WHAT

Executive Summary Purpose To inform the early design of the Environmental Markets Leadership Program (EMLP) and broader public policy and practice, BWA has produced this initial scoping report. This ‘snapshot’ review of current knowledge guides more in-depth subsequent qualitative and quantitative research in 2022- 2023, in support of EMLP’s research, monitoring and evaluation framework and activities. Approach The current report investigates the barriers and facilitators faced by NSW Farmers and Land Holders to participating in, and co-creating, Environmental Markets (EM), via scoping literature review and subject matter expert interviews. Results Our research suggests that participating in EMs is generally understood in practice to include the core elements of identifying, measuring and managing to increase environmental goods and services (EGS) generated on the land, and exchanging financial value attributable to that measurable increase. For most of our SME interviewees, this means selling resulting credits as an asset to a purchaser (corporate, philanthropic, government). Most discussion was about Australian Carbon markets (Emissions Reduction Fund, ERF), followed by Biodiversity