Monitoring, evaluation & reporting programTechnical report series

Economic sustainability and social well-being

W W W. I N D U S T R Y. N S W. G O V. A U

TITLE | ASSESSING THE CONTRIBUTION OF INVESTMENT IN NATURAL RESOURCE MANAGEMENT TO ECONOMIC SUSTAINABILITY AND SOCIAL WELL-BEING

AUTHORS| Robert Gale: Theme Leader – Economic Sustainability & Social Well-Being, Economic Policy & Research Industry & Investment NSW, Locked Bag 21, ORANGE NSW 2800

Pip Brock, Leader – Monitoring, Evaluation & Reporting, Industry Development, Agriculture & Forestry Industry & Investment NSW, Locked Bag 1, NELSON BAY NSW 2315

Nick Milham: Director – Socio-Economic Evaluation, Economic Policy & Research Industry & Investment NSW, Locked Bag 21, ORANGE NSW 2800

Assessing the Contribution of Investment in Natural Resource Management to Economic Sustainability and Social Well-Being

Technical Report 12 Monitoring, Evaluation & Reporting Program Technical Report Series Robert Gale Theme Leader – Economic Sustainability & Social Well-Being Economic Policy & Research Industry & Investment NSW Locked Bag 21, Orange, NSW 2800 Pip Brock Leader – Monitoring, Evaluation & Reporting Industry Development, Agriculture & Forestry Industry & Investment NSW Locked Bag 1, Nelson Bay, NSW 2315 Nick Milham Director, Socio-Economic Evaluation, Economic Policy & Research Industry & Investment NSW Locked Bag 21, Orange, NSW 2800

June 2010

Monitoring, Evaluation & Reporting – Economic Sustainability and Social Well-Being Technical Report This publication should be cited as: Gale, R., Brock, P. & Milham, N. 2010, Assessing the contribution of investment in natural resource management to economic sustainability and social well-being, Technical Report 12 of Monitoring, Evaluation & Reporting Program Technical Report Series, Industry & Investment NSW, Orange, NSW. Authors: Robert Gale, Pip Brock and Nick Milham Published By: Industry and Investment NSW Postal Address: Locked Bag 21, Orange, NSW 2800 Internet: www.industry.nsw.gov.au Acknowledgements:

We would like to thank a number of individuals who have commented on various drafts of the manuscript and shared research and concerns with us including: Catherine Allan, Tim Cummins, Brent Jacobs, Graham Marshall, Judith McNeill, Paul Ryan, and Richard Stayner.

© Industry and Investment NSW 2010 DISCLAIMER The publishers do not warrant that the information in this report is free from errors or omissions. The publishers do not accept any form of liability, be it contractual, tortuous or otherwise, for the contents of this report for any consequences arising from its use or any reliance placed on it. The information, opinions and advice contained in this report may not relate to, or be relevant to, a reader’s particular circumstance. ISBN 978 1 74256 041 0

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Target 12 Working Paper Series Economic Sustainability and Social Well- Being

Industry & Investment NSW http://www.dpi.nsw.gov.au/environment/mer#MER-products

Working Paper 1

Vernon, D. & Thomason, R. 2007, ‘Natural resource decisions, economic sustainability and social well-being: a scoping paper for Target 12, prepared under the NSW Natural Resources Commission’s Standard and Targets Initiative’, Working Paper 1 of Working Paper Series for Target 12: Economic Sustainability and Social Well-Being, NSW Department of Primary Industries, Orange, NSW.

Working Paper 2

Reeve, I., Stayner, R. & Marshall, G. 2007, ‘T12 Development Paper: Measures of Social and Economic Well-Being in Natural Resource Governance’, Working Paper 2 of Working Paper Series for Target 12: Economic Sustainability and Social Well-Being (NSW Department of Primary Industries), Institute for Rural Futures, University of New England, Armidale, NSW.

Working Paper 3

Vernon, D., Thomason, R., Measham, T. G., Cavaye, J., Brown, P., Nelson, R. & Cummins, T. 2009, ‘A consultative process for examining the links between natural resource management decisions and economic sustainability and social well-being in NSW Catchments’, Working Paper 3 of Working Paper Series for Target 12: Economic Sustainability and Social Well-Being, NSW Department of Primary Industries, Orange, NSW.

Working Paper 4

Gale, R., Thomason, R. & Milham, N. 2009, ‘Socio-economic monitoring, evaluation and reporting: beyond the biophysical’, Working Paper 4 of Working Paper Series for Target 12: Economic Sustainability and Social Well-Being, Industry & Investment, NSW, Orange, NSW.

Working Paper 5 Gale, R. & Milham, N. 2009, ‘Monitoring, Evaluation, Reporting and Improvement (MERI) as an integrated assessment tool: Improving socio-economic and bio-physical outcomes from investment decisions in natural resource management (NRM)’, Working Paper 5 of Working Paper Series for Target 12: Economic Sustainability and Social Well-Being, Industry & Investment NSW, Orange, NSW.

Working Paper 6 Allan, C. 2010, ‘Rapid, small scale socioeconomic studies for natural resource management’, Working Paper 6 of Working Paper Series for Target 12: Economic Sustainability and Social Well-Being (Industry & Investment NSW), Institute for Land, Water and Society Report No. 54, Charles Sturt University, Albury, NSW.

Workshop Manual for Target 12 and Target 13

White, J., Bayley, D., Gale, R. & Jacobs, B. 2010, Socio-Economic Monitoring, Evaluation and Reporting for NSW Catchment Management Authorities, Workshop Manual for State Targets 12 and 13, Industry and Investment NSW, Orange, NSW.

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Contents 

Executive summary...................................................................................................... vii

1 Introduction ................................................................................................................1

1.1 Context: The dual purpose of Target 12 .............................................................1

1.2 The NSW MER Strategy .......................................................................................4

1.3 The rationale for government intervention in NRM...........................................5

1.4 Defining ‘Economic sustainability and social well‐being’ (ESSW).......................7

1.5 Relationship of Target 12 to other targets..........................................................8

1.6 ESSW MER is underpinned by six premises ......................................................10

2 Rapid appraisal in an adaptive management cycle ..................................................12

2.1 In‐depth versus rapid appraisal.........................................................................12

2.2 Rapid appraisal: strengths, limitations, applications ........................................13

2.3 In‐depth and rapid appraisal in an idealised CMA business cycle ....................14

3 How to implement a low cost rapid appraisal of ESSW............................................16

3.1 Economic sustainability and social well‐being in New South Wales ................16

3.2 Application of rapid appraisal to ESSW.............................................................17

3.2.1 Defining the goals of the ESSW assessment.......................................................... 18 3.2.2 Planning the approach........................................................................................... 18 3.2.3 Gathering data for ESSW MER............................................................................... 18 3.2.4 Choosing appropriate baseline data to assess change.......................................... 20 3.2.5 Choosing socio‐economic indicators of ESSW....................................................... 20 3.2.6 Producing MER information for various reporting requirements ......................... 21

3.3 The seven‐step rapid assessment technique for ESSR MER .............................21

4 Applying the seven‐step rapid assessment technique to socio‐economic profiling 24

4.1 Business profitability, sustainability and expansion .........................................24

4.2 Increased opportunities for employment.........................................................26

4.3 Gaining formal and informal skills.....................................................................27

4.4 Community networks and interaction ..............................................................28

4.5 Participation in NRM decision making ..............................................................28

4.6 Effectiveness of NRM decision making .............................................................29

5 Applying the seven‐step rapid assessment technique to cross‐target investment analysis.........................................................................................................................31

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5.1 Cross‐target investment analysis: Proof‐of‐concept testing ............................31

5.1.1 Questions arising from the social‐ecological view in systems thinking................. 31 5.1.2 Questions arising from vulnerability assessment in risk analysis.......................... 34 5.1.3 Questions on the links between NRM investments and ESSW ............................. 35 5.1.4 Interpretations of the biophysical/socio‐economic relationship .......................... 36

5.2 Examples of cross‐target investment analysis ..................................................37

5.2.1 Targets 4 and 12: Invasive Species and ESSW ....................................................... 38 5.2.2 Targets 7 and 12: Marine Waters and Ecosystems and ESSW .............................. 39

6 Summary ...................................................................................................................42

References ...................................................................................................................44

Appendix 1. Full list of indicators.................................................................................48

Appendix 2. List of indicators and indices for state of catchments reports ................51

Appendix 3. Sample questions on the values of an asset and threats to it.................54

Acronyms ABARE Australian Bureau of Agriculture and Resource Economics ABS Australian Bureau of Statistics BCA benefit cost analysis CAP catchment action plan CMA catchment management authority DECCW Department of Environment, Climate Change and Water (formerly

Department of Environment, Climate Change, DECC) ESSW economic sustainability and social well-being I&I NSW Industry and Investment New South Wales (formerly Department of Primary

Industries, DPI) INFFER Investment Framework for Environmental Resources MER monitoring, evaluation and reporting MCA multi-criteria analysis NRC Natural Resources Commission NRM natural resource management SOC State of the Catchment

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Executive summary In New South Wales, the Natural Resources Commission (NRC) audits and otherwise reviews the performance of Catchment Management Authorities (CMAs) against a Standard for Quality Natural Resource Management (NRC 2005a). The audits consider whether CMAs have systems and processes in place to enable progress towards eleven biophysical resource condition targets and two community targets adopted in the NSW State Plan. The intention is to measure the impact of decisions on biophysical resource conditions, notably investments in NRM, and to consider their contribution to meeting a target according to its designated indicators. The NRC reports more broadly at a State level about whether natural resource conditions and trends are improving or not as a result of government intervention in policy initiatives and investment. The reason for the audit is to improve NRM decision making at the CMA level.

This Technical Report is about a rapid appraisal approach for gathering evidence about Target 12: ‘Natural resource decisions contribute to improving or maintaining economic sustainability and social well-being (ESSW)’. Unlike the other targets, it is generally acknowledged that this target is both difficult to define and not readily measurable, a situation that makes reporting progress towards this target all the more problematic. However, even if Target 12 cannot be measured directly, there is still a rationale for the existence and purpose of the target. One critical aspect is that Target 12 ensures that the biophysical resource condition targets cannot be narrowly defined in natural science terms: economic and social implications need to be considered within the NRC’s adaptive management cycle (NRC 2005a).

It is important to note that the purpose of the thirteen targets is to focus NRM decision making, including but not limited to financial investment. For ease of expression we therefore define investment in broad terms to include NRM policy decisions as well as decisions about the choice of NRM projects and financial contributions, and the management and performance of these projects in terms of biophysical resource condition and ESSW outcomes.

In this Technical Report, we consider Target 12 has having a dual purpose – to gather socio-economic data for tracking progress towards the target which is recorded in State of the Catchment (SOC) reports, and to assess the contribution of investment in NRM to ESSW. Working within the adaptive management cycle, we discuss a socio-economic profiling method and a cross-target investment analysis method to address each purpose consistent with the NRC’s audit standard. Whereas the socio-economic profiling method has led to the production of SOC reports on Target 12, cross-target investment analysis is still at the proof-of-concept stage. The rigour of each method could be further enhanced by addressing the AA1000 AccountAbility Principles Standard of inclusivity, materiality and responsiveness (AccountAbility 2008).

The socio-economic profiling method was used to produce the initial 2008 SOC reports on Target 12 for CMAs (DECCW 2010). Information in these published reports covers the status and trends of the following six ESSW indicators: business profitability; employment; level of formal and informal skills; community networks and interaction; participation in NRM; and effective NRM decision making. The results for these indicators provide a benchmark for comparative purposes for a subsequent round of SOC reports. The method developed for gathering data for tracking progress towards the target in SOC reports involves a rapid appraisal technique to create socio-economic profiles at the catchment level based, in part, on community deliberations about resource conditions and trends.

The second method, cross-target investment analysis, assesses the performance of investments on a biophysical by biophysical target basis with a view to improving

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design, implementation and outcomes of future projects. The specific method is to identify NRM investment programs and projects by target according to the target’s indicators, assess the biophysical outcomes according to these indicators, and then assess ESSW outcomes, if any, for the six ESSW indicators. In other words, this method investigates the ‘flow-on’ effects of initial investments in biophysical resource condition on ESSW. The results can assist CMAs and agencies in making better investment decisions by testing the impacts of the investment in NRM on ESSW outcomes. CMAs can then review the results in terms of potential benefits to Catchment Action Plans (CAPs) and SOCs, among other considerations.

Both methods are conducted within a seven-step rapid assessment technique. This seven-step technique guides each method and provides CMAs with a quick, low cost, repeatable and consultative approach for ESSW monitoring, evaluation and reporting (MER). The seven steps are as follows:

1. Plan the ESSW MER;

2. Select indicators beyond designated indicators (if required) and formulate questions;

3. Review existing socio-economic information and/or investment programs;

4. Decide who to talk to;

5. Collect qualitative data;

6. Collate data from different sources; and,

7. Initiate CMA and agency ‘organisational learning’

Application of the seven-step rapid assessment technique is sufficiently straightforward to be administered by CMAs, though the NRC and State agencies would continue to have a supportive and coordinating role. CMAs are most appropriately placed to conduct the work given that the benefits are primarily in good decision making and in achieving ‘multiple benefits from single investments’ (NRC 2005b). Benefits include, for example, understanding the impacts of investment in yielding biophysical resource condition improvements, and associated flow on effects for ESSW, if any, as well as management benefits in terms of CMA operations. Such benefits are part of the normal expectations of good investment decision making and management and are consistent with the adaptive management framework fostered by the NRC and applied at the CMA level. Case studies have already been conducted at a sub-catchment scale of the impacts on ESSW of invasive species, wild dog stock losses, fox threat abatement and the frequency of algal blooms. Although further work is required on assessing both the investment and management impacts, cross-target investment analysis provides a clear line of inquiry. These examples could be quickly expanded by assessing ESSW outcomes by ESSW indicators for other targets.

CMAs may also be well placed to consider the importance of the scale at which an assessment is conducted, taking into account different views on the question of whether bottom up management efforts match the scale of particular environmental or natural resource management problems.

The rapid assessment technique is a low cost technique compared to more in-depth economic and social science techniques. However, it should not replace in-depth techniques whenever these are warranted. In many instances, the seven-step rapid assessment technique will be a suitable least-cost option to gather socio-economic information for tracking progress towards the target to be recorded in SOC reports and in cross-target investment analysis for better NRM decision making.

1 Introduction 

The New South Wales (NSW) State Plan contains 13 state-wide targets developed by the NSW Natural Resources Commission (NRC) in 2005 to guide the management of the State’s natural resources (NSW Government 2006). Targets 1 to 11 are about improving the condition of biophysical resources, whereas Target 13 seeks to guide improvement in natural resource manager capacity. Target 12, the focus of this Technical Report, is that: Natural resource decisions contribute to improving or maintaining economic sustainability and social well-being (ESSW)

1.1 Context: The dual purpose of Target 12 The eleven biophysical targets are grouped into land, water and biodiversity categories (Table 1). Target 13 is a community target for which there is a separate Technical Report (Jacobs et al, 2010). Target 12 is also a community target and can be considered in terms of both a socio-economic profile of a catchment and as a means of evaluating investment decisions in biophysical resource conditions. Accordingly, we distinguish between a method of socio-economic profiling for State of the Catchment (SOC) reports and a method of cross-target investment analysis for better NRM decision making.

This Technical Report describes a quick, low cost, repeatable and consultative approach for monitoring, evaluation and reporting (MER) on ESSW according to each method.

