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- Materials and methods
Identifying and solving conservation management problems is rarely the sole domain of ecology. In many cases, development of strategies and solutions requires the integration of knowledge of both ecological and economic systems (Naidoo et al. 2006; Watzold et al. 2006). Often there are distinct options for action, e.g. habitat creation vs. restocking populations, active vs. passive revegetation and restoring natural flows vs. engineering solutions. Decisions can then be made by balancing the trade-off between the cost and the risk of failure of a particular option (Newburn et al. 2005; Naidoo et al. 2006). The more expensive, high-input option does not necessarily provide a better outcome every time, but it may be more likely to provide some positive outcome rather than outright failure. In contrast, an inexpensive low-input option may fail in many cases, but occasional successes may be considerable. Clearly, strategies that are inexpensive yet assure success should be adopted universally, whereas strategies that are expensive and are unlikely to achieve their objective will rarely be favoured. Competing options are likely to be arrayed along this trade-off matrix, yet we often know little about the nature of this trade-off, which may vary systematically across situations (Naidoo et al. 2006).
In many conservation and restoration problems, the relevant costs are the direct costs of implementation, e.g. purchase of land or property rights, purchase of seed or seedlings and ongoing management costs (e.g. weed control). Yet in some cases, typically where private financial gains are foregone, opportunity costs may be at least as important (Main, Roka & Noss 1999; Pannell 2004; Naidoo & Adamowicz 2006). Examples include fishing moratoriums to enable fish stocks to recover or the case we consider here, resting land from agricultural use to allow revegetation. Risk aversion and short-term focus on the part of managers, combined with uncertainty about if and when ecological benefits may be realized, could lead to selection of suboptimal strategies with high cost but offering high probability of short-term success ahead of low-cost options that have similar probability of success, but over the long term. Our purpose in this paper is to understand the nature of the trade-off between cost and risk of failure of ecological restoration activities and how to make better ecological management decisions.
Making sensible decisions about allocation of resources between alternative restoration actions requires a systematic approach (Possingham et al. 2001). The probable outcomes and decisions between them are dependent upon an interaction between the ecological and economic systems, thus requiring a coupled economic and ecological model. Ecological uncertainties resulting from spatial and temporal variation in environmental factors will flow through to economic consequences.
In agricultural landscapes across the world, conservation reserves are limited. Often native species are not restricted to protected areas and their persistence in landscapes depends upon the condition and management of private land (McIntyre & Hobbs 1999; Donald & Evans 2006; Manning et al. 2006). In many places, farmers are undertaking restoration activities, both with and without direct financial support from government, to mitigate environmental degradation, such as biodiversity loss and altered ecosystem processes (Abenspeg-Traun et al. 2004). An important conflict in conservation decisions in agricultural landscapes is that agriculture is the primary and ongoing land use responsible for income generation and conservation benefits are achievable only within this production context.
a case study of australian temperate grazing lands
In grazing lands of southern Australia, clearing of woodland and forest vegetation underlies widespread declines in biodiversity, soil stability and changes to hydrology that have led to secondary salinization (Yates & Hobbs 1997; Anderies, Ryan & Walker 2006). In most regions little intact remnant woodland or forest persists, although scattered trees, over a native- or exotic-based pasture, are widespread (Manning, Fischer & Lindenmayer 2006) but declining (Ozolins, Brack & Freudenberger 2001). Restoration of tree cover is necessary to minimize, if not reverse, these adverse changes (Vesk & MacNally 2006). Currently the Australian state and federal governments and private landholders invest tens of millions of dollars annually in revegetation and associated activities (Natural Heritage Trust 2005). Despite the scale of investment, at regional scales the ecological outcomes have been limited and poorly assessed (Freudenberger, Harvey & Drew 2004)
Importantly, all restoration occurs within economic constraints. For Australian grazing enterprises, the economic margins are very small, and in any given year up to two-thirds of farms are not profitable (Martin et al. 2005). While, in recent years, government assistance for environmental works has been substantial, it is almost exclusively for capital costs, i.e. fencing and tree planting and involves a cost-sharing arrangement. Within Australia assistance for forgone income due to lost opportunity of grazing has been largely ignored (although see below). Because forgone income is potentially large (Crosthwaite & Macleod 2000; Sinden 2004), allocation of land to revegetation and away from grazing has been limited.
