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Abstract: A multidisciplinary team of researchers made efforts to influence the design and implementation of environmental policy in Australia. A focus of these efforts was the development of the Investment Framework for Environmental Resources (INFFER). In addition, the team undertook a range of communication activities, training, user support, and participation in committees and enquiries. Transaction costs were relevant to these efforts in a variety of ways. Environmental managers perceived INFFER to involve relatively high transaction costs. A balance was struck between the system having simplicity (and low transaction costs) and delivering environmental benefits. Transaction costs were factored into the planning and prioritisation processes developed. For example, public and private transaction costs are accounted for in the calculation of benefit:cost ratios and in the choice of policy mechanisms. There are diverse roles that transaction costs play in the processes of developing, implementing and influencing environmental policy programmes. A key observation is that appropriate strategic investment in transaction costs can improve decisions and increase net benefits from an environmental programme. A well-designed decision process can involve incurring transaction costs at one stage in order to save transaction costs at a later stage. [Copyright &y& Elsevier]

Abstract: Environmental policy instruments generate transaction costs to public and private parties. There is a growing literature reporting on the size of transaction costs produced by environmental policy instruments. This paper extends that literature through an analysis of the factors that influence transaction costs in environmental policy and how this influence occurs. The theory based factors that influence transaction costs are categorised as: 1) transaction characteristics; 2) transactor characteristics; 3) nature of the institutional environment; and 4) nature of the institutional arrangements. We examined how these factors influenced transaction costs through the analysis of two Australian-based development offset schemes with different policy designs. We found evidence of all four theory-based categories of influence in the policy case studies. The degree of influence and how each factor influenced transaction costs varies across the two policies and between parties. Policy design as a component of the institutional environment had a particularly large bearing on transaction costs of offset buyers and the policy administrator. An important contribution to transaction cost theory assumes the institutional environment as given. [Copyright &y& Elsevier]

Despite the popularity and rhetoric of collaborative approaches, the successes of such initiatives are not widespread and remain elusive. Some commentators argue that without ‘the noise of participation’, a return to centralised governance should be reconsidered. Whilst this conclusion may be premature given the lack of rigorous analysis of collaborative approaches, it calls for a closer examination of contexts and processes that are conducive to the success of collaborative initiatives. This paper evaluates the scope of collaborative watershed management and planning in the Howard River Catchment in northern Australia. The findings depict the challenges of collaborative planning in a nested hierarchy with multiple institutions. The existing institutional apparatus can potentially constrain the collaborative initiatives to water planning. They include the norms of agency authority, administrative inflexibility and power structures in a nested institutional hierarchy. Delegating decision making responsibility to decentralized structures should be backed up by the development of the capacity of such structures. Considerable transaction costs exist in overlaying collaborative approaches across a nested hierarchy of multiple institutions. [Copyright &y& Elsevier]

The assessment of sustainable development is often based on the three pillars of sustainability model using social, economic and environmental indicators. It is thought that by measuring the performance of each system, information can be gained about the sustainability of the whole system. However it seems there has been no attempt to evaluate if such an assumption is true. During the development of a sustainability assessment framework for south west Victoria, Australia, it has become evident that this approach to sustainability assessment does not provide an accurate assessment of system sustainability. The project found that environmental indicators were considered the most important for assessing regional sustainability. As a consequence, the assessment produced shows that in south west Victoria, sustainability is largely determined by the condition of the environment. This finding highlights the current disconnection between the theory and reality of sustainability. Here, we describe a framework for sustainability assessment that attempts to re-connect theory to practice. [Copyright &y& Elsevier]

There is a growing literature reporting the extent of transaction costs for environmental policies. However understanding why transaction costs occur and why they are small or large is also important for efficient policy selection and evaluation. Following an analysis of the organisational economics literature and reports of the extent of transaction costs for a number of environmental policies, three key influences to transaction costs in environmental policies are identified. These are the following: 1) the characteristics of the transaction for the environmental good; 2) the nature of the transactors; and 3) the current institutional environment and arrangements. These affect transaction costs to the government and all other parties influenced by a policy. Transaction costs occur due to actions of information collection and policy design, policy enactment and establishment, implementation and contracting, administration and monitoring, and enforcement. An interrogation of transaction cost influences reveals that: 1) the influence varies between parties and is affected by the actions and interactions of and between all parties to a policy; 2) how transaction costs are experienced varies across time; and 3) who experiences transaction costs depends on the policy itself. Future policy selection and refinement will benefit from empirical analysis of the causes of transaction costs. [Copyright &y& Elsevier]