The first method addresses a requirement to gather socio-economic data for tracking progress towards the target which is recorded in SOC reports. The method developed for gathering data and tracking progress used in these reports involves a rapid appraisal technique to create socio-economic profiles at the catchment level based, in part, on community deliberations about resource conditions and trends. In this regard, Target 12 is about monitoring the contributions of natural resource management (NRM) decisions to economic sustainability and social well-being (ESSW) rather than measuring a community’s overall vitality (NRC 2005a). The appraisal approach and the indicators of ESSW outlined in this Technical Report were initially developed and tested by Industry and Investment NSW (I&I NSW) as part of the NSW Government’s MER Strategy 2006–2009 (Vernon et al. 2009). The initial method, called socio-economic profiling in this Technical Report, was designed to support preparation of SOCs and the triennial State of the Environment Report.

The second method considers the Target as a requirement to obtain information for better NRM decision-making. The method of gathering data applies a rapid appraisal technique to cross-target investment analysis of biophysical resource condition outcomes and the associated impact on the ESSW of local communities (i.e. the ‘flow-on’ effects of NRM investment spending, if any, on ESSW). This analysis identifies the outcomes of NRM investment in each of the eleven biophysical targets plus Target 13 on ‘adaptive capacity’, and the ‘flow-on’ outcomes for Target 12 on ESSW. Cross-target investment analysis is designed to assist Catchment Management Authorities (CMAs) and agencies in reviewing catchment action plans (CAPs), and in assessing the performance of investment strategies and funded projects (i.e. investment decisions) with a view to improving design, implementation and outcomes of future projects.

Each method requires NRM practitioners – who are most frequently trained in the biophysical sciences – to include socio-economic methods and data as a routine matter in the CMA’s business cycle, in other words, to adopt a more holistic perspective on NRM decision-making. Socio-economic research – the systematic investigation of groups of people and their institutions and activities – is an undertaking linked and related to biophysical research (Box 1).

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Table 1: Thirteen state-wide targets for NRM in New South Wales

Biodiversity

1. By 2015 there is an increase in native vegetation extent and an improvement in native vegetation condition.

2. By 2015 there is an increase in the number of sustainable populations of a range of native fauna species.

3. By 2015 there is an increase in the recovery of threatened species, populations and ecological communities.

4. By 2015 there is a reduction in the impact of invasive species. Water

5. By 2015 there is an improvement in the condition of riverine ecosystems. 6. By 2015 there is an improvement in the ability of groundwater systems to support groundwater

dependent ecosystems and designated beneficial uses. 7. By 2015 there is no decline in the condition of marine waters and ecosystems. 8. By 2015 there is an improvement in the condition of important wetlands, and the extent of those

wetlands is maintained. 9. By 2015 there is an improvement in the condition of estuaries and coastal lake ecosystems.

Land

10. By 2015 there is an improvement in soil condition. 11. By 2015 there is an increase in the area of land that is managed within its capability.

Community

12. Natural resource decisions contribute to improving or maintaining economic sustainability and social well-being.

13. There is an increase in the capacity of natural resource managers to contribute to regionally relevant natural resource management.

Box 1: Some key terms on the role of social science research in making better NRM decisions which include a relationship to adaptive management and ESSW

Approach, method and technique In socio-economic research, the research approach reflects the research framework, or paradigm, within which the investigation occurs. The research approach will influence the way a question is asked (for example, hypothesis testing versus exploration), the methods/techniques selected to generate data, and the approach to analysis of the data. How reality is understood is fundamental to the research approach. If reality is considered as something that is ‘out there’, and observable, data on that reality will be collected. If, however, reality is understood as being at least in part socially constructed, data will be thought of as being ‘created’, rather than simply collected. The research method is the practice of undertaking the research, that is, how it is done. ‘Method’ is a broad term that relates to how data are collected/created, handled, analysed and presented. A technique is a particular method or set of methods.

Quantitative and qualitative data Quantitative data are generated in ways that enable handling by counting, statistical analysis and other numerical practices. These data are suitable for ‘what’ questions, comparisons and statistical generalisations. Qualitative data are words and images. They are suitable for ‘why’ questions, deep understanding, and generalisation through analogy.

Appraisal, assessment, evaluation and deliberation In this report appraisal and assessment are used synonymously and refer to inquiry, research, or investigation. Evaluation is assessment related to understanding the impacts and outcomes of a specific project or program, often in relation to anticipated goals. The Department of Finance (1994) defines evaluation as a systematic and objective review of the appropriateness, efficiency and/or effectiveness of a program. Evaluation is also the topic of inquiry in a Department of Environment and Climate Change report (DECC, 2009). Deliberation involves engaging stakeholders in structured dialogue for the purpose of reaching consensus or making a decision.

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In gathering information for socio-economic profiles or cross-target investment analysis, it is clear that linking changes in biophysical assets to impacts on economic and social conditions must be done with due regard to the role of the many other factors that have influenced these conditions over the period. The extent to which factors other than natural resource investments have been responsible for changes in the indicator variables is not easy to determine in the absence of considerable local knowledge and other data. This attribution problem – the difficulty of determining how much of an observed change in an indicator variable can be attributed to a particular cause – means that Target 12 is extremely difficult to measure. In short, the ESSW of a particular community or region is determined by the interplay of a large number of factors that are changing over time.

Accordingly, it will become clear that Target 12 is not generally amenable to assessment through empirical data (because the data have either not been collected or are too costly to collect). In very few instances will data be available to show a change that can be confidently attributed to specific investment decisions in NRM. The focus group process, explained in Vernon et al (2009) and White et al (2010), does, however, permit a qualitative assessment based on stakeholders’ perceptions. This qualitative assessment is the methodological centrepiece of ESSW MER. It is efficient, effective, repeatable, testable, and can be rigorously documented. Whenever empirical data are not available or cannot be gathered in meaningful timeframes, we can still usefully ask relevant stakeholders what their perspectives are, that is, what they think about a given NRM issue or how investments in NRM contribute to or maintain ESSW. In this regards, a critical aspect of the target is that it ensures that NRM issues cannot be narrowly defined in primarily natural science terms (Light 2002; Allan; 2009), since economic and social issues are considered within the NRC’s adaptive management cycle (NRC, 2005a) as well as within a regional delivery model for NRM (see, for example, critiques of NRM in Lane, Robinson and Taylor 2009).

In our view, the dual purpose of Target 12 takes into account the NRC’s point that this community target ‘recognises the fundamental importance of balancing natural resource outcomes with economic and social factors and reflects the NSW Government’s policy approach to NRM’ (NRC 2005b:6). It is important in this context not to over emphasise the reporting purposes of Target 12 at the expense of the overall purpose of this target and others. The broader purpose is explained by the NRC as follows:

‘The recommended state-wide targets will provide focus, coordination and a means of tracking NRM progress within the new institutional model. Their overall purpose is to ensure that natural resources continue to support a range of community values in the long-term. This is a significant challenge given the current status and trends in resource condition. It will require trade-offs between environmental, economic, social/cultural values at local, regional and state scales’ (NRC 2005b:18). ‘The CMAs’ application of the state-wide standard will drive the coordination that is necessary to achieve the state-wide targets.

In turn, the targets will

provide a focus for coordinated efforts among all players, so they can deliver the outcomes that the NSW community is seeking from the natural resource base’ (NRC 2005b:20).

Given these statements, the purpose of the thirteen targets is to focus decision making, including but not limited to investment. For ease of expression we therefore define investment in broad terms to include NRM policy decisions as well as decisions about the choice of NRM projects and financial contributions, and the management and

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performance of these projects in terms of biophysical resource condition and ESSW outcomes.

Even if Target 12 cannot be measured directly, there is still a rationale for the existence and purpose of the target. For example, although the specific investment component has not been assessed, decisions have already been informed at a sub-catchment scale through a general cross-target analysis of the impact on ESSW of invasive species, wild dog stock losses, fox threat abatement and the frequency of algal blooms (Gale, Thomason and Milham 2009; see also Section 5.2). A further step would be to conduct a cross-target investment analysis. These examples could be quickly expanded by assessing ESSW outcomes by ESSW indicators as explained in the section on ‘Gathering data for ESSW MER’ (Section 3.2.3).

The broader purpose also requires a consideration of scale because the scale at which an assessment is undertaken ‘significantly influences the problem definition and the assessment results’ (Millennium Ecosystem Assessment 2005:84). While there is merit in considering ‘multiple nested scales’, and whether the findings of assessments conducted at different scales might vary according to the questions asked or the information analysed (MEA 2005:84), the question of scale represents an ongoing challenge requiring further research across all targets. In recent research, Marshall (2009a; 2009b), for example, reports on, and provides guidelines for, nested community-based NRM under a regional delivery model, noting that nesting is not ‘a panacea for the problem of achieving effective community engagement in NRM’ (Marshall 2009b:53). Lane et al. (2009:70) make a similar point in noting that ‘re-scaling governance and management is no panacea to the “wicked” problems of institutional complexity and fragmentation’.

The question of scale raises the matter of subsidiarity in devolved governance (Marshall 2008; 2009a; 2009b; Davidson and Lockwood 2009). On the one hand, CMAs may be well placed to consider the importance of scale at which an assessment is undertaken (MEA 2005:84), taking into account different views on the question of whether bottom up management efforts match the scale of particular environmental or natural resource management problems (Lane, Robinson and Taylor 2009). On the other hand, there is a need for ‘closer alignment of responsibilities, authorities and powers, as well as clear allocation of roles and responsibilities among decision levels’ in improving overall governance ( Davidson and Lockwood 2009:85).

1.2 The NSW MER Strategy 

I&I NSW is the lead agency for three targets, including Target 12, for which it has responsibility to develop a MER program. The agency also contributes to the MER for other targets. In addressing its responsibilities, the agency has drawn on the NRC’s Standard, the MER strategy and the evaluation framework for CMA NRM (DECCW, 2009).

The NRC’s Standard for Quality Natural Resource Management, specifies the required outcome for monitoring and evaluation as follows: ‘Quantification and demonstration of progress towards goals and targets by means of regular monitoring, measuring, evaluation and reporting of organisational and project performance and the use of the results to guide improved practice’ (NRC 2005a:13). In 2006, NSW Government agencies prepared a specific MER Strategy to guide how to measure progress towards achieving the State’s NRM targets. The strategy was based on the premise that it is essential to know the condition and trend in natural resources, human capacity and ESSW to improve NRM. The MER Strategy was therefore designed to collate and analyse existing data and to develop and implement a co-ordinated approach to future long-term monitoring. Also, the strategy specified that ‘initial’ SOC reports would be prepared to provide a preliminary assessment of resource condition

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towards the 13 NRM targets for all regions of NSW. These regions correspond to the areas of responsibility of each of the 13 CMAs in the State.

This Technical Report is based in part on a series of working papers (Vernon and Thomason 2007; Reeve, Stayner and Marshall 2007; Vernon et al. 2009; Gale, Thomason and Milham 2009; Gale and Milham 2009; and Allan 2010). Accordingly, it represents the culmination of an evolution of ideas on ESSW. This Technical Report explains both the appraisal method of socio-economic profiling used to produce the initial SOC reports as well as an appraisal method for cross-target investment analysis that could be applied for more in-depth investigations to improve investment decision making. It supplies theoretical support to the preferred methods and provides linkages to other technical reports and the training workshop guidebook. In both instances, the move towards greater community participation attempts to produce more robust and valid statements on ESSW condition and trends with the added aim of providing some consistent content to the statements across catchments. This approach may elicit new insights beyond assumptions made by individual decision-makers, even from their experience of living in a community of interest within a catchment.

1.3 The rationale for government intervention in NRM Production and consumption of goods and services, patterns of urban settlement, and transportation systems often have adverse impacts on the natural assets of a region. The damages or costs these activities impose are often incidental, or external, to the costs of producing the goods or services, so are not factored into their market prices. When these external costs (‘externalities’) are present, the markets for associated goods and services are said to exhibit ‘market failure’, meaning that they are not working as efficiently as they could be.

The presence of market failure is a presupposed justification for governments concerned with efficiency to consider intervention to attempt to remedy the failure. Most of the natural resource investments made by CMAs are intended to address externalities of one form or another. For example, landholders needing to maximise the short run (private) returns from their land (e.g. to service high debt levels) may not have an incentive to control weeds to a level that would prohibit their spread to neighbouring properties. In such circumstances, governments can intervene to attempt to correct the market failure by increasing the private incentives the farmer has, for example, through cost sharing.

Stating that the presence of market failure may be a presupposed reason for governments to intervene to try and fix things, introduces a note of caution into the justification. It recognises the possibility that governments themselves may not get things right when intervening. Their policies too, may have unintended consequences (e.g. introduction of the cane toad) or be inefficient in design (e.g. colonial land settlement; allocation of water licenses). Government intervention that is wasteful or ill-designed will not contribute to, and indeed could worsen, economic and social well-being.

The ‘market failure’ theory in neoclassical economics described above provides a presupposed justification for government intervention on efficiency grounds. In neoclassical economics, ‘welfare’ (or ‘well-being’) improves when resources are allocated more efficiently (allowing incomes to rise). There can be no doubt that efficiency is of paramount importance. In a regional NRM context, for example, funds are scarce in relation to the many vital environmental needs on which they could be spent. Wasting funds, however unintentionally, has an ‘opportunity cost’ – desirable alternative projects will be foregone.

Notwithstanding its importance as one goal of policy, it is now accepted that efficiency may not be a sufficient measure of the ‘welfare’ of a society. Other policy goals now

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include, among other things, equity and sustainability (World Commission on Environment and Development 1987;Agenda 21 1992; MEA 2005).

These considerations are important for the present purpose because if ‘welfare’ is used in the neoclassical sense, then the questions that will draw out links between biophysical assets and welfare need ask only about income generation potential in the region. If we take the wider view of welfare, such as is implied in terms like ‘economic sustainability and social well-being’, then there will be wider links to draw and more questions to ask.

A ‘non-declining capital stocks’ view of welfare, as explained below, takes the wider view. It is gaining acceptance in economic policy circles (Australian Government, 2010; Henry, 2010; McDonald and Goreki 2010). Moreover, this view is consistent with the analytical framework used in resilience theory, which suggests that the health of ‘social-ecological systems’ may be indicated by trends in capital stocks. This consistency of conceptual framework allows insights from resilience theory to fit neatly with, and improve upon, the non-declining capital stocks theory (Walker et al. 2010). The Walker et al. (2010) report makes the important point that some measure of the resilience of a stock of natural capital on which social-ecological systems are dependent, is needed.

The sustainability aspect of economic and social well-being requires a capacity within a community to continue to satisfy the needs of its residents. Some of those needs will be provided by ‘the market’, while others will not. All the goods and services that meet a community’s needs – be they economic, environmental, social or cultural – will be created by converting flows of services from stocks of various forms of capital. Capital is a stock of something that is not used up all at once, but delivers its benefits over time. To the extent that a community’s capital stocks are being depleted and are not being replaced, the services flowing from them will also decline over time. In the absence of any alternatives, the sustainability of community well-being will be in question. For example, if the fish catch in a fisheries-dependent region is rising rapidly, providing growth in income and employment opportunities, the region’s well-being will be sustained only so long as fish stocks do not ‘collapse’ from over-exploitation.1 The fisheries are ‘natural capital’ stocks, and must be managed in such a way that the biomass extraction can be sustained in the long run, and stocks not run down. Conversely, to the extent that a community’s capital stocks are growing, its capacity to generate flows of goods and services will also grow, as will its ability to sustain community well-being into the future. The capital stocks may be described as follows (see Reeve at al (2007):

Natural Capital comprises all the biophysical assets and services provided by nature. Forestry stocks yield a flow of timber; the stock of fish in the oceans yield a flow of fish to catch; the stock of oil in the ground yields a flow of crude oil, and so on. Nature also provides waste assimilation services, absorbing the wastes of economic activity that emit into the atmosphere or waterways; flood mitigation services, climate regulation, pollination, refugia, nutrient cycling, medicines, and genetic material and indeed a multitude of other ecosystem services operating at various spatial scales, from local to global.