Incentive and stewardship schemes have been developed in several countries to offset foregone income. In the United States the Conservation Reserve Program (CRP) was established in 1985 to take croplands out of production by providing payments to landholders, with a reserve price (the minimum acceptable value) based on the rental value of the land (Reichelderfer & Boggess 1988). In most cases CRP lands are also revegetated with native vegetation. In the European Union agri-environment schemes provide fixed-price payments to farmers for activities such as extensive management of grasslands. The payments are, however, not linked to probable conservation outcomes, and assessing the cost-effectiveness of these schemes is problematic (Kleijn & Sutherland 2003). In Australia there is growing use of auctions for conservation outcomes, with selection of successful bids based on estimates of the conservation value of the land, estimated improvement in habitat and the bid price (Stoneham et al. 2003; Hajkowicz et al. 2007). Conservation auctions have been used for management of existing remnant vegetation and to manage land to increase the likelihood of overstorey tree recruitment.
context for the problem
The problem we consider is of a land manager aiming to restore tree cover on a paddock (field) for the least possible total cost while achieving the greatest success. There are two broad options: active revegetation, which we split further into planting seedlings (tubestock) or direct sowing of seed (direct seeding); and passive revegetation via unassisted recruitment of seedlings resulting from seed dispersed from existing mature trees (also known as natural regeneration). Optimal decisions are likely to differ across farms due to the systematic variation in the probability of successful revegetation and costs of forgone income, which depend upon inherent productivity and stocking capacity.
Active revegetation via tubestock or direct seeding is often recommended, citing high success rates, yet these methods can be expensive and labour-intensive (Schirmer & Field 2001). Natural regeneration is promoted as a cheaper and less labour-intensive form of revegetation (Cluff & Semple 1994) and it has been suggested that it could make considerable contributions to increased landscape tree cover (Cluff & Semple 1994; Dorrough & Moxham 2005). Comparisons of the two methods have only considered direct costs: estimates of foregone income have rarely been examined (Schirmer & Field 2001). The likelihood of achieving the desired outcomes from natural regeneration has been modelled recently (Vesk & Dorrough 2006) and provides the basis for contrasting the options. Here we analyse the problem of how to act in different situations.
Revegetation targets may be set at a regional level (appropriate for biodiversity, ecosystem processes). However, the decisions are made by individual land managers at the scale of individual farms or fields. There are important questions about how best to achieve regional scale outcomes when the decisions are made at smaller scales by multiple managers operating somewhat independently, but these are beyond the scope of this paper. Nevertheless, the question of how best to revegetate on a particular farm will be a central part of any regional scale planning. Estimating costs of revegetation will enable development of effective strategies for achieving such regional-scale objectives.
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- Materials and methods
Opportunity costs can be a significant barrier to conservation and restoration activities on private lands. Here we have shown how systematic variation in those costs (relative to direct costs), driven by the economic productivity of the land and ecological processes that influence eucalypt recruitment, determines the suitability of alternative activities (here passive vs. active revegetation). Uncertainty in ecological, and hence economic, outcomes makes decisions about which strategy to implement difficult, but its effects can be incorporated when solving the problem. Where temporal uncertainty of success is considerable longer time-frames need to be considered, with implications for the design of assistance schemes. In the specific case study here, productivity or stocking rate affects systematically the decision of which strategy to implement.
If sapling escape is achieved before 15 years the land manager can restock early, thus reducing the opportunity costs of forgone income. This will impel the land manager to manage for increasing the probability of sapling escape. Clever management to increase the probability of sapling escape, e.g. preparing a seedbed or controlling competitive effects through biomass removal by grazing or fire, will reduce the risks of passive revegetation failing but will also increase the direct costs substantially, making it more equivalent to direct seeding. However, we must not ignore that the weather plays an overwhelming role and management unsupported by suitable rainfall will be wasted (Vesk & Dorrough 2006). An increased understanding of the relative likelihoods of different revegetation strategies will be important in guiding the decision-making process, particularly in low productivity situations.