For some environmental assets in rural areas, the landholders who are having the biggest impact are people with small holdings and an emphasis on lifestyle rather than commercial gains from their land. This paper aims to better understand the motivations and likely responses to policy for lifestyle landholders in Australia, in order to assess which policy mechanisms, if any, are likely to be most efficiently used to influence their land management. Through face-to-face interviews, we find that lifestyle landholders have important differences from commercial farmers, including much smaller properties, a stronger interest in environmental outcomes, a lack of land-management skills and a lack of time for land-management activities. From the perspective of environmental policy programs, engaging with lifestyle landholders is likely to involve higher transaction costs, and there are likely to be higher learning and transition costs per unit area. A framework for selection of policy tools is modified to take account of these findings. It is concluded that the prospects for worthwhile public investments in land-use changes by lifestyle landholders are lower than for commercial landholders. [Copyright &y& Elsevier]

Abstract: Irrigation can have a significant negative impact on the environment. Policies available to regulators to reduce the impact of irrigation include externality taxes and levies. In 2002 the Victorian Government introduced a system of salinity levies in the irrigation regions of Sunraysia, northern Victoria. These levies differ from typical taxes because they also introduce trade barriers between certain locations. These trade barriers may increase the cost of reducing salinity. We use experiments to compare the salinity levy with trade barriers to an alternative salinity tax which removes the trade barriers and replaces them with a tax that reflects the relative difference in cost of trading water between impact zones. Our experimental testbed results show that the salinity tax reduces the cost of salinity interception by the government by 75% as compared to the salinity levy. We observe water prices do not increase when regulation is introduced, this may be because the introduction of taxes and levies encourages buyers to act more aggressively preventing sellers from extracting surplus on trades. Further, the introduction of regulation does not increase variability in average outcomes for these markets. [Copyright &y& Elsevier]

Abstract: This paper introduces water accounting as produced by the Australian Bureau of Statistics (ABS). It provides information about the ABS Water Accounts and highlights the many other organisations involved in the provision and use of water related data in Australia. The ABS Water Accounts have built upon previous reports on Australian water resources and the System of Environment and Economic Accounting [UN (United Nations) 2003. Draft Handbook Integrated Environmental and Economic Accounting. Studies in Methods, Series F, No. 61, Rev. 1. United Nations, European Commission, International Monetary Fund, Organisation for Economic Cooperation and Development, World Bank. New York.]. Information from the ABS Water Accounts is presented along with examples of their use in economic analyses designed to inform public debate and government decision-makers. A key feature of the Australian environment is that water is relatively scarce when compared with other inhabited continents. Rainfall displays a high level of spatial and temporal variability and droughts are common. In 2004 an Intergovernmental Agreement on a National Water Initiative (NWI) was reached by Australia''s national and eight state and territory governments. The NWI aims to address environmental, economic and social concerns about the current and future state of Australia''s water resources. The NWI specifically calls for the preparation of annual water accounts, which clearly indicates the expected usefulness of national and regional water accounts. [Copyright &y& Elsevier]

Abstract: This paper reviews the development of ecological economics in Australia and New Zealand since its beginnings in the late 1970s. A historical account is presented that focuses particularly on the activities of the Australia New Zealand Society for Ecological Economics and key ecological economics research activities. Achievements of ecological economics in Australia and New Zealand are assessed, using a range of quantitative and qualitative data. The main areas of expertise developed by Australian and New Zealand ecological economists were found to be: theoretical foundations and visions for ecological economics; biodiversity and resilience; input–output analysis; heterodox valuation approaches; analysis of economy–environment interactions; sustainability indicators; sustainable agriculture, fisheries and oceans; and energy/thermodynamics. Both countries are ranked at the top (or near the top) of the world rankings in terms of per capita ISEE membership and publication rates in Ecological Economics. A defining feature of ecological economics in Australia and New Zealand has also been its practical and problem-solving focus and the level of end-user engagement. The paper concludes by discussing the challenges that face the future development of ecological economics in Australia and New Zealand. [Copyright &y& Elsevier]