Built Capital refers to economic infrastructure (such as roads, ports, cables, pipes, cars, trucks, and buildings); all the physical assets of businesses and households and indeed any asset at all that has been manufactured or created.

Human Capital is the knowledge, skills, health and general abilities of individuals.

1 The level of economic well-being might be sustained if the collapse of the fisheries had been foreseen, and the economic rent earned from the fisheries invested in some alternative income-generating capital stock.

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Social capital refers to the social relationships, networks, norms, and trust within society that help individuals, groups and organizations to cooperate for their mutual benefit. Social capital focuses on the capacities of groups of people and their interactions, and is thus distinguished from human capital, which focuses on the capacities of individuals. Institutions that codify norms of behaviour, such as the justice system, governance, and representative democracy are sometimes separated out and termed institutional capital. Social and institutional capitals are closely linked. (The more social capital there is, the greater the willingness of society to co-operate and comply with rules, therefore the greater the benefits that flow from institutional capital.)

Financial capital refers to the funds that are available to individuals and groups in a community in the form of savings or credit. Financial capital can be thought of as potential capital, as interest, or in terms of its application to produce or transform other capital to goods and services These funds contribute to community well-being only when they are converted into one or the other of the four forms of capital listed above.

These five kinds of capital, when combined, generate a wide range of outputs that are important to, and valued by, a community. For example, farmers need land, water and sunshine (natural capital), know-how (human capital), machinery (built capital) and quite often, for example, an ability to work with neighbours (social capital) to produce agricultural commodities; a General Practitioner needs access to equipment (built capital), other health professionals (human capital), and social support groups for particular diseases (social capital) in order to deliver health services. If investments in biophysical assets (natural capital) contribute significantly to economic sustainability, as non-declining aggregate capital stocks, the investment will usually involve growth in at least one or more of the forms of capital.

The conclusion is that the five forms of capital stocks underpin economic sustainability and social well-being. They are also part of the livelihoods framework for capacity assessment in Target 13 (Jacobs et al. 2010).

1.4 Defining ‘Economic sustainability and social well­being’ (ESSW) Given the foregoing, ESSW needs to be considered in terms of separate definitions for ‘economic sustainability’ and ‘social well-being’. This is because the capital stocks definition of economic sustainability refers to non-declining stocks (of capital), while maintaining social well-being relates to flows of goods and services that satisfy human needs (and requires that these flows be both non-declining and equitably distributed).

Economic sustainability can be defined as non-declining capital stocks if the distinction is made between strong and weak sustainability. Weak sustainability allows one form of capital to be substituted for another as long as the sum of all capital stocks does not decline and as long as natural capital does not fall below 'critical' levels (recognising the importance of thresholds and irreversibility, as in 'resilience thinking'). This version of sustainability allows natural capital to decline within those critical limits, as long as that decline is offset by increases in other forms of capital – so that overall, capital stocks are non-declining. Over much of modern economic history, increasing built capital has substituted for declining natural capital. The difficulty of defining thresholds and irreversibility for natural resources, and the consequences of ignoring them or getting them wrong, implies the need for a stronger version of the sustainability criterion. Thus, 'strong' sustainability requires both that the total quantum of capital is non-declining, and that natural capital is non-declining.

Given that economic theory posits a relationship between stocks of capital and flows of the services that generate (socio-economic) well-being, if the (capitals-based) economic sustainability criterion is met, then well-being should also be sustained. But the converse does not necessarily hold, at least in the short term, or locally: it is possible to maintain socio-economic well-being while running down stocks of capital.

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Economic theory has traditionally construed social well-being as the level, and equitable distribution, of market and non-market goods and services. Social well-being is assured provided the above conditions for economic sustainability are met. Recent definitions of social well-being are considerably more inclusive (McDonald and Goreki 2010). Beyond this, and given the importance attached to community consultation in the MER framework, it may be acceptable to allow CMAs and agencies a fair bit of flexibility in how social well-being is defined in particular community contexts – in so far as the information gathered can be compiled at a catchment-wide level and aggregated regionally to the state-wide level for use in State of the Environment reports.

1.5 Relationship of Target 12 to other targets In its 2005 report to the NSW Government explaining the target framework, the NRC (2005b) stated:

The socio-economic target (T12 on ESSW) recognises the fundamental inter-relationships between natural resource, economic and social outcomes and explicitly identifies an important natural resource policy direction of the NSW Government. The community’s capacity to achieve natural resource outcomes is directly affected by economic sustainability and social well-being, which in turn are fundamentally dependent on the underlying condition of natural resource assets.

In this Technical Report, we take the view that Target 12 assumes that socio-economic and biophysical processes in a catchment are linked and that decisions about investment to improve biophysical outcomes will affect and be affected by socio-economic conditions and processes; and that socio-economic and biophysical factors move in the same direction in the long term.

The relationship between NRM planning and investment, natural resource manager capacity, natural resource condition and ESSW is shown in Figure 1.

Source: Jacobs et al. (2010 Figure 1: Conceptual model of the relationship between community and biophysical targets and CMA planning and investment

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An important distinction is drawn between ESSW monitoring (Target 12) and capacity monitoring (Target 13). Whereas Target 13, ‘There is an increase in the capacity of natural resource managers to contribute to regionally relevant natural resource management’, is about adaptive capacity (i.e. the capacity to learn and transform), Target 12 is about how NRM decisions on assets, services and landscapes contribute to ESSW and thus to ongoing capacities for NRM.

While each target is intended to improve NRM decisions, Target 12 is uniquely concerned with examining how decisions regarding all the biophysical targets affect ESSW, thereby addressing the following NRC state-wide aspirational goal:

Resilient, ecologically sustainable landscapes functioning effectively at all scales and supporting the environmental, economic, social and cultural values of communities (NRC 2005b, 2008:9).

In addressing the relationship between Target 12 and the biophysical Targets 1 to 11, we consider human communities and the natural resources on which they depend as co-evolving and self-organising social-ecological systems. A social system, for instance, is self-organising in the sense that its elements (individuals and organisations) adapt to any disturbance. However, a particular social system does not necessarily organise all its structures and institutions by itself. Third parties, like governments, often intervene in various ways to help provide these structures and institutions, which the individuals and organisations in the system then self-organise around (i.e. adapt to).

Target 12 (to improve or maintain) can be read as an injunction to at least ‘do no harm to’ socio-economic sustainability and well-being while meeting Targets 1 to 11. That is, Target 12 does not set a specific target for the level of ESSW that is aimed at; it merely provides a vision for, and in some situations may be a constraint on, the pursuit of the eleven biophysical targets.

The fact that land managers (mainly private landholders) participate voluntarily in a project is enough evidence to indicate that they expect to be better off from doing so; that is, that they expect their socio-economic well-being to improve. It might follow that the key focus (and purpose) of the analysis required by Target 12 is also to consider the effects of NRM decisions on the economic and social well-being of the community/catchment beyond the participant landholders. Of course, retrospective analysis would include questions regarding the extent to which the socio-economic well-being of participants had in fact changed; that is, whether their expectations had been realised.

While considerable progress has been made, implementation of the cross-target investment analysis aspect of Target 12 is still at the ‘proof-of-concept’ stage. The aim of this Technical Report is to suggest some preliminary questions to ask of proposed natural resource management investments in order to draw out the links between those investments and their possible socio-economic impacts. When asked as part of a community consultation process, responses to the questions will provide state agencies or catchment management officers with information that could be used to screen proposals. The questions might be part of a quick, low cost and repeatable method for a ‘more robust analysis of alternative investments in the biophysical targets and their impact on economic sustainability and social well-being’ (Gale, Thomason and Milham 2009; Gale & Milham 2009). As already noted, the requirement to monitor, evaluate and report on the socio-economic impacts of proposals set out in the NSW State Plan, Priority E4, Target 12, states that ‘natural resource decisions contribute to improving or maintaining economic sustainability and social well-being’ (NSW Government, 2006). Just how the answers to the suggested questions might be used will be a matter of context and CMA/agency preference.

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In making more holistic NRM decisions, we take the view that the training most CMA officers have in biophysical sciences rather than socio-economic sciences is not an obstacle to the kind of socio-economic analysis we propose, largely because these practitioners already have experience in participatory, collaborative and/or consultative decision-making. Two research topics held in common by practitioners of both socio-economic and biophysical sciences are that of risk and systems analysis.

1.6 ESSW MER is underpinned by six premises  In this Technical Report, we identify two appraisal methods, socio-economic profiling and cross-target investment analysis, that can be used to create different information products. Socio-economic profiling informed the initial 2008 SOC reports (DECCW 2010). Repeating this method will continue to contribute to baseline and trend information, potentially providing a basis to make judgements about status and trend for the designated indicators to 2015. Cross-target investment analysis assists CMAs in reviewing CAPs, projects and specific investment decisions. The method of application involves evaluating the impact of investment in biophysical resource condition on ESSW either on a target-by-target basis or across all eleven biophysical targets.

This Technical Report is based on the view that social, environmental and economic considerations are mutually supportive and need to be internalised in decision making from the outset (World Commission on the Environment and Development 1987). The following six premises are specifically noted:

1. A catchment management system is a complex adaptive social-ecological system in which natural resource assets, services and landscapes are intertwined with socio-economic and ecological processes, and the reverse is also true – ‘socio-economic processes’ are to some extent a product of their interaction with natural resource assets, services and landscapes.

2. NRM is as much about understanding and working with people and the way they go about using natural resources as it is about directly managing those resources, with the implication that sometimes resource managers have to operate within a fairly short program planning horizon, whereas building the knowledge, relationships and social capital to understand and work with people successfully can take a lot longer.

3. It is essential to know the condition and trend in natural resources, human capacity, and economic sustainability and social well-being to improve NRM and demonstrate the success of investment, and this requires knowledge of baseline conditions.

4. NRM decisions are not properly informed if socio-economic information is not gathered, interpreted, shared and applied, because implementation of decisions ought to take into account the public benefits of the investment.

5. A quick, low cost and repeatable method of undertaking socio-economic assessment might suit CMAs and agencies, including the NRC, given the need to prepare SOC reports, annual reports, CAP reviews and investment strategies and to conduct project design and implementation.

6. ESSW MER methods need to be understood within the context of local conditions and conceptual frameworks.

This Technical Report covers a range of frameworks such as rapid assessment, stakeholder engagement and participation, adaptive management, resilience theory, vulnerability assessment and socio-economic analysis. The report does not provide an in-depth discussion of these frameworks; rather, it describes how the above premises can be accommodated and provides a pragmatic view about how a workable, feasible

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approach to socio-economic profiling and cross-target investment analysis can be achieved. Supporting information concerning skill transfer in implementing ESSW MER is provided in a workshop guidebook (White et al. 2010).

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2 Rapid appraisal in an adaptive management cycle 

In this section of the Technical Report we distinguish between two broad types of assessment or appraisal: in-depth appraisal for quantitative and/or detailed studies, and rapid appraisal for quick approximations. We note that each approach is best considered within an adaptive management cycle, for which we adopt the cycle developed by the NRC. We make the case for rapid appraisal to be used as an approach for assessing Target 12 because a quick, low cost and repeatable method of undertaking socio-economic assessment might suit many CMA and NRC MER needs, including the preparation of SOC reports, annual reports, detailed triennial reports, CAP reviews, investment strategies and project design and implementation. How this might be undertaken is covered in Sections 3, 4 and 5.

2.1 In­depth versus rapid appraisal  The timeframe for a process of ESSW MER depends on the ultimate purpose of the report and the breadth and depth of the data required. The in-depth appraisal process (such as one based on broad scale surveying and analysis) will clearly involve more time and resources than a more succinct and/or targeted appraisal process. There are situations for which in-depth appraisals are appropriate, and would therefore justify the employment of expert teams. Often, however, rapid appraisals are sufficient, in this instance, for both socio-economic profiling and cross-target investment analysis. The similarities and differences between in-depth and rapid appraisal methods and techniques are provided in Table 2.

Table 2: Similarities and differences between rapid and

in-depth appraisal methods and techniques Rapid Appraisal

Techniques In-depth Appraisal Techniques

Benefit cost analysis (BCA) Investment Framework for Environmental

Resources (INFFER)2 Multi-criteria analysis (MCA)

Biophysical modelling Quantitative content analysis of key documents

Small targeted questionnaire surveys Large, broad-scale, questionnaire surveys

Quantitative data

Use of readily accessible data from Australian Bureau of Statistics (ABS), ABARE other national data sets and social benchmarking surveys

Review of data from ABS, ABARE and other sources

Socio-ecological resilience Local knowledge from semi-structured interviews; expert opinion

Semi-structured interviews as part of in-depth research

Deliberative panels Deliberative panels Document review: qualitative content analysis

Document review: qualitative content analysis

Qualitative data

Focus groups (one-off meetings), including techniques for mind mapping, visualisation, ranking options, voting

Delphi technique (iterative) Participatory approaches – including focus groups – embedded within a medium to long-term research framework

2 See Pannell 2008; Pannell et al. 2009.

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2.2 Rapid appraisal: strengths, limitations, applications A range of rapid appraisal approaches are being developed in different contexts and disciplines around the world. Although there is no single accepted definition of rapid appraisal, the connotation is that it is not a long and expensive appraisal. While there is a continuum between rapid and in-depth appraisal, the rapid appraisal approach we are emphasising is defined as one that is more ‘rapid’ than traditional economic or social science research involving high levels of expertise and/or detailed research requiring extensive data handling and analysis (e.g. economic techniques and/or social science questionnaires or other social surveys).

Rapid appraisal approaches share a similar set of methods for providing decision makers with trustworthy, relevant, timely and affordable information. Some rapid appraisals can legitimately be criticised for being ‘quick and dirty’, producing information of limited value because of invalid, or poorly articulated research design and application. However, academically robust approaches have been developed (Chambers 1981; 1994a; 1994b). Two main principles underlying these approaches are described as optimal ignorance (identifying what is not worth knowing) and proportionate accuracy (identifying orders of magnitude or directions of change) (Chambers 1981). As illustrated schmatically in Figure 2, robust rapid appraisal approaches include Rapid Rural Appraisal, Rapid Assessment, Participatory Rural Appraisal, Rapid Ethnographic Assessment, Rapid Feedback Evaluation and Real Time Evaluation (Allan 2010). The specific techniques or methods used within each of these approaches depend in part on the context of the issue being addressed, including history and current resources.

Source: (Allan 2010)

Figure 2: A representation of the relationship between alternative rapid socio-economic assessments

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2.3 In­depth and rapid appraisal in an idealised CMA business cycle  The distinction between the use of rapid and in-depth appraisal techniques in ESSW MER is best explained with reference to an idealised CMA adaptive management cycle as promoted by the NSW Standard for Quality NRM (NRC 2005a) (Figure 3). The cycle is based on well understood adaptive or experiential learning cycles (Plan–Do–Check–Act) as well as Holling’s (1978) early framework for adaptive environmental assessment and management and the ‘learning-by-doing’ characteristic of adaptive management.