The analysis presented here considers the problem of an individual land manager choosing the least-cost revegetation strategy on a given field. This question is central to problems faced by regional planners thinking about the probable balance of financial assistance schemes for attaining regional objectives: over high-productivity areas capital works programmes, in conjunction with incentives for foregone income, are cheaper, whereas in low-productivity areas incentive schemes for land retirement will be cheaper. To achieve regional revegetation goals a regional planner may need to invest in a mix of both short-term low-risk, high-cost activities in productive landscapes and extensive, low-cost, long-term strategies in less productive areas.
The case study we describe here also has lessons for the design and delivery of conservation incentive schemes. Certainly a range of approaches will be required to facilitate revegetation across heterogeneous landscapes. The interactive ecological–economic effect of pasture productivity supports the linking of incentive schemes to potential agricultural value of land, although this may need to be balanced with the potential for increased costs and complexity of such an approach. The results also suggest the need for varying management time-frames. At present the majority of government incentives in Australia are in the form of short-term fixed-price schemes, irrespective of the productive capacity of the land, with a cost-sharing arrangement between government and the individual landholder (Pannell 2004). In addition, incentive schemes pay farmers typically for management actions, not outcomes, with the funding agency bearing most risk. This is of lesser concern for active revegetation strategies where success can be achieved rapidly. For passive revegetation, because of the potential for long time-periods without success, contracts may run a greater risk of being broken and additional payments for outcomes may be required.
Even when conservation management activities have the potential to result in long-term economic benefits to the private land manager, a combination of direct costs, negative impacts on net cash flow and uncertain success can be substantial barriers to investment on farms (Goldstein et al. 2006). Although we recognize that tree establishment can have local and wider economic and ecosystem service benefits, for example through provision of shelter for stock, increases in the capital value of the asset and lowering of local water tables (Bird et al. 1992), we excluded these explicitly from our analyses. For an individual manager, these long-term economic benefits are likely to be small and provide limited additional incentive. Even if a landholder decides to revegetate they must then decide which method to apply. Greater understanding of the ecological and economic implications of active and passive revegetation strategies will be important in informing this decision, but other factors could be overwhelming (i.e. past experience, local norms, desired outcomes).
Although the direct and long-term opportunity costs will be a major barrier to investment by individual farmers, the costs we present here could be greater than the incentives required to trigger revegetation on farms (Pannell et al. 2006). In Australia much of the cost of revegetation undertaken through government incentive schemes has been shared by private landholders (Pannell 2004; Pannell et al. 2006). Recent market-based auction schemes have revealed that while some landholders will bid for the full opportunity costs of conservation activities, many are willing to share costs (Stoneham et al. 2003). Other social factors, such as underlying trends in land use, may also contribute to an overestimate. Observations from Europe and North America suggest that passive revegetation is most likely where social, political and economic forces lead to land abandonment (Debussche, Lepart & Dervieux 1999; Eberhardt et al. 2003). Low-productivity landscapes, most suited to passive revegetation, are common throughout south-eastern Australia. Land retirement is likely to be a continuing process in these landscapes and opportunity costs to accelerate such change could be less than we estimate here.
Natural regeneration requires that live mature trees are retained in agricultural landscapes. In southern Australia, where broad-scale vegetation clearing has ceased, the loss of scattered mature trees is still occurring (Ozolins, Brack & Freudenberger 2001; Saunders et al. 2003). While some loss is a function of natural mortality rates currently exceeding recruitment, scattered tree loss has been accelerated due to poor health resulting from pathogens, herbivory and changes in abiotic factors (e.g. salinity) (Landsberg, Morse & Khanna 1990; Reid & Landsberg 2000) and direct removal for agriculture and timber (Maron & Fitzsimons 2007). Although scattered trees in high-productivity landscapes provide considerable ecological functions (Manning, Fischer & Lindenmayer 2006), the results we present here suggest that their persistence in this agricultural context will depend most probably on direct revegetation rather than facilitating natural recruitment processes. Even then the high costs of implementing active revegetation at the scales required to maintain a scattered tree landscape may be restrictive. Current patterns of active revegetation in productive landscapes resemble narrow linear woodlots rather than scattered tree woodlands, arguably to minimize, in part, opportunity costs. In contrast, the loss of mature trees in low productivity pastures will have a substantial economic cost if future options for restoration are restricted to direct seeding or planting of seedlings. The likelihood of retaining a woodland vegetation structure in low productivity landscapes seems greater.