If you had to decide which projects to fund to improve the quality of water flowing off agricultural land, which would you choose? The cheapest projects? The projects that promised to improve water quality the most? The projects least likely to fail?
There are many ways policy makers approach the problem of project selection but new research from CEED has demonstrated again that framing your choice based on cost-effectiveness is the best way to go. Indeed, the cost-effectiveness framework proposed by Jutta Beher and colleagues can provide solutions that are much more efficient than other approaches that only look at cost or benefit alone.
The CEED research team applied their framework for cost-effective prioritisation to catchment management projects being used to improve water run-off flowing out to the iconic Great Barrier Reef.
The Great Barrier Reef is under threat from agricultural run-off from the adjacent coastline. The water carries sediment, nutrients and chemicals, all of which degrade the reef in various ways. The government is investing resources in changing land management by supporting landholders who are proposing projects on their land such as fencing, improving machinery or planting vegetation along waterways. However, there isn’t enough money to fund all projects. So, how do you choose (prioritise) the best projects?
“The situation is like shopping in a supermarket,” says Jutta Beher, from the University of Queensland.
“There are lots of products you can buy in a supermarket, but we all have finite family budgets. Experienced shoppers know to select products that reliably deliver the greatest benefit for the cheapest price. Simply choosing the cheapest product isn’t always the best strategy because sometimes low cost items are unhealthy or of mixed quality. Being stingy isn’t always the best strategy when your family’s health is at stake. The situation is similar for prioritising projects to protect the Great Barrier Reef.”
When it comes to different catchment management projects, the researchers collected data on the cost of each project, the expected benefit (in terms of reducing the sediment load in agricultural run-off) and the feasibility that this benefit will be realised. Cost-effectiveness is simply the benefit divided by the cost (where expected benefit equals the benefit multiplied by the feasibility – the chance the project will work).
“Many conservation programs choose their projects by prioritising threats, locations or species,” observes Beher.
“In a sense they are comparing benefits – the expectation that a specific threat will be addressed, or an area fixed up or a species saved – without including the costs or the feasibility of specific actions in their decision process. Sometimes we use just one criteria: cost, species richness, or project reliability. All of those one-criterion selection methods are inefficient.”
Beher and colleagues populated their cost-effectiveness framework with 295 catchment projects that have been implemented along the coastline adjacent to the Great Barrier Reef. This allowed them to compare the cost-effectiveness of individual projects and enabled them to determine which subset of projects would achieve the best outcomes in terms of a reduction in sediment. They were also able to compare this cost-effectiveness approach with other prioritisation approaches that focussed on area, benefits or costs alone.
“In reality, there are many more projects across a larger area that have to be decided on, and even larger differences are likely between different prioritisation strategies.”
In addition to highlighting the projects that would give the best return on investment, the framework is easy to use and generates simple graphical outputs to help with project selection.
“Our approach is a very simple, fast and transparent way to help decision makers avoid common mistakes,” says Beher.
“At the same time it enables them to see the options quickly and put them into the larger picture. The main output of the framework is a graph that shows the ranking of options according to their cost-effectiveness. It can also highlight the best projects for specific characteristics and puts a spotlight on the differences between the general cost-effectiveness of a spatial location or targeted industry – in our case-study cattle grazing or sugar cane in different subcatchments.”
And, because the process is simple, anyone should be able to apply it. Beher suggests anyone who can shop well has what it takes to cost-effectively prioritise.
“All you need is the shopping list (a quantifiable objective), and estimated information around your options (cost, benefit and feasibility) to get started,” she explains.
Reference: Jutta Beher, Hugh P. Possingham, Sean Hoobin, Cameron Dougall, Carissa Klein, Prioritising catchment management projects to improve marine water quality, Environmental Science & Policy, Volume 59, May 2016, Pages 35-43, ISSN 1462-9011, http://www.sciencedirect.com/science/article/pii/S1462901116300296