INFFER – applying economics in environmental management
The Investment Framework for Environmental Resources (INFFER) is a set of tools and frameworks that has redirected investments worth tens of millions of dollars by methodically demonstrating the value for money, or lack of it, in environmental project options. Since 2011, 20 of Australia’s 56 regional environmental management bodies have undertaken training in INFFER and are now using it to develop, evaluate and prioritise environmental projects. INFFER helps managers assess and rank environmental and natural resource projects and provides a framework for economic thinking in the decision processes. Impacts have been seen in greater environmental benefits through better design and prioritisation of environmental projects in publicly funded programs.
Impact Case Study
Funding for public environmental programs is very small relative to the number and scale of environmental problems. To deliver the most valuable environmental outcomes requires careful targeting of funds to the projects most likely to deliver a successful outcome, but identifying these projects is challenging. It requires decision makers to integrate economic, biological, physical, social and policy information in a decision-making framework. In practice, few programs succeed in this difficult task. As a consequence, environmental programs are often criticised for being unclear about their objectives, poor project prioritisation, using inappropriate policy mechanisms, and being unable to demonstrate environmental benefits.
INFFER is a set of tools and frameworks developed by researchers led by UWA Professor David Pannell which provides environmental managers and policy makers with the means to select and design projects that deliver the most valuable environmental outcomes with the funds available. Since 2011, 20 of Australia’s 56 regional environmental management bodies have undertaken training in INFFER and are now using it to develop, evaluate and prioritise environmental projects. Government agencies in three states have also been trained in using the framework. For some, INFFER has become central to the way they do business. In the North Central Catchment Management Authority (Victoria) INFFER has been deeply embedded in the organisation, influencing all decision processes and the culture of the organisation.
Use of INFFER has helped organisations to improve their quality of environmental decision making to deliver better outcomes for the community. INFFER has redirected environmental investments worth tens of millions of dollars by demonstrating the value for money, or lack of it, of the available project options. A study by Pannell and Gibson (2016) estimated that use of an economically rigorous tool like INFFER to guide prioritisation would increase the value of environmental benefits by 50 to 100% relative to existing commonly used decision processes.
“For our organisation, using INFFER was like switching the lights on. It’s superior to anything else I’ve seen, and it’s had a profound impact on our organisation and the way we think about investing in the environment.” (Damian Wells, former CEO of North Central Catchment Management Authority).
”INFFER has become an integral component of the process for developing a new Regional Catchment Strategy. The valuable consultation that has resulted with the regional community and key partners has provided us with a new look at our regional assets and how they should be valued.” (Hannah Brook, Glenelg Hopkins CMA).
“INFFER was selected as the process to develop a new operational plan within Coliban Water, which was included as part of Coliban Water’s 2018 Pricing Submission (PS18) to the economic regulator in Victoria, the Essential Services Commission. The acceptance of the operational plan by the business established for the first time an investment program in Natural Resource Management and illustrates the effectiveness of INFFER in being able to adapt, and meet multiple agency and stakeholder goals and aspirations.” (Barry Floyd, Coliban Water).
“In the Wet Tropics, Burnett Mary, and Burdekin Natural Resource Management regions of Queensland, INFFER was selected as the most suitable tool for prioritising management options for maximising the water quality and economic benefits of investments in protection of the Great Barrier Reef.” (Jane Waterhouse, C2O Consulting). In New Zealand, INFFER has been used by The Waikato River Authority and has led a collaborative process with a number of New Zealand organisations to assess various options to reduce water pollution in the Waikato River. This work is guiding the expenditure of NZ$300 million over the coming 10 years.
There has also been uptake of INFFER in Canada with training programs delivered by the Pannell and others from the INFFER team in Alberta and Manitoba. The Land Stewardship Centre in Edmonton has used INFFER in the delivery of a study on water pollution in Alberta, funded by the Alberta Provincial Government.
“There has been a significant and growing interest in INFFER across the three Western Canadian Prairie provinces, driven by its rigour, its sound economic principles, and the eloquence of the theoretical foundation. From a policy perspective, having all the environmental policy tool options on the table in the same analysis has been ground-breaking.” (Jim Stalwick, Saskatchewan Ministry of Agriculture).
The value and impact of INFFER has been recognised in other sectors. The Bushfire CRC and the Australasian Fire and Emergency Service Authorities Council (AFAC) funded the adaptation of INFFER to the area impacted by bushfires, which was applied to assess strategic fire mitigation options in Western Australia, South Australia, New South Wales, Victoria and New Zealand. This is the first time Australian fire agencies have integrated economic, technical and social information to analyse their strategies. These analyses are changing the thinking about the options available for fire mitigation in Australia’s fire agencies. “The INFFER work has assisted the Department for Environment & Water (SA) (DEW) to attempt to quantify the costs of our bushfire mitigation activities, consider what we are mitigating & how and better understand what benefits/costs we are ‘generating’. The results will be used in Bushfire Risk Planning to better understand what risk reduction can be achieved with existing/proposed budgets and policies. The findings and the approach used (INFFER) can also use to add cost/benefit information to policy development. Developing the tools to conduct and the understanding of cost/benefit analysis is increasingly important to DEW as this information is now required for all Cabinet Submissions.” (Mike Wouters, Department of Environment and Water).
Research undertaken at UWA into the management of soil salinity in rural areas, including the integration of economic, social, biological and physical aspects, was the starting point for investigations that led to the development of INFFER. It evolved from similar multidisciplinary research into the management of a broad suite of environmental issues. From these research efforts, and from close engagement with environmental agencies, it was recognised that there was enormous potential to deliver much greater environmental benefits from the resources available through improved analysis and decision-making. From this point, the research diversified to encompass topics needed to meet INFER’s potential. Research was conducted into the existing practices, perceptions and capacity levels of environmental managers; the performance of existing environmental policies and programs and reasons for performance deficiencies; and the pilot testing of various new tools developed for environmental managers.
The research on salinity commenced in 2005 and the various strands of research have continued since then in parallel with translation, engagement and communication activities. The research has been led by Professor David Pannell at UWA, initially within the CRC for Plant Based Management of Dryland Salinity (Salinity CRC), then within the Future Farm Industries CRC (FFI CRC), and as part of his ARC Federation Fellowship. There have been 8 key participants at UWA and around the country.