Source: NRC 2005a Figure 3: Adaptive Management Cycle

This Technical Report adopts the adaptive management cycle but notes the ‘rational comprehensive’ origins of this approach. The cycle was initially about experimenting on the problem as a whole (rather than small scale trials), and adapting the decision accordingly. It was traditionally based on the premise that optimality can be achieved in decision making. The cycle also accommodates participatory decision making. A spectrum of approaches to decision-making that could be used to enhance resource management theory has been developed in planning and public administration literature (Lindblom 1959; Cardew 1999). This spectrum from ‘rational’ to ‘incremental’ places participatory decision making at the ‘incremental’ end and shows a fundamental conflict between 'participatory' and 'rational comprehensive' approaches (Lindblom 1959; Cardew 1999). Discussion about viewing adaptive management as a somewhat incremental approach, enabling participation to be accommodated at a theoretical level, requires further consideration. It would be beneficial to further develop theory about where resource management lies along the spectrum of approaches to decision-making. If resource managers adopt a 'participatory/incremental' theoretical approach to decision-making, which is strongly informed by science, then participatory approaches can be accommodated. Adaptive management can then usefully link science to ecological management policy (Holling, Berkes and Folke, 1998). By discussing the spectrum of approaches during theoretical development, the fundamental conflict

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between rational comprehensive and participatory approaches will become apparent and can be addressed (Brock 1999).

If the analysis is quantitative and detailed, a CMA will be embarking on an in-depth appraisal approach within the adaptive management cycle. Techniques such as benefit cost analysis (BCA), the Investment Framework for Environmental Resources (INFFER) (Pannell 2008; Pannell et al. 2009.), multi-criteria analysis (MCA) or large, broad-scale questionnaire surveys (Curtis et al. 2006) fall into this in-depth appraisal category. Given the time, expertise and financial costs involved, these techniques cannot be employed frequently; however, they may be suitable to employ occasionally for large-scale project evaluations or for major investment priority reviews.

Appraisal has both ex ante (retrospective) and ex post (prospective) components. That is, CMAs need to consider past and future implications of investment, especially through CAP reviews (past) and subsequent upgrades (future). Arguably, if two or more alternative investments are equally attractive in terms of meeting their biophysical objectives, then the alternative that is expected to contribute more to ESSW should be chosen. For past decisions, a comparison between expected and observed outcomes could be useful in an adaptive learning sense. Realistically though, some spending decisions may have been made without much systematic ex ante attention to their potential impacts on socio-economic well-being. If socio-economic effects were not identified ex ante, there might be an ex post temptation to attribute all observed increases/decreases in ESSW to the NRM investment, depending on the observer’s personal biases.

In circumstances where the budget and expertise are limited, a CMA might consider a rapid appraisal approach to NRM investment decisions within the adaptive management cycle. One application of rapid appraisal is to produce SOC reports using a socio-economic profiling method (Vernon et al. 2009; DECCW 2010). A second application, which is more germane to the core purpose of assessing whether NRM contributes to ESSW, is cross-target investment analysis.

As previously noted, cross-target investment analysis can contribute to SOC reports, inform the review of CAPs and assess the performance of investment strategies and funded projects (i.e. investment decisions) both ex ante and ex post, with a view to improving design, implementation and outcomes from future projects. CMAs could thus use a rapid appraisal cross-target investment analysis to assess incentive applications, develop funding applications, make urgent investment decisions, and conduct scenario testing as part of impact assessment. This approach is expanded upon in Section 5 of this report.

Rapid appraisal is complementary to in-depth methods and can be used to provide low cost and rapidly gained information that feeds into decisions and learning within the adaptive management cycle. It can also feed into an in-depth process. For example, rapid appraisal could provide socio-economic information that identifies the need for and informs an in-depth biophysical assessment or an INFFER process.

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3 How to implement a low cost rapid appraisal of ESSW 

In this section, we explain a rapid appraisal method for assessing ESSW that involves a seven-step technique for either socio-economic profiling or cross-target investment analysis. Socio-economic profiling provides the primary ESSW information for SOC reports – the general picture or status. We note that it may take a few SOCs to produce a ‘baseline’. Cross-target investment analysis assesses the contribution of investment in NRM to ESSW. Information from cross-target investment analysis could be incorporated into SOC reports, CAP reviews or CMA annual reports.

3.1 Economic sustainability and social well­being in New South Wales On a project specific basis, CMAs choose what might be measured in their catchments and how they use the data. They also choose the level of community participation in their decision making, which for most CMAs does not currently extend to annual investment planning. Whereas most regional NRM bodies use participatory processes and internalise community stakeholder issues in some of their decisions (Brock 1996a; Brock 1996b), or at least use a ‘democratic’ approach through their Boards, many are fully immersed in day-to-day decision-making and do not often have the opportunity to analyse and publish information about their community. Also, most regional NRM bodies, such as CMAs, have staff who are primarily trained in the biophysical sciences and until the MER Program commenced, had been provided with neither a standard method to conduct ESSW MER, nor a set of indicators around which they might structure their data collection. In fact, there is no clear agreement in the literature about what might be measured (Pacione 2003; Reeve, Stayner & Marshall 2007).

Additionally, the NRC (which developed all thirteen NRM MER targets) qualifies that the ‘intent of Target 12 is not to measure the success of NRM against the overall health and well-being of communities since so many other factors influence these outcomes’. In acknowledging the attribution problem (discussed in Section 1.1), the NRC placed emphasis on monitoring, evaluation and reporting the contributions of NRM decisions to ESSW, where the contribution is mostly from decisions about public investment. The key value of this target is that the information can potentially be fed back through a MER process to improve investment decisions by understanding the socio-economic context and factors that influence the community. This influence on adoption provides the link to Target 13 about capacity (Jacobs et al. 2010).

It was acknowledged at the outset of the NSW MER program that considerable research work would be necessary in the initial phase of MER to develop suitable monitoring protocols and analytical frameworks to identify truly useful condition indicators for ESSW.

That noted, a list of condition indicators for ESSW was eventually prepared (Appendix 1). To keep the number of indicators to a manageable level, each potential indicator was assessed against three criteria: importance to ESSW; relevance to NRM change; and ease of measurement (Vernon et al 2009).

The final indicators selected were:

• business profitability, sustainability and expansion • employment • level of formal and informal skills • community networks and interaction • participation in NRM • effective NRM decision making

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3.2 Application of rapid appraisal to ESSW The major focus of the rapid appraisal approach is ex post evaluation rather than ex ante evaluation. For this discussion, the beginning point in the adaptive management cycle is therefore the ‘evaluation/learning’ stage, and might include, for example, appraisals of NRM investments in terms of ESSW outcomes. The initial SOC reports, however, did not have information from the analysis of past decisions and can be said to be ex ante reports, beginning at the ‘planning’ stage. Future SOC reports, however, would benefit from ex post appraisals of NRM investments that contribute to the development of a SOC report.

We can distinguish between roles for in-depth appraisal and rapid appraisal in the CMA’s adaptive management cycle at this stage (Figure 4). The steps along each project cycle are nominally the same but differ in their requirements for professional expertise, running time and cost. Ex-post and ex-ante examples are provided (see also White et al. 2010).

IMPLEMENTATION Invest in programs which

contribute to achievement of targets

EVALUATION/ LEARNING Evaluate the effectiveness of

investment programs in achieving targets

RESPONSE Use evaluation to

improve management – adaptive

management

Ex post rapid appraisal (S/E profiling & cross-target investment analysis) for: SOC reports, CAP audits, analysis of investment strategies, or improving project design and implementation

PLANNING Identifying goals, priorities and targets

Ex ante In-depth appraisal - BCA, INFFER, social-ecological resilience, large, broad-scale, questionnaire surveys

ADAPTIVE MANAGEMENT CYCLE Modified from NRC Cycle

Figure 4: In-depth and rapid appraisal in the Adaptive Management Cycle

The dual purpose of Target 12 is to gather socio-economic data for SOC reports and to assess the contribution of investment in NRM to ESSW. The prerequisites to enable an ESSW MER assessment to address this dual purpose include:

1. defining the goals of the ESSW assessment

2. planning the approach

3. gathering data for ESSW MER

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4. choosing an appropriate baseline (a clearly defined starting point in time for baseline data) against which changes can be assessed (i.e. determining the relevant baseline year/s for ex post evaluation) (given variability there may need to be several years to create a ‘baseline’)

5. choosing socio-economic indicators of ESSW

6. producing MER information that contributes to various reporting requirements, including SOCs, CAP audits, CMA annual reports as well as mechanisms (or institutions) that enable responses to the lessons learned.

Each of these prerequisites is explained in more detail in the following sections.

3.2.1 Defining the goals of the ESSW assessment 

The goal of the ESSW assessment determines how it fits within the adaptive management cycle. It determines the questions that the assessment might answer and the context in which they might be answered, such as through a SOC report, CAP audit or annual report.

3.2.2 Planning the approach 

A structured approach to ESSW MER depends on different sets of data, which would be defined by the questions asked. Firstly, the investment in NRM programs and projects will need to be considered on a target by target basis and broken down by indicator. Secondly, the biophysical outcomes will need to be assessed at the ESSW indicator level (taking into account that ‘flow-on’ effects may be difficult to measure or have lag times). A matrix of the impacts becomes a planning tool across the investment strategy to work out what ESSW indicators are important, what targets are important and where CMAs could then use the seven-step rapid assessment technique to test the outcome. This type of 'map' would aid transparency and allow an effective design of a cross-target investment analysis (Table 3).

3.2.3 Gathering data for ESSW MER 

A review by Vernon et al. (2009) of a range of data collection methods identified databases from the Australian Bureau of Statistics (ABS) as a major source of readily available quantitative information. The Australian Bureau of Agricultural and Resource Economics (ABARE) may also have relevant databases. For qualitative information, focus groups and semi-structured interviews were identified as the best way to collect the views of stakeholders in various catchments.

Participants would be guided through a series of questions to collect information about their views on the impacts of NRM and on the contributions of NRM decisions to ESSW in their local area. The choice of indicators and the choice of questions would depend on the context of the assessment. A process for the assessment also needs to be considered. Ideally, the process should:

• collect existing data and information • collect information not otherwise available from existing studies • collect information at a relevant scale (achieve proportional accuracy) • be simple and relevant (identify what is not worth knowing) • fit with NSW monitoring, evaluation and reporting requirements • be cost effective and repeatable • minimise stress for the stakeholder volunteers involved • collect information that is easy to store, interpret, present and communicate • be transparent.

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Table 3: Assessment of ESSW outcomes by ESSW indicators

Targets

% of total

spend

Outcomes for business profitability

Outcomes for employment

Outcomes for formal &

informal skills

Outcomes for community networks & interaction

Outcomes for effective NRM

decision making

Outcomes for participation in

NRM

Example for Target 1: Native vegetation Project outputs are: - Woody native vegetation extent - Non-woody native vegetation extent - Native vegetation type - Native vegetation condition

Target 2 Target 3 Target 4 Target 5 Target 6 Target 7 Target 8 Target 9 Target 10 Target 11

Note: See Appendix 2 for the full list of the biophysical target indicators

The development of a rigorous process for gathering information depends in part on the assurance that CMAs/agencies can provide. It might be useful in this context to consider initiatives in assurance, such as the AA1000, developed by AccountAbility (2008a; 2008b). The work of Martinov-Bennie and Hecimovic (2010) on assurance of NRM is also relevant.

AA1000 is a freely available assurance standard used ‘to evaluate the way reporting organisations manage sustainability’ (AccountAbility 2008a:6). While its application differs from the administration of audits of the NRC’s Standard for Quality Natural Resource Management, aspects of the AA1000 assurance process are relevant to audits of the thirteen State Plan targets because the AA1000 ‘standard may also be useful to report preparers seeking assurance in accordance with this [AA1000] standard’ (AccountAbility 2008a:8). The key principles of AA1000 are Inclusivity, Materiality and Responsiveness: Inclusivity: Inclusivity is defined as ‘participation of stakeholders in developing and achieving an accountable and strategic response to sustainability’ (AccountAbility 2008b:10). This principle would require CMAs/agencies to engage with all stakeholders in a socio-economic profiling or cross-target investment analysis (AccountAbility 2008:11).

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Materiality: The materiality principles requires 'determining the relevance and significance of an issue to an organisation and its stakeholders' whenever the ‘material issue is an issue that will influence the decisions, actions and performance of an organisation or its stakeholders' (AccountAbility 2008b:12). Materiality indicates whether the CMA/agencies involved have included the required information about performance towards a target that is necessary for others to make informed decisions and judgments about performance. The AA1000 system tests whether CMAs/agencies have understood the material issues concerning a target and whether they have presented a complete and balanced view of its impacts. Responsiveness: Responsiveness is the ‘organisation’s response to the stakeholder issues that affect its sustainability performance and is realised through decisions, actions and performance, as well as communication with stakeholders’ (AccountAbility 2008:14). Responsiveness is an indication of the CMA/agencies willingness to take a relational view of stakeholders and engage in discourse with them. This is reflected in the CMA/agency response to stakeholder concerns that affect the performance regarding a target and whether this has been communicated in an annual report or other documents. A concerted focus on these three principles as part of the seven-step rapid appraisal technique – explained below – would further assist CMAs in socio-economic profiling and cross-target investment analysis.

3.2.4 Choosing appropriate baseline data to assess change 

As already noted in Section 3.1, there is no previously agreed ‘standard’ on how to assess the condition of ESSW. Consequently, there is no pre-existing baseline against which to report progress, except for indicators such as those for which ABS data are available. The same problem exists for many of the biophysical indicators. However, some biophysical targets are based on a pre-European settlement baseline.

For ESSW purposes, and given the reporting timeframe of 2015 for all targets, the relevant baseline has been determined to be 2006 for some of the indicators. Baselines for other ESSW indicators will need to be developed on an ongoing basis as new information becomes available. The initial SOC reports also provide information which enable comparisons between issues (e.g. demographics versus employment) and between catchments (DECCW 2010). However, the focus of the SOC reports is on reporting trends against designated criteria through to 2015.

3.2.5 Choosing socio­economic indicators of ESSW 

The indicators and the rapid appraisal method were initially developed and tested by I&I NSW (and the former NSW Department of Primary Industries) as part of the 2006–2009 NSW MER Strategy. The method was subsequently developed and applied to produce the initial SOC reports about condition and trend, then modified to widen its application to cross-target investment analysis to assess the contribution of investment in NRM to ESSW. The condition indicators are affected by the following main pressures: population change; drought/climate change; market incentives; industry impacts; and technology. These pressures will vary from catchment to catchment and might influence the choice of additional indicators. In other words, in conducting socio-economic profiling or cross-target investment analysis it is important to retain the six indicators identified in Section 3.1 (see also Section 4), but at the same time expand the indicators if required to include others more specific to the region.

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3.2.6 Producing MER information for various reporting requirements 

It is important to align evaluation methods with the purpose of the data, the reporting product and audience of the report. It is anticipated that socio-economic profiling will support preparation of the SOCs, and also feed broad information about the community of interest into CMA annual reports and CAP upgrades.

Cross-target investment analysis contributes more detailed information about past and future investment and could contribute to sections in SOCs about management activity. The most substantial benefit from applying cross-target investment analysis to ESSW, however, could be derived through embedding the data collection and analysis in the CAP review and upgrade processes. At a project level, cross-target investment analysis may provide insights into specific investment decisions (such as investigating the success of incentive programs), which could also be reported in CAP review documents. CMA annual reports, especially the more substantial report provided on a triennial basis could also draw, not only from the profiling, but also from the cross-target investment analysis.

