and equity (profitability and distributional) consequences of upstream land use change in the presence of a water market under alternate property rights regimes and different salinity scenarios.experimental-economics, tree-plantations, environmental-services, urban, irrigation, stock & domestic, water use, land use,

Microreflectance and ellipsometric studies on the polished surfaces of some minerals

The optical properties of a series of ore minerals are assessed using microscope photometry and ellipsometry. Results from both methods are compared and any discrepancies in the data are Interpreted within the experimental and instrumental constraints of the two techniques. The errors involved in the calculation of reflectance and the optical constants n and k are also considered. A new type of microphotometric error known as the Standard-Specimen-Reflectance-Difference-Phenomenon (SSRDP) is investigated, its possible causes are discussed and tables evaluated for its correction. The results of this study are compared with those of other workers and differences between the measurements are discussed within the context of electronic, structural and impurity ion considerations. Where possible, spectral maxima are assigned to electronic and/or excitonic transitions and ideas are advanced to rationalise some of the observed reflectance dispersions. The use of spectroscopic ellipsometry in this investigation makes it possible to assess the effects of alr-formed or other contaminant films. The influence of specimen preparation on the optical characteristics is discussed and the importance of using 'real surfaces' in order to make possible the geological and commercial application of this study is emphasised