Do outcome or input risks limit adoption of environmental projects: Rehabilitating gullies in Great Barrier Reef catchments

Abstract

A key challenge in agri-environmental policy is to encourage agricultural producers to adopt better management practices to reduce adverse environmental impacts. Research attention around has focused on the underlying drivers of landholder actions and decisions, the costs and returns of improving management practices, and the effects of different policy mechanisms to achieve change. One potential barrier to changing management practices are the risks that agricultural producers may perceive to exist. Outcome risks relate to the possibility that a management change may not achieve environmental goals or anticipated production increases, while input risks relate to the possibility that the costs of management change turn out to be much higher than expected. These risks lead to perceptions of winners' curse, where producers are reluctant to adopt better management practices in case costs are higher and returns are lower than expected. In this paper we test the extent to which the willingness to implement environmental improvements are limited by conservation outcome risks or input risks, using a choice experiment in workshops with landholders. Our case study involved projects to reduce gully erosion and subsequent sediment run-off which it attributed to inshore reef health decline in catchments adjacent to the Great Barrier Reef.