Utilising taxation incentives to promote private sector funded conservation

Abstract

An individual's behaviour cannot be fully explained by their reaction to financial inducements and self-interest. Much of the public discussion of natural resource management centres on the assertion that landholders should be motivated by ideals of sustainability and good environmental outcomes to sacrifice their individual interests in order to protect the collective interests of society. At the other end of the spectrum, many institutional designers take the view that they cannot rely on the virtue of landholders but instead must rely on regulations and market incentives which appeal entirely to the self-interest of landholders. Perhaps a better view is that individuals may be subject to self-interest but they are not bereft of other motivations or concerns such as community interest. Suitable incentives coupled with the goodwill of landholders, are the key ingredients to the promotion of conservation. The problem lies in finding sufficient funds to meet the ever expanding requirements of environmental conservation. The economic and environmental pressures facing Australia suggest that the underlying funding capacity of Australian governments and landholders to meet conservation activities will rapidly decline. This dissertation explores the following intertwined research issues: 1. Contrary to economic conventions, is there a justification for a taxation based approach to economic incentives to encourage private rural conservation, from a policy and behavioural perspective? 2. Is there a policy rationale for an alternative to the existing approaches to funding rural natural resource conservation and restoration activities on private farmland? 3. To what extent is there a behavioural rationale for a tax-leveraged privately funded approach to rural natural resource governance? 4. Is there a basis for the hypothesis that there is an important behavioural difference between government grants, taxation incentives and a farmer-led taxation leveraged approach to rural natural resource governance? The caveat in addressing these issues is that this dissertation is an initial investigation of the key ingredients for promoting conservation works. As such, it is beyond the scope of this dissertation to provide conclusive evidence in relation to these issues. This is in part because of the limitation of resources and in part because of the paucity of knowledge and empirical data on these issues. The research approach adopted in this dissertation is similar to an applied public policy research approach, which requires input from various disciplines, including law, economics and other social sciences, to fully appreciate the relevant social problem and to explore the research issues. The issues canvassed in this dissertation involve economic principles, finance principles, budgetary restraints, socio-economic forecasts, resource management concerns, behavioural responses, and policy issues. Thus, the dissertation moves beyond a doctrinal research and legal formalism approach. The dissertation adopts a pragmatism worldview which values both objective and subjective knowledge. This dissertation uses a doctrinal and purposeful enquiry method to explore the large policy and taxation issues. Fiscal analysis is used to assess the funding capacity of Australian governments. For gathering the empirical evidence component, this dissertation adopts a mixed methods research approach, using both qualitative and quantitative methods within the same study. One of the advantages of a mixed methods approach is the potential for gaining a deeper and more complete understanding of the research issues by uniting both a qualitative and a quantitative stance.

Date of Award	2015
Original language	English