3.3 The seven­step rapid assessment technique for ESSR MER Our approach to ESSW MER involves a seven-step rapid assessment technique for both socio-economic profiling and cross-target investment analysis. This rapid appraisal approach to ESSW MER involves a broad, flexible way for CMAs and other NRM agencies to monitor, evaluate and report on status and trends in ESSW and the contribution of NRM decisions to ESSW. It combines consultative activities (semi-structured interviews, focus groups and surveys) with a review of statistical information from sources such as the ABS and ABARE.

The rapid appraisal method used to develop the initial SOC report cards was piloted in two NSW catchments and then applied in eight of the remaining 11 catchments (Vernon et al. 2009). This method is called socio-economic profiling in this Technical Report. A second trial examined cross-target linkages (formerly called cross-theme linkages) between marine waters and ecosystems (Target 4) and invasive species (Target 7) and ESSW outcomes at the sub-catchment scale (Gale, Thomason and Milham 2009; Gale and Milham 2009).

As a result of these refinements, a seven-step rapid assessment technique has been developed for ESSW MER (Figure 5). Details on how to carry out a focus group or survey are provided in Vernon et al. (2009) and White et al. (2010).

The seven-step technique guides the conduct of the socio-economic profiling method to gather relevant information on ESSW status and trends for SOC reports, and the cross-target analysis method for more investigative purposes such as assessing contributions of NRM investment decisions to ESSW. Application of this seven-step technique is contingent on the following seven auditable outcomes from the NRC’s Standard for Quality Natural Resource Management (2005a:5): collection and use of knowledge; determination of scale; opportunities for collaboration; community engagement; risk management; monitoring and evaluation; and information management (see also Martinov-Bennie and Hecimovic 2010).

Application of the seven-step technique is also contingent on the logic of the framework supporting a program. This program logic ‘defines the expected relationships between investment, outputs and outcomes’ and can be used as both a planning or evaluation tool (DECC 2009:20). Frequently the biggest issue is the articulation of program logic (i.e. of the relationships between investment, outputs and outcomes). Once this is clear the specification of biophysical change would need to occur before the assessment of implications for ESSW.

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STEP 1 Plan the

ESSW MER

STEP 2 Select

indicators and formulate questions

STEP 7 Initiate

CMA/agency ‘organisational

learning’

STEP 3 Review

existing socio-economic data

and/or investment programs

STEP 4 Decide who to

talk to

STEP 5 Collect

qualitative data

STEP 6 Collate data from different

sources

The working group: - repeats the focus group process with CMA staff and compares the findings to those provided by the community (i.e. organisational learning for the CMA and agency responsible for the biophysical target); and, - finalises the report to include the CMA/agency learning.

The working group: - collates data gathered from surveys, focus groups and interviews; - document the findings and implications for future NRM investment;

and - prepares a draft report suited to the target audience.

The working group: - arranges and conducts interviews and focus groups – mail out or phone survey participants (it is a good idea to test the questions first with a small number of people).

The working group: - selects relevant stakeholder groups to assist with appraisal of ESSW condition indicators and cross-target investment analysis; and, - identifies and invites individuals from within stakeholder groups to participate in interviews and focus groups following established procedures for interviews and focus groups.

The working group (depending on the purpose of the ESSW MER established in Step 1): - reviews existing information from ABARE, ABS and other sources – adds this to information held by the CMA and updates other socio-economic profiles for the catchment, sub-catchment and project area and/or reviews information about investment programs in improving biophysical resource condition or adaptive capacity; and, - identifies relevant socio-economic indicators and considers the influence of factors other than NRM decisions on socio-economic indicators.

The working group (depending on the purpose of the ESSW MER): - selects socio-economic indicators for socio-economic profiling (from Appendix 1) or selects socio-economic and biophysical indicators for cross-target investment analysis (Appendices 1 & 2); and - formulates a set of questions for surveys, focus groups and interviews that ask participants about how biophysical change has affected ESSW (these questions should be more detailed at the project scale).

CMA/agency determines the purpose of the ESSW MER (the preparation of a SOC report or the analysis of investment decisions) and establishes a working group to undertake the work. CMA/agency ensures that prerequisites for undertaking rapid appraisal are taken into account in the design of the ESSW MER process.

STEPS ACTIONS

Figure 5: The seven-step technique of rapid assessment for ESSW MER

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The seven-step rapid assessment technique is based on a number of considerations. It is important to complete the planning component of Step1 before embarking on any engagement. Step 2, in which indicators and questions are identified, is also critical to the success of the assessment.

This rapid assessment technique is flexible because questions used in surveys, interviews and focus groups can be tailored and adjusted to the focus or scale of the appraisal. However, the greater the consistency in its application across catchments the greater the opportunity to provide a State-wide picture about the broad merits of investing in NRM, especially given the interest of NSW Treasury and other funding bodies in structured data gathering and analysis.

Questions need to be ‘fit-for-purpose’ and will vary depending on the outcome sought for the rapid appraisal. On the one hand, the questions used to generate the initial SOC reports were framed for identifying catchment scale conditions and trend and broad linkages between NRM investments in general and socio-economic change. On the other hand, in the cross-target trials the questions were focussed on identifying linkages between a particular biophysical indicator and socio-economic outcomes (Gale, Thomason and Milham 2009). Additional questions were added to focus group meetings to draw out discussion on whether biophysical assets were in decline and to explore potential economic and social drivers (and implications) of these changes. Examples of questions designed to explore cross-target investment analysis are given in Section 5.

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4 Applying the seven­step rapid assessment technique to socio­economic profiling 

We have noted throughout this Technical Report that socio-economic profiling was used to gather information for the initial 2008 SOC reports (DECCW 2010). These 2008 reports were prepared according to the steps set out by Vernon et al. (2009), now replaced with our seven-step rapid assessment technique. The main difference is that a new final step involves organisational learning for CMAs and agencies which could be considered in the next round of SOCs. Organisational learning would address, in part, issues raised in socio-economic profiling as well as issues about the implementation of adaptive management at the regional scale (see, for example, Allan and Curtis 2005).

Socio-economic profiling addresses the requirement to gather socio-economic data for State of the Catchment reports. The method developed for gathering data for these reports involves a rapid appraisal technique to create socio-economic profiles at the catchment level, which are partly based on community deliberations about resource conditions and trends.

As a result of I&I NSW's activity a template now exists for this work, and profiles have previously been prepared for eleven of the thirteen CMAs (two declined) (DECCW 2010). The list of questions used in this template appears in Table 4 (see also Vernon et al. (2009) and White et al. (2010) for supporting details). The process of undertaking a socio-economic profile requires a consideration of the points raised in Sections 3.2.1 to 3.2.6 (after Vernon et al. 2009) and the seven-step technique of rapid assessment proposed in this Technical Report (Figure 5).

Given the importance of the ESSW indicators to SOC reports, the following sections provide descriptions of each indicator and explain how the data presented in the reports were collected, analysed, interpreted and then converted into scores for resource condition. The rationale for indicator selection is provided in Table 5. The initial assessments were intended to provide a broad overview at State and catchment level and a similar approach would be likely as the basis for future SOCs. However, it is also likely that the work to date would be supplemented with additional data and, ideally, that future SOCs would provide case study information from cross-target investment analysis.

4.1 Business profitability, sustainability and expansion It is axiomatic in economics that because businesses need investment to grow and prosper they must earn sufficient profit to maintain access to financial capital markets. In other words, businesses must generate at least enough profit to cover the cost of capital – businesses must pay for their debt and equity financing. These minimum profit requirements enable businesses to sustain their current operations and maintain their wealth producing potential. In the long run, agricultural businesses must also invest in innovations that help them to stay ahead of terms of trade pressures.

Reeve et al. (2007) discuss a broader framework for considering the role of capital in determining the economic condition of a region. They point out that in general, capital is a stock of something that generates a benefit over an extended period. Societies are dependent on a wide range of items of natural capital (stocks of non-renewable resources and eco-system functions) that deliver services over time. The relationship between natural capital and the services it delivers is analogous to the relationship between conventional (built) capital and the services it delivers: if the stock or value of capital declines, so does the flow of services from it, and the system of which it is a part can be said to be unsustainable in some sense. Therefore, in the NRM context,

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businesses have an interest in improving, maintaining, or at least slowing the decline in the natural capital on which they depend.

Table 4: Questions asked in focus groups and interviews in Phase 1 1. Economic sustainability and social well-being – current situation In a general sense, how do you think that the community and economy of the catchment are going at the moment? If you had to rate it from 1-5 what would it be? Why?

Poorly Well 1 2 3 4 5

Reasons: 2. Economic sustainability and social well-being – maintaining health (a) When you think of the catchment, what are the things that you feel are most important in maintaining a healthy community and economy? Social: Economic: Prompts: What about in terms of social connections, participation and function of organisations? Prompts: What about in terms of employment, income, business profitability and value of assets? (b) Which of the things above do you agree on and which are debated? Social: Agreed aspects / Debated aspects Economic: Agreed aspects / Debated aspects 3. Identifying landscape changes (a) Over recent years, what changes in the environment have you noticed across the catchment? What has caused these changes? Who has been involved? (b) What change(s) can you attribute to CMA activity? 4. Economic impacts of landscape changes What impact do you feel these environmental changes have had on the economy in the region? How do these relate to the issues we discussed in question 1? Strong / no impact / weak 5. Social impacts of landscape changes What impact do you feel these environmental changes have had on the community? How do these relate to the issues we discussed in question 1? Strong / no impact / weak 6. Community engagement (a) How has the way the CMA works with community members impacted on economic and social well-being in the region? How else has the CMA influenced connections and networks within the community? Social: Positive None Negative Economic: Positive None Negative Prompts: connectedness, participation and governance (b) Which of these do you all agree on? Agreed areas: Debated areas:

7. What kind of further activities would make a positive difference to the social well-being and/or economy of the community? What could the CMA do differently to better incorporate social and economic dimensions in decision making? (e.g. representation, education activities).

8. Do you have any further comments?

Source: Vernon et al. (2009)

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Table 5: Rationale for indicator choice Choice of Indicator

Business profitability, sustainability and expansion

Importance to ESSW is high, its relevance to change in NRM is high, and it was judged to be medium in terms of its ease of measurement.

Increased opportunities for employment

Importance to economic sustainability and social well-being (ESSW) is high, its relevance to change in natural resource management (NRM) is high, and it was judged to be medium in terms of its ease of measurement.

Gaining formal and informal skills

Importance to ESSW is medium, and though it need not necessarily have direct relevance to changes in NRM, the way in which NRM is practised often helps to improve formal and informal skills. It was judged to be medium in terms of its ease of measurement.

Community networks and interaction

Importance to ESSW is high, its relevance to change in NRM is high, and it was judged to be medium in terms of its ease of measurement

Participation in NRM decision making

Importance to ESSW is high, its relevance to change in NRM is high, and it was judged to be medium in terms of its ease of measurement.

Effectiveness of NRM

Importance to ESSW is high, its relevance to change in NRM is high, and it was judged to be medium in terms of its ease of measurement

Source: (Vernon et al. 2009)

In the context of Target 12, profitability, sustainability and expansion levels were judged to be medium in terms of ease of measurement. Farm profitability per se is already recorded by ABARE but, as with the other indicators, the difficulty comes with the problem of attribution to NRM decisions. The rapid appraisal used for the SOC report cards relied on quantitative (ABARE) data and the triangulation of qualitative data generated from focus group discussions and semi-structured interviews with individuals selected from a range of stakeholder groups in each catchment. The focus group discussions and the semi-structured interviews were designed to reveal instances in which NRM decisions had either increased or decreased profitability, sustainability or expansion.

4.2 Increased opportunities for employment  ‘One aspect where all research on subjective well-being does agree concerns the high human costs associated with unemployment’ (Stiglitz et al. 2009). There is a body of research that suggests that unemployed people report lower life expectations than do the employed. This is the case even after the research results have been controlled to allow for the unemployed person’s lower income. The unemployed report feeling more sadness, stress and pain than the employed. Job loss can also lead to economic insecurity when unemployment is recurrent or persistent, or when unemployment benefits are low relative to previous earnings. The fear of job loss can have negative effects on quality of life, for example by causing physical illness, mental illness or tensions in family life. As well as generating stress and anxiety in the people concerned, this insecurity may make it harder for families to invest in education and housing (Stiglitz et al. 2009).

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Employment levels are highly relevant to NRM in several senses. In the most basic sense, if there is a decline in the capacity of natural resources to meet current and future needs of people and the economy, then this will be reflected in lower employment levels. Conversely, if there is an increase in the capacity of natural resources to meet current and future needs, then this will be reflected in higher employment levels than would otherwise have been the case. In another sense, if unemployment is high in a catchment, then any jobs created through NRM per se will contribute to ESSW in that catchment. This is not to say that NRM should focus on make-work activities, rather it is an acknowledgement that it may have positive side effects. Conversely, NRM decisions may also have negative side effects. For example, a decision to stop the unsustainable use of a particular resource might reduce employment in the catchment in the short term.

In the context of Target 12, the ‘ease of measurement’ of employment levels was judged to be medium. Employment per se is easy to measure, but some difficulty arises with the problem of attributing employment level changes to NRM decisions. As with every other indicator, the challenge was to distinguish between the contributions of NRM decisions and the effects of the communities’ overall vitality. The rapid appraisal used for the SOC report cards relied on quantitative (ABS or ABARE) data and the triangulation of qualitative data generated from focus group discussions and semi-structured interviews with individuals selected from a range of stakeholder groups in each catchment. While the approach used was not as formal as that used by Prell et al. (2009) and other researchers, it was broadly consistent. Moreover, it was judged to be readily repeatable, and at low cost, by CMA staff who had received appropriate training. The focus group discussions and the semi-structured interviews were designed to reveal and explore instances in which NRM decisions had either increased or decreased employment.

The ABS data also provide important information about employment trends in different industries. Total employment in agriculture has been falling steadily in most catchments for decades. This has to do with the continuous drive for economies of scale in response to trade pressures. In part this has to do with the substitution of capital for labour. An understanding of these trends helps in interpreting the extent to which the contributions

r negative relative to the underlying trend. of NRM decisions are neutral, positive o

4.3 Gaining formal and informal skills Education is important to quality of life independently of its effects on people’s earnings and productivity. Education is strongly associated with people’s life-evaluations, even after controlling for the higher income it generally brings. Better-educated people typically have better health status, lower unemployment, more social connections, and greater engagement in civic and political life. While the available evidence does not always allow conclusions about the directionality of causation there is a consensus that attainment of formal and informal skills brings a range of returns that benefit both the person attaining the skills and the community in which they live (Stiglitz et al. 2009). Put differently, in the capitals framework outlined by Reeve et al. (2007) the attainment of formal and informal skills is a measure of human capital and improvements here help to feed into the social capital that supports changes in NRM.

In the context of NRM, the ‘gaining formal and informal skills’ indicator represents a cross-over with Target 13, which is more concerned with the attainment of specific skills to help build individual capacity for involvement with NRM. For Target 12 our interest encompasses a broader spectrum of skills: it also encompasses an interest in whether NRM decisions contribute to the attainment of skills.

In the context of Target 12, the attainment of formal and informal skills was judged to be medium in terms of ease of measurement. It is already recorded by ABS, but as with the other indicators the difficulty comes with the problem of attribution to NRM decisions.

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The focus group discussions and the semi-structured interviews were designed to reveal ring on skills attainment. instances in which NRM decisions had a bea

4.4 Community networks and interaction Social connections improve quality of life in a variety of ways. Many of the most pleasurable personal activities involve socialising, and people with more social connections report higher life-evaluations. The benefits of social connections extend to people’s health and to the probability of finding a job, as well as to characteristics of the communities where people live, such as crime rates and school performance levels. These social connections are sometimes described as social capital to highlight the benefits (direct and indirect) that they bring. The available evidence suggests that social connections benefit people in the networks, but the effects on non-participants depend on both the nature of the group and the effects being considered (Stiglitz et al. 2009).

In the context of NRM, the hypothesis is that high levels of social capital are conducive to changes in NRM that depend on collective action. It is important to note here that for the purposes of the SOC reports a subtle distinction is being made between the existing stock of social capital and the social capital that is expected to be built up through participation in NRM decision making – this aspect is discussed in relation to the next indicator.

Social capital is often measured by a community’s level of volunteering, optimism and participation in community life. The SOC report cards make use of quantitative ABS statistics regarding the percentage of the population who volunteer as a proxy for social capital; these statistics showed that this percentage is higher in the rural areas and small towns of NSW than it is in the larger population centres. The qualitative measures of

dicator. social capital are discussed under the next in

4.5 Participation in NRM decision making This indicator’s importance to ESSW was summed up, in general terms, by Reeve et al. (2007) as follows:

‘The response of rural localities to their changing circumstances has been studied for many years by sociologists and community development and local economic development specialists. One of the areas of study is how the nature of social organisation, institutions and social relationships affects the capacity of people in a locality to work together to influence the direction of social and economic development. This capacity for collective action for mutual benefit is generally referred to as social capital. There are many community and local development handbooks that summarise the findings of this work and use it to suggest characteristics that are indicative of higher levels of social capital. These characteristics include:

− high levels of trust between people in a locality, − people donate time and money to local organisations and events and believe

their actions will be reciprocated, − people feel they have a say in local decisions and can affect the outcomes, − wide support for local events, − positive attitudes to civic cooperation, − accepting of cultural diversity, − high levels of participation in clubs and associations and local events, − high levels of participation in civic activities, such as local action committees,

dense friendship and acquaintance networks, − willingness to provide support to others in times of crisis, − attachment to place,

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− able to access information and programs outside of the locality (including the internet),

− willingness to negotiate or seek mediation to resolve local conflicts, and − willingness to enforce local social norms.’

Local participation in NRM decision making is at the heart of the move to devolve responsibilities for NRM to community-based regional bodies under Australia's ‘regional delivery model’ (Marshall 2009a; 2009b). Therefore, this indicator goes to the heart of understanding whether or not that devolution contributes to improving or maintaining ESSW. This sort of social capital has very positive externalities: it lowers the costs to government of NRM.

The rapid appraisal used for the SOC report cards relied on triangulation of qualitative data generated from focus group discussions and semi-structured interviews with individuals selected from a range of stakeholder groups in each catchment. The focus group discussions and the semi-structured interviews were designed to get beyond the human propensity to focus on the things that are in most obvious need of improvement.

Vernon et al. (2009) note that:

During the fieldwork with key stakeholders and the CMA staff it became clear that despite community perception of over-consultation and few results, all groups were keen to represent their ‘patch’ and were fully engaged in the discussions for the following reasons:

The value to the broader community of an overarching socio-economic framework for NRM: Participants indicated that the socio-economic MER process should be more extensive: it is ‘the’ issue which underpins all biophysical targets.

Strengthening NRM networks: The forum of key people and CMAs in a facilitated discussion was valuable for enhancing NRM networks as these matters are not routinely discussed.

4.6 Effectiveness of NRM decision making The assumption underlying the regional delivery model is that community-based approaches are capable of motivating greater voluntary cooperation in NRM from farmers than would be possible entirely through coercion or financial inducements. Marshall (2009a) tested this assumption and his findings highlighted the importance of farmers coming to adopt ‘reciprocity’ strategies in their key institutional relationships under this model. That is, people in this setting are willing to contribute more to solving a public/private NRM investment problem the more that they trust others to help solve it. He concluded that the economic dividend from increased voluntary adoption of conservation practices under this approach arises from the reduced transaction, political and other opportunity costs of achieving the same result entirely through coercion or financial inducements.

In effect, the rapid appraisal used for the SOC report cards endeavoured to help understand whether the NRM dividend from this approach was more effective NRM decision making, and whether the social dividend was an increase in social capital – an increase in ESSW. As with the other indicators, this relied on triangulation of qualitative data generated from focus group discussions and semi-structured interviews with individuals selected from a range of stakeholder groups in each catchment.

Vernon et al. (2009) describe the following additional NRM benefits and social capital improvements that stakeholders see arising from community engagement in NRM decision making (point numbers are from the original text):

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3. Improved NRM decision making processes: Participants appreciated the integral (although sometimes subtle) connections between NRM and the vitality of their communities. They want to contribute to and feel a sense of responsibility both for on ground works and NRM decision making processes at local and state and national levels.

4. Reducing Government intervention in NRM: Government is obliged to become involved in intractable issues to promote public benefits which would not otherwise occur under market conditions. Participants indicated that they are willing to undertake practices leading to improved resource condition with minimal or no government incentives. Therefore by enhancing community ownership of NRM through the ESSW MER processes, the NSW Government is encouraging positive behavioural change within catchments and providing information necessary to effectively tackle the complexities of improving NRM.

5. Enhancing trust in NSW Government MER Strategy: Great value was placed by many participants on the draft report cards as a communication tool. A preliminary draft was used during the focus groups for evaluation of the chosen indicators’ local relevancy and to demonstrate the way participant’s information could be reported.

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5 Applying the seven­step rapid assessment technique to cross­target investment analysis 

In this section, we report on how the seven-step rapid assessment technique could be applied to cross-target investment analysis to assess the performance of investments and funded projects (i.e. investment decisions) both ex ante and ex post, and to inform the review of CAPs, with a view to improving design, implementation and outcomes from future projects.

5.1 Cross­target investment analysis: Proof­of­concept testing The purpose of ESSW MER for cross-target investment analysis is to ensure that NRM decisions (investments and projects) are made (prospectively) and have been made (retrospectively) in ways that meet over-arching public policy objectives – including that public funds are spent ‘wisely’ (in the public interest) and not in ways that merely replace spending that ought to be the responsibility of land managers acting in their own interests (see, for example, Pannell (2008)). Thus, one of the purposes of socio-economic MER is to reveal the extent to which NRM decisions are sustainable (taking future economic and social well-being into account to a greater extent than would otherwise occur), efficient (improving the well-being of society generally, including but not limited to land managers/owners), and equitable (achieving a ‘fair’ distribution of benefits and costs across different sections of the community.

5.1.1 Questions arising from the social­ecological view in systems thinking 

The social-ecological view arises in systems thinking, a variant of which is socio-ecological resilience thinking. Systems thinking is holistic and involves examining the linkages and interactions between the elements that comprise the whole of the system. It can be contrasted with mechanistic/reductionist thinking. In the mechanistic view, natural systems operate like a machine which can be assembled and the parts identified: an understanding of the system is gained by revealing the mechanisms by which the parts interact. The natural system thus functions mechanically, can be described mathematically, and can be managed by humans with sufficient knowledge. In contrast, the systems view emphasises uncertainty and unpredictable outcomes (Connick & Innes 2003).

Resilience theory is based on dynamic and complex systems and ideas involving coupled or linked social-ecological systems. It is also based on ideas about ecological thresholds, defined by Groffman et al. (2006:1) as,

the point at which there is an abrupt change in an ecosystem quality, property or phenomenon, or where small changes in an environmental driver produce large responses in the ecosystem.

The concept of resilience originated in ecology, but is increasingly being applied to socio-economic systems (see, for example, Walker and Salt 2006; Maguire and Cartwright 2008). Resilience is the ability to recover, to buffer and to adapt to stresses or shocks. Resilience can be positive or negative: it can enable recovery or it can also reinforce practices that resist change.

In resilience thinking, biophysical science, socio-economic information and community views are used as inputs in a catchment decision-making process, and participants in that process mutually adjust their views so that their views become incrementally different to those held at the outset of the process. Socio-economic processes change the structure and function of the ecosystem and, over time, ecological shifts change human well-being, culture and land use.

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The significance of ecological shifts (changes in natural resource condition) for human/social dynamics and culture depends on scale. At a localised scale (and sometimes the regional scale) this significance may be low even though there are strong implications for higher scales. The feedbacks creating ecological shifts operate over multiple spatial, institutional and temporal scales, resulting in observable cycles of growth, conservation, decay and renewal (Holling 1986; Walker & Salt 2006). This highlights the importance in pursuing the target for ESSW to account for the consequences of natural resource decisions not only for the relevant region’s short-term performance but also for its resilience (Figure 6).

Questions arising from resilience thinking for ESSW MER include:

1. What are the specific threats/disturbances in natural resource condition that have an impact on ESSW?

2. What are the thresholds relating to these specific threats/disturbances?

3. Are planning, management and monitoring implemented in such a way that NRM stakeholders learn about important system dynamics (i.e. thresholds, alternate states, feedbacks)?

4. Can the lessons from managing social-ecological systems inform future decisions (i.e. treating MER as part of adaptive management and resilience thinking)?

Human communities

Natural resources

Co-evolving & self-organising

Resilience

Target 12

Target 13

Potential impact of NRM investment decisions Adaptive capacity

Economic sustainability & social well-being

Figure 6: The relationship between resilience, adaptive capacity and economic

sustainability and social well-being

These may be ambitious questions, but they provide practitioners with an important approach to gathering information from NRM stakeholders to assess the contribution of investment in natural resource management to ESSW. The first three questions could start the process of appraisal (discussed later in this Technical Report). Supporting

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information is provided in the workshop manual (White et al. 2010) and in a workbook provided by the Resilience Alliance (Resilience Alliance 2007).

Proponents of ‘resilience thinking’ (e.g. Berkes and Folke 1998; Walker et al. 2004; Walker et al. 2006) do not propose generally that resilience be used as the only performance measure. They recognise the opportunity costs that often arise from investing in resilience, in terms of short-term performance being less than it otherwise would have been. Hence, choices generally need to be made between additional resilience and the costs of this additional resilience (Anderies et al. 2004; Janssen et al. 2007; Marshall 2008; Walker et al. 2006).

Introducing ideas from the resilience literature puts the focus on the dynamic aspects of systems, in particular their trajectories over time, whether or not those trajectories are reversible (that is, whether natural resource and socio-economic conditions recover along previous paths as a result of management interventions), and the identification of thresholds or tipping points beyond which drastic and irreversible changes in those conditions will occur.

Given that both biophysical and socio-economic systems are capable of displaying these characteristics, it could be very useful for CMAs and their communities to understand the behaviour of their region in these terms. For example, such information could be relevant in setting investment priorities (by focussing on aspects of the biophysical system that might be close to thresholds), and also in assessing the contribution of NRM decisions to ESSW. For example, even if an indicator continues to worsen, the contribution to ESSW could still be judged positive if, in the absence of the investment, it would have declined further because its trajectory is being driven by exogenous forces.

The relationships between NRM and Targets 12 and 13 are further explained in Figure 7.

NRM Decisions

Impacts

Responses

ESSW T12

Providing information about socio-ecological

resilience to inform NRM decision making

Capacity T13

Providing information to understand how

people react to NRM drivers [they may react by making their own

decisions]

Figure 7: The relationship between NRM decisions and Targets 12 and 13

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The relationships in this diagram show that:

• NRM stakeholders cannot adapt to an impact unless the impact has been felt or they can anticipate the changes that will occur (T13 solid line)

• information on ESSW can be provided to influence a decision before it has been made (T12 solid line)

• past evidence of adaptation can be used to anticipate how communities may respond to a decision and to modify the decision accordingly (T13 stippled line)

• change in ESSW in the wake of decisions can be used to help design ameliorative strategies (T12 stippled line).

5.1.2 Questions arising from vulnerability assessment in risk analysis 

Resilience thinking provides a useful way to think about ESSW, but it is not the only way of thinking about this target. There are also some parallels between ‘resilience’ thinking and concepts of ‘vulnerability’. The extent to which a given set of NRM stakeholders are likely to experience harm according to their exposure and sensitivity to stresses on key NRM assets focuses on vulnerability. Exposure refers to the amount of decline in natural resource condition; sensitivity refers to the dependency of stakeholders on the resource condition.

Progress towards Target 12 resulting from a particular investment in natural resource management could be described in terms of the decision’s impact on vulnerability of the set of stakeholders, given their exposure and sensitivity to NRM conditions and their adaptive (and transformative) capacity (Figure 8).

Exposure of community to declining condition of

natural resources

Sensitivity of community to declining condition of

natural resources

Potential impact

Vulnerability

Target 12

Adaptive capacity

Target 13

Figure 8: Target 12 and vulnerability

Systems that are highly exposed, sensitive and less able to adapt are vulnerable. Given this situation,

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Practical initiatives that tangibly address and improve societal adaptive capacity, thereby reducing vulnerability, are commonly expected to be evident at the community scale (Smit and Wandel 2006:283).

This particular conceptual model shows how regional NRM stakeholders in a catchment community are vulnerable to detrimental changes in natural resource condition, and how natural resource decisions can affect this vulnerability for good or ill. Questions arising from vulnerability assessment for ESSW MER include:

• Which NRM stakeholders are exposed to a particular stress on biophysical resource conditions (that affect assets, services and landscapes)?

• How sensitive (dependent) are they on the assets, services and landscapes under stress?

Given the above, in this Technical Report, resilience thinking is viewed as allied to vulnerability. A positive impact of natural resource decisions increases resilience and reduces vulnerability, while a negative impact does the reverse. Target 12 states that ‘NRM investment decisions contribute to improving or maintaining economic sustainability and social well-being’. Our interpretation of Target 12 views resilience and vulnerability as different sides of the same coin, and that both frameworks present investigative possibilities for ESSW.

Whereas monitoring of Target 13 (Adaptive Capacity) can provide information on how land managers may change in response to the impacts of NRM decisions, monitoring of Target 12 (ESSW) can provide information on how a natural resource investment decision has or could affect the socio-economic well-being of NRM stakeholders. Progress should be gauged in terms of both consequence for resilience and short-term performance, with choices between them needing to be resolved where they arise.

At a catchment scale, it is useful for CMAs to identify which NRM stakeholders are resilient or vulnerable to adverse effects of NRM decisions and also to determine how investments might improve ESSW for stakeholders, depending on the degree of their resilience or vulnerability. The implication of vulnerability on livelihood strategies and outcomes is explored further in Target 13 (Jacobs et al. 2010).

5.1.3 Questions on the links between NRM investments and ESSW 

The level of detail in the following questions is intended only as a guide to the range of possibilities encompassed by ‘ESSW’ as defined here. How the questions are used will of course be tailored to suit particular circumstances. The questions might guide a process similar to the Target 12 trial by providing examples of the economic and social impacts that could be considered by participants (Gale, Thomason and Milham 2009; Gale & Milham 2009). As regards ‘screening’ natural resource management proposals, one suggestion might be to combine the early stages of an INFFER process with Target 12 questions. Step 2 of INFFER is intended to filter a long list of significant assets in a region down to a short list (Park et al. 2009). To do this, community members (including technical and scientific experts) are asked:

1. How significant is the asset (in the sense of being valuable or important)?

2. Without a major new project for this asset, how damaged will the asset be in 20 years time?

INFFER ranks the answers to these questions qualitatively, for example, from ‘low’ to ‘very high’. To include Target 12 at this stage it might be possible to add the questions:

3. What is the value of the asset to the region’s ESSW? ; and

4. What is the value of the threat to the region’s ESSW?

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Specific questions might then be used to focus on the values of the asset and seriousness of the threats to it, in terms of impacts on flows from each form of capital (Section 1.3). It is important to note, however, that assessing the contribution of investment in NRM to ESSW is not just asset focused: it also focuses on services and landscapes.

5.1.4 Interpretations of the biophysical/socio­economic relationship 

Interpreting the linkages between the biophysical and socio-economic dimensions of NRM and the relative importance given to the socio-economic dimension tends to be influenced by worldviews (the ways individuals perceive and understand reality) and the values associated with particular worldviews. Vatn (2009) explains how appraisal methods can themselves be seen as value articulating institutions, a view which implies that the underlying values of the analyst can be inferred. For example, benefit cost analysis, multi-criteria analysis and stakeholder deliberation are three different appraisal methods for articulating and assigning value to assets and services within a catchment. The appraisal methods used by CMAs in setting targets, and evaluating alternative investment opportunities for pursuing those targets, are value articulating institutions (i.e. the rules of the game). In choosing among these three alternative appraisal methods, a management body such as a CMA is expressing the ways in which its stakeholders understand and value the world.

The evaluation method associated with each approach is based on a particular view of how investments should be decided and distributed and of the relationship between managing the biophysical dimensions of NRM (the land, water and biodiversity issues and resources) and the socio-economic or community dimensions (community engagement, manager capacity and the influence/relevance of social and economic outcomes and conditions). Depending on the budget and expertise available, CMAs have a choice between conventional (mechanistic) thinking (e.g. through benefit cost analysis (BCA) or multi-criteria analysis (MCA)) and more deliberative methods such as resilience thinking or vulnerability assessment (e.g. through stakeholder deliberation) for developing or choosing an appraisal method.

In relation to how investments should be decided, depending on the situation, some CMAs appear to take a participatory and discursive approach to decision-making (based on deliberative rationality) whereas others follow an approach based on empirical rationality – either scientific or economic. We recognise that the decision made through a CMA Board in a ‘democratic’ or participatory way may be the outcome of a range of influences.

Marshall (2010) found that the three CMAs with which he trialled an economic method for evaluating investment decisions recognised the importance of addressing socio-economic factors and issues as part of this process. Nevertheless, the motivation of some CMAs to implement this INFFER method (which Marshall’s method extends) has been noted as low due to organisational inertia and the additional demands the method makes on the time of their staff (Pannell et al. 2009).

Responses by participants at consultation events organised by I&I NSW during the course of developing and refining the appraisal process for ESSW ranged from a perception that some economic concepts were part of the problem of poor NRM outcomes and therefore not especially relevant to NRM, to the view that socio-economic and biophysical issues are strongly coupled. Marshall (2010) found that the three CMAs he worked with rated on average the criteria for choosing an evaluation method in the following order (out of 20 criteria):

• ‘Strengthens your CMA’s confidence that the prioritised investments represent ’value for money’’’ − the second most important criterion

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• ‘Is practical to apply given the skills and time available to CMA staff’ − the third most important criterion

• ‘Is based on sound economics’ − the twelfth most important criterion.

The literature on relationships between biophysical and socio-economic systems spans a progression of logics. At one end are thematic indicator logics based on the frameworks of Pressure-State-Response (PSR) or Drivers-Pressures-State-Impacts-Response (DPSIR) which arose in the 1980s through ecosystem and ecosystem services logic – such as used in the Millennium Ecosystem Assessment framework (MEA 2005). At the other end is the application of frameworks such as vulnerability assessment and resilience thinking.

The NSW 2006 State Plan compartmentalises the eleven biophysical targets into land, water and biodiversity themes. The SOCs then separately identify pressures which are affecting the condition of the resource and (in theory) logical responses which address the problem. The focus is on assessing condition by using a set of objectively measurable indicators. The approach is rational, scientific measurement; and even though many of the pressures are anthropogenic, there is little incorporation of human values. Change in condition is referenced back in time to an established baseline or sometimes to an idealised ‘pristine’ condition.

The Millennium framework keeps socio-economic factors separate from biophysical condition while changing the focus from themes to ecosystems and from the impact of human activity on the environment to the role played by ecosystems in delivering ecosystem services which are essential to human well-being. In this model, economic sustainability is embedded in the definition of well-being.

This Technical Report acknowledges that all these approaches are currently active in NRM. However, the interpretation of ESSW, choice of indicators and the appraisal method outlined in Section 3 draw on the emerging understanding of co-evolving systems in which socio-economic and biophysical dimensions of NRM are inter-dependent.

5.2 Examples of cross­target investment analysis  As well as having significant impacts on the productivity of farming land and farm incomes, many natural resource issues have, on closer analysis, special ‘socio-ecological’ or ‘public good’ dimensions which pose particular policy challenges. Problems such as weed infestation, improving water quality, rising water tables, salinity and the like require collective action – working together – on the part of affected landholders. An important feature of such problems is the ability of some landholders to ‘free ride’ on the benefits of work undertaken by others.

A notable element of such projects is that if free riding exceeds a threshold, then the trust, reciprocity and co-operation necessary to ensure a useful result can ‘begin to unravel in a vicious circle’ (Marshall, 2004). Attention to building capacities in trust, working collaboratively and other aspects of social capital become particularly important for these types of projects to succeed.

In the seven-step technique for cross-target investment analysis, it is not only important to determine the purpose of the analysis but also the questions required to gather relevant information. Inevitably the questions to be raised will depend on the working groups’ deliberations about which targets (and indicators) are to be considered in a cross-target investment analysis and whether the focus of the questions should be on assessing resilience, vulnerability or assets. An example of the sort of questions that might be used in an asset-based approach is provided in Appendix 3.

The analysis is contingent on an evaluation of the outcomes from investment in addressing a biophysical target. Once the outcomes are known, the analysis of the ‘flow

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on’ effects to ESSW would be investigated using the seven-step rapid assessment technique, and questions from either a resilience, vulnerability or assets perspective would be included in addition to the questions for socio-economic profiling.

While the initial set of Target indicators would serve as a common set of indicators, that is, business profitability, sustainability and expansion; employment; level of formal and informal skills; community networks and interaction; participation in NRM; and effective NRM decision making, other indicators specific to the cross-target investment analysis could also be included.

This Technical Report provides a number of examples of links between indicators of a biophysical target and ESSW, noting that the analysis of specific investments has yet to be considered in terms of the Target 12 indicators. For this reason, the technique continues at the ‘proof-of-concept’ stage.

5.2.1 Targets 4 and 12: Invasive Species and ESSW 

In this section case studies of cross-target analysis are described commencing with the impact of invasive species, Target 4, on ESSW (Target 12). Target 4 is that ‘By 2015 there is a reduction in the impact of invasive species’. Although a specific ‘investment’ study has yet to be conducted, an earlier study of the links between the two targets was conducted in the Belubula sub-catchment of the Lachlan CMA based on three indicators: invasive freshwater fish, wild dog stock losses and fox threat abatement3 (Gale, Thomason and Milham 2009).

Invasive freshwater fish and ESSW

In this study, focus group and survey respondents were asked to note any changes in invasive freshwater fish and the reasons for the changes. The Belubula landholders focus group did not see invasive freshwater fish, carp, for example, as being significant issues in their sub-catchment – although they did recognise them as an issue further downstream. The situation was described as stable in their part of the Belubula River at the top of the catchment and that waterfalls prevented invasive species moving upstream. The CMA staff had a different view. The CMA staff identified carp as a general community concern; and hence ‘carpathons’ were organised, seen as entertaining and a good excuse to get together. They also observed that there is anecdotal evidence that native fish, e.g. cod are building up again. For Aboriginal people, carp is a significant problem. They readily identify carp as an adverse presence because they are predators of native fingerlings (which are now very scarce) and which are traditional totem animals (e.g. yellow belly). Carp also muddy water, undermine creek banks and cause siltation. Projects to reduce carp populations are well regarded and supported by Aboriginal people (e.g. the Lake Brewster project elsewhere in the Lachlan CMA). A specific cross-target investment analysis of this topic would involve delineating the outcomes of CMA investment in invasive freshwater fish and impacts on ESSW. There would seem to be a number of social-well being benefits in particular, notably ‘carpathons’ and increasing the presence of totem animals to meet Aboriginal needs.

Wild dog stock losses and ESSW

The impact of wild dogs (dingoes, feral domestic dogs, and their hybrids) is one of the invasive species indicators. Wild dogs prey on both native animal and domestic livestock, and are therefore threats to both natural resources and the viability of commercial agriculture. While imposing very significant economic costs on graziers,

3 Selected by the NRC as key pest animal species for reporting purposes and accepted by the invasive species MER implementation team (an interdepartmental group of specialists).

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there can also be significant flow-on effects to the local community. For example, predation of lambs by wild dogs adds to the pressure on sheep graziers to switch to cattle, because the latter are perceived to be less vulnerable to attack. The movement out of sheep and into cattle reduces the number of people employed in agriculture, since cattle are much less labour-intensive. In a small community, the movement of shearing teams out of town can reduce the number of students in local schools, and therefore the viability of those schools, or at least the loss of one or more teachers. As more properties move out of sheep and into cattle, the vigilance of landholders towards the control of wild dogs declines, putting more pressure on sheep farmers, and creating social tensions in the community.

The cross-target investment analysis of this topic involves investment in wild dog stock loss programs and the impact, if any, on ESSW.

Fox threat abatement and ESSW

The cross-target investment analysis of this topic involves investment in fox threat abatement, outcomes for that investment, and the impact, if any, on ESSW. In an earlier study, focus group and survey respondents were asked what changes they noticed regarding foxes as pests and the reasons for the changes. The Belubula landholders view was that foxes are a significant but stable problem. No changes have been noticed, though landholders had hoped for a reduction in fox numbers. Animal welfare concerns mean there is no longer a market for fox skins. In the absence of fox shooters people rely on baiting for control. The reason given was that fox control calls for cooperative management – baits need to be laid on neighbouring properties in a coordinated way. However, lower sheep numbers mean that fewer people are seeing the problem first-hand – therefore it is harder to get cooperation. In its heyday Landcare used to organise cooperation. The Aboriginal view was that there are probably more foxes about since the People for Ethical Treatment of Animals campaign. Prior to that, fox skins were worth a lot of money. However foxes don't necessarily interfere with cultural practices although some people would still harvest goannas and have small reptiles as totems which the foxes eat; so this is considered a negative outcome for their spiritual beliefs. The CMA staff responded that fox numbers were on the increase. The reasons are that cattle producers don't put out poison bait and there has been a change away from sheep to cattle due to changes in profitability (less labour is required for cattle). The timing and co-ordination of baiting needs to be improved: the change from wool to meat sheep enterprises means that these enterprises have different lambing times. It was stated that people only value the impact on livestock, not on the native fauna.

5.2.2 Targets 7 and 12: Marine Waters and Ecosystems and ESSW 

Target 7 specifies that ‘By 2015 there is no decline in the condition of marine waters and ecosystems’. Four pre-determined indicators apply, namely, the presence of rocky reef biota, the frequency of algal blooms, recreational water quality in metropolitan areas, and the extent of marine protected areas (MPA) (Gale, Thomason and Milham 2009).

In an earlier study, two of the resource condition indicators were considered for this target on the Coffs Harbour Coast: the extent of marine protected areas (more an indicator of a change in pressure than a condition indicator) and the frequency of algal blooms. Recreational water quality in metropolitan areas and rocky reef species were not considered in the pilot study. Recreational water quality is monitored through Beachwatch programs and is concerned with public health (sewage contamination and waterborne pathogens). In the Coffs Harbour Coast area, however, there was no Beachwatch program so this indicator could not be considered. The absence of a Beachwatch indicator led to consideration of the management of a pressure indicator (rather than a resource condition indicator). This led to the choice of wave impact, a pressure on resource condition, particularly dunes, for which there was active public

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interest. Comments on dune care were also sought from focus groups and CMA participants. The rocky reef species indicators were also not considered as data collection has only just started in this region.

The impact of the extent of Marine Protected Areas on ESSW

The rationale for public investment in the Solitary Islands Marine Park is to restrict access for private benefit purposes that have negative environmental impacts so as to preserve a representative set of marine ecosystems and rebuild depleted fish stocks on the New South Wales coast. Additional rationales are to protect ecosystems. These rationales fall outside the jurisdiction of CMAs. However, it is evident that run off from adjacent land and estuaries have significant impacts on marine ecosystems, such that decisions in farming practices, land use, riverine care and so on can have substantial impacts on marine waters. This is a clear instance where CMA staff could consider the cross-target investment impacts of their NRM investments in marine waters and ecosystems and the flow on impacts, if any, to ESSW. The community views on the area of the marine park were generally positive. Participants thought that the broader community accepted the park, although there might be a grudging acceptance on the part of some commercial fishers. Other fishers were not convinced that the benefits of the Marine Park offset the economic cost of reduced fishing. So for these fishers there was the perception of a negative impact on business profitability. In contrast, however, the tourism industry generally cited the benefits of the marine park on economic sustainability. These tourism benefits were modest, but nevertheless important.

Three examples of CMA investment decisions addressing commercial fishing, Aborginal fishing and tourism in the marine park were noted as benefits:

1. The investment in by-catch reduction devices for fishers in the area. This reduced the amount of discarded fish and hence led to less waste in commercial fishing and thus less waste disposal.

2. The restoration of Aboriginal fish traps. This was considered culturally significant, and therefore constitutes a social well-being outcome.

3. The investment in moorings in the marine park. This helped prevent anchor damage from dive tour operators on rocky reefs. This represents both an environmental and economic sustainability outcome.

The impact of the frequency of Algal blooms on ESSW

The frequency of algal blooms is one of the indicators of Target 7 on marine waters and ecosystems. Algal blooms are not always a meaningful indicator of water quality: it depends on whether the algal bloom is produced naturally through an upwelling of nutrients in the ocean off the coast or human induced through nutrient runoff from coastal rivers discharging into the marine waters. This distinction, however, may not be important to visitors and tourists who might simply choose to leave an unsightly area. Hence, whatever its cause, an algal bloom deters tourists and has a negative impact on ESSW. For example, a weed infestation at Mackay, Queensland, the cause of which was not identified, led to an exodus of tourists. Similarly, in an analogous example, many shellfish fisheries have been closed temporarily because of ‘red tides’, and these closures may also have impacts on tourism and hence the ESSW of local communities. The cross-target investment analysis of this topic involves Target 7 on marine waters and ecosystems, and Target 12, the impact on ESSW. The cause of algal blooms ought to be important to local authorities and parties with an interest in preventing the contamination of marine waters and ecosystems. The communities’ perspective on algal

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blooms was that healthy estuaries and appropriate regulation are generally believed to be essential to ensuring a sustainable future for recreational and commercial fishing. Whereas CMAs may not be able to do anything directly about human induced algal blooms, they could document and explain in their reports the role of NRM investments that might align with solving or addressing this problem and any flow on implications for ESSW.

The impact of Dune Care on ESSW

Dune Care projects are another example of the rationale for public investment in an activity that private firms and households will not fund. If, however, dune fencing and vegetation stabilisation initiatives are frequently washed out by high water storms, there is a good case to be made for a public benefit test to review this funding priority and the CMA’s role in ’protecting‘ this public good (coastal beach dunes). The rationale for investment is undermined if the vegetation stabilisation and fencing initiatives cannot withstand normal, annual weather events. The cross-target investment analysis of this topic involves both the outcomes of NRM investment in the Dune Care program, and flow on effects, if any, on ESSW. In this regard, it is interesting to note that the local community had mixed views about the importance of dune stabilisation in terms of ESSW benefits. Investment in the community Dune Care activities had changed, however, and was now targeted at areas above the assumed changes to the high-water mark estimated from climate change impacts.

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6 Summary 

This Technical Report explains a seven-step rapid assessment technique for assessing Target 12 of Priority E4 of the NSW State Plan that, ‘Natural resource decisions contribute to improving or maintaining economic sustainability and social well-being’ (ESSW).

The seven-step rapid assessment technique consists of two methods, socio-economic profiling and cross-target investment analysis.

The socio-economic profiling method was used to produce the initial 2008 SOC reports on Target 12 for CMAs (DECCW 2010). Information in these published reports covers the status and trends of a range of socio-economic indicators and provides a benchmark for comparative purposes for a subsequent round of SOC reports.

The second method, cross-target investment analysis is designed to assist CMAs and agencies in reviewing CAPs, and in assessing the performance of investment strategies and funded projects (i.e. investment decisions) with a view to improving design, implementation and outcomes of future projects.

Whereas the socio-economic profiling method has led to the production of SOC reports on Target 12, cross-target investment analysis is still at the proof-of-concept stage. The seven-step rapid assessment technique, however, is sufficiently developed to guide both methods and provide CMAs with a quick, low cost, repeatable and consultative approach to ESSW MER.

Targets 1 to 11 are biophysical targets relating directly to natural resource management activities. Target 12 is unusual in that it requires those with expertise in natural resource management to monitor, evaluate and report on how they have contributed to a community socio-economic goal. Moreover, that goal is difficult to measure because it is concerned with current economic welfare and social well-being, as well as the sustainability of those current levels into the future. A further difficulty with the Target is that many other factors are far more important influences on ESSW in a catchment than are the investments of CMAs or other NRM agencies. I&I NSW, for example, also makes investments in well-being through extension programs; and other agency programs are likely to cover CAPS as well. Target 13 is also a community target, but is directly focused on improving landholder capacities in natural resource management.

Given these considerations, Target 12 is not generally amenable to assessment through readily available empirical data. In very few instances will data be available to show a change that can be confidently attributed to specific investment decisions in NRM. A focus group process does, however, permit a qualitative assessment based on stakeholders’ perceptions. This qualitative assessment is the methodological centrepiece of ESSW MER. Whenever empirical data is not available or cannot be gathered in meaningful timeframes, we can still usefully ask relevant stakeholders what they think about a given NRM issue or how investments in NRM contribute to or maintain ESSW.

This Technical Report suggests that a seven-step rapid assessment technique be used at a catchment scale to gather information relating to Target 12. The ‘rapid’ part of rapid assessment signifies that the time taken to undertake this form of assessment is intended to be relatively short, and the cost to be less, than more in-depth ways of evaluation. Rapid assessment is not a replacement for all forms of in-depth assessment since the most appropriate type of assessment will depend on the context of the investment appraisal to be undertaken. In instances where rapid assessment is appropriate, the findings may identify issues where in-depth approaches are more relevant. The inclusion of a participatory approach in the method emphasises that the

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community will participate in the identification of relevant information through focus groups, interviews and surveys.

A rapid assessment technique eliciting information for Target 12 by inquiring as to the effects of natural resource investments in a catchment (ex poste), using an economy of time and resources (as promised by the method), focussing on questions around a few key indicators (such as those discussed in this Technical Report) and using a well selected group of participants, offers the promise of a cost-effective way to deal with the challenge Target 12 poses. It is able to provide valuable feedback, including alerting CMAs to any approaching critical resource thresholds and to any problems arising in the trust and social capital that enables landholders to work towards sustainable NRM. It also provides information which can facilitate understanding as to whether operational arrangements and investment are delivering the desired ESSW outcomes. This information will then be valuable for reporting on improvement in ESSW, for use (ex ante) to design future natural resource investments and to back up future funding claims. Over the years of its use, and following the ‘learning-by-doing’ approach, much useful information should emerge.

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Appendix 1. Full list of indicators

Source: Vernon et al. (2009)

The full list of indicators of economic sustainability and social well-being (ESSW) that were assessed for inclusion in the focus group questions and State of catchment reports is provided below. The (yellow) highlighted indicators were applied in the initial state of the catchment reports (SOCs) (see Sectrion 4 of this Technical Report).

Each indicator was assessed against three criteria – its relevance to natural resource management (NRM) change, importance to ESSW and ease of measurement. The assessments are given in the table.

Full list of ESSW indicators that were assessed

Key: H – High, M – Medium, L – Low

Indicators of economic sustainability and social well-being Relevance to NRM change

Importance to ESSW

Ease of measurement

Economic sustainability

Business sustainability Business profitability and possible expansion H H M Economic resilience – ability to prepare for and absorb shocks H H M Business succession L H L Community support for business L H M

Employment Increased opportunities for employment H H M Availability of higher quality of employment i.e. skilled, career-entry, permanent

M H L

Income Annual income H H M Cash flow H H M Improved reliability of income, less variability H H M Diversity of income e.g. off-farm income H H M

Infrastructure Access to land, transport, water, communications L H M Investment in or quality of infrastructure L H M Housing stock L H M

Wealth Increased value of assets H H M Ability to invest in enterprise or off-farm M M M

Affordability Housing and major asset affordability L H M Cost of living L H M

Productivity Productivity of natural resources M M M Enterprise productivity H H M Regional productivity L M M

Innovation Development of new economic opportunity L H L Extent of entrepreneurship and innovation M H L

Equity and debt Level of indebtedness and savings L H M Ability to service debt L H M Access to equity L H M

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Relevance

to NRM change

Importance to ESSW

Ease of measurement

Social well-being

Education and skills Gaining more skills – formal and informal H H L Participation in education and learning L M M Opportunities for lifelong learning L H L

Connectedness Personal trust and connection between people M H L Relationships with family, friends and neighbours M H L Networks and interaction in community H H L Increased sense of belonging and community spirit H M-H L Trust and participation in government and CMA programs H M L Awareness and participation in wider NRM issues M M L Hope, aspiration, enthusiasm, passion M H L

Participation Participation in community activities such as volunteering H H M Participation in community groups and organisations H H M New community organisations forming L M M

Safety and security Perceptions of personal safety and security L H L Crime rates L H L Access to services Access to public transport L M M Access to communications L M M Access to education, health care, retail, banking etc L H M Access to social support services L H M

Community facilities Access to community facilities such as parks, recreation opportunities, halls, libraries etc.

L H M

Health Perceived health status L H M Level of personal stress L H M Status of the social determinants of health – chronic illness, obesity

L H M

Mental health – incidence of depression, diagnosed mental illness

L H M

Governance More effective deliberation and decision making on NRM issues H H M More effective organisations and groups related to NRM H H M Community leadership with regard to NRM H H M Community engagement by CMA M M M

Insight Ability to reframe issues L H L Appreciation and acceptance of new ideas and approaches

L H L

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Relevance

to NRM change

Importance to ESSW

Ease of measurement

Social well-being, continued

Other Concern over climate change L L M Clean air, environment (mostly biophysical) M H M Community amenity M H L Water security L H M Spiritual capital L M L Personal worth, self esteem, feeling valued with respect to CMA community engagement

L H L

Recreation opportunities H M M Population size and demographic profile L M H Youth opportunities H L-M M Connection to country, culture and place H M-H L Intergenerational relationships L H L Happiness

L H L

 

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Appendix 2. List of indicators and indices for state of catchments reports 

Theme Index Sub-index Indicator Condition Woody native vegetation extent (intact and

derived) Non-woody native vegetation extent (intact

and derived) Native vegetation type (structurally intact)

Native vegetation condition

Native vegetation

Pressure Land use

Condition Proportion of native vertebrate species remaining

Population change due to management Pressure Introduction of exotic predators

Clearing and disturbance of native vegetation

Changes to fire regimes Changes to water flows Introduction of exotic diseases

Fauna

Over-fishing and fishing by-catch

Condition Proportion of pre-European threatened species distributions

Population change due to management Pressure Introduction of exotic animals and plants

Clearing and disturbance of native vegetation

Changes to fire regimes Changes to water flows Introduction of exotic diseases

Threatened species

Over-fishing and fishing by-catch Pressure Number of new invasive species

Distribution and abundance of emerging invasive species Invasive species

Impact of widespread invasive species at priority sites

Condition Aquatic macroinvertebrates Fish assemblages Hydrologic stress Water temperature trend Salinity trend Turbidity trend In-stream habitat condition

Native riparian and aquatic vegetation extent

Pressure Polluted runoff Livestock grazing Clearing of riparian vegetation Clearing of catchment vegetation De-snagging of in-stream channels

Decline in natural replenishment of in-stream wood

Alien fish species

Riverine ecosystems

Aquatic and riparian weeds

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Alteration of natural flow patterns Alteration of natural temperature patterns Artificial barriers to fish passage Climate change Condition Entitlement vs sustainable yield

Groundwater Pressure Actual use vs sustainable yield

Condition Extent of marine protected areas

Recreational water quality in metropolitan areas

Frequency of algal blooms

Rocky reef species (algae, abalone, lobster) abundance – generally

Rocky reef species (algae, abalone, lobster) abundance – in marine parks

Pressure Urbanisation Tourism Sewage Estuarine output Fishing Disease Wave climate Sea temperature

Marine

Rainfall Condition Wetland extent

Biological condition (birds, fish, invertebrates, pests, vegetation)

Water quality (pH, salinity, turbidity) Soil condition Pressure Sediment Nutrients Flow regime Habitat modification Pest species pH

Wetlands

Salinity Condition Chlorophyll a Water clarity Ephemeral macroalgae Seagrass extent Mangrove extent Saltmarsh extent Estuarine fish assemblages Pressure Land use Population Sediment load Nutrient load Water extraction Hydrology Foreshore structures Aquaculture Training walls

Estuaries and coastal lakes

Entrance artificial opening

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Wild harvest fisheries Condition Sheet and rill erosion Gully erosion Wind erosion Acidity Organic carbon Structure Acid sulfate soils Salinity Pressure Land use

Soil condition

Land management practice Condition Land managed within capability for water

erosion Land managed within capability for wind

erosion Land managed within capability for

structural decline Land managed within capability for

acidification Land managed within capability for organic

carbon decline Land managed within capability for acid

sulfate soils Land managed within capability for

salinity/waterlogging Pressure Land use

Sustainable land use

Land management practice Condition Business profitability and expansion Increased employment Skills formal and informal Community networks and interaction Participation in NRM More effective NRM decision-making Pressure Population change Drought/climate change Market incentives Industry impacts

Economic sustainability & social well-being (socio-economic)

Technology Health Spouse education

Human capital

Operator education Internet access Business partners

Social capital

Member of NRM organisation Vegetation potential Dams on farms

Natural capital

Pasture growth index Livestock Farm structures

Physical capital

Plant and machinery Access to finance Mean cash income

NRM capacity

Adaptive capacity of broadacre agriculture managers

Financial capital

Farm capital value

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Appendix 3. Sample questions on the values of an asset and threats to it 

The questions listed below could be used to focus on the values of an asset and seriousness of the threats to it, in terms of impacts on flows from each form of capital.

Asset Significance4

− What are the causes of the problems with the asset?

− Who or what is being harmed by it and what are these effects?

− If the problems are addressed, will others benefit from it? Who, or what, exactly?

− What are the ecosystem services provided by the asset when it is in good condition? (e.g. does it provide natural resource ‘sink’ and ‘source’? functions? Does it provide habitat or other life support functions?)

− Are any of these ecosystem services provided by the asset an input to income earning activities in the region?

Threats

− What are the threats to the asset? Are there events or problems elsewhere that might overrun or erode this natural capital in any case? What are the potential erosions to the stocks of capital?

− If not addressed, how damaged would the asset be in 20 years?

Feasibility of works

− Can the asset be repaired on a scale that will make a difference?

− How long will this take and is it possible to find measurable goals along the way to repairing the asset?

− What works are necessary to meet each of these goals?

− If on private land, will landholders have sufficient knowledge to implement the works? Will technical specialists be required? From what professions should they be drawn? Are the works and the advice likely to be very costly?

− Is there a private benefit to landholders from undertaking the works and how likely is that they would agree to having the work done?

− Does the project require co-ordinated actions by groups of landholders for the benefits to occur? If so, do these groups have a history of working together and trusting each other? Have they had a say in the design of the projects or the compliance arrangements etc.?

− Does the project require actions or commitments by other institutions?

− (e.g. local or state government, community groups) Is there are good chance these will be forthcoming?

− If undertaken, will the works benefit or harm other projects being undertaken elsewhere?

− Will undertaking the works provide new knowledge or skills (i.e. build human capital)? Will these be of use to others?

− Similarly, will the works build other forms of capital? What kinds, and what will be their ongoing contribution – e.g., over what period will they be used?

4 Some of the questions asked under ‘Asset Significance’, ‘Threats’ and ‘Feasibility of Works’ have been paraphrased from INFFER – the Investment Framework for Environmental Resources – see www.inffer.org.

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Employment, income, inequality and intergenerational equity

− If the problem is not addressed, will there be any immediate or longer run effects on employment or income earned in the catchment?

− If there are some winners and some losers (including any effects outside the region), is there likely to be net gain or loss?

− If the town is dependent upon the services from this asset, roughly what percentage of direct employment is dependent?

− How are the flows of goods and services (well-being) from the asset (capital stock) distributed amongst residents?

− Are there alternative employment opportunities? (This is related to the adaptive capacity of the community: how flexible or mobile between uses is the resource e.g. labour?)

− Can you identify businesses in the region that would be affected – these businesses may provide inputs to, or purchase outputs from, impacted businesses?

− Of those who would be affected, are there many in the lower income groups? Would they have alternative employment opportunities?

− Are people likely to leave the town if the problem is not addressed?

− Is this loss of population likely to trigger any critical government service thresholds, such as provision of teachers, hospital and health services, or police? Are private sector services such as banking likely to be affected?

− Will any community social groupings be affected, e.g. volunteer groups, arts and cultural groups, or other ‘social capital’ networks?

− If the condition of asset declines, will there be any risks to the safety of members of the community? (e.g. from flooding)

− Will there be any risks to the health of the community?

− If the asset is not repaired, are there any sections of the population for whom the loss of the asset has particular cultural significance?

− Does the asset have recreational value or amenity value to members of the community? Does it, for example, contribute to retaining young people in the area?

− How strong are the feelings of the community for wishing to retain the asset in good condition in order that it may be passed on to future generations (bequest value) – or to keep options open in case a significant ecosytem service is discovered (option value)?

Monitoring, evaluation & reporting program

Technical report series

NATIVE VEGETATIONNATIVE FAUNA

THREATENED SPECIESINVASIVE SPECIES

RIVERINE ECOSYSTEMSGROUNDWATERMARINE WATERS

WETLANDSESTUARIES AND COASTAL LAKES

SOIL CONDITIONLAND MANAGED WITHIN CAPABILITY

ECONOMIC SUSTAINABILITY AND SOCIAL WELL-BEINGCAPACITY OF NATURAL RESOURCE MANAGERS

JUNE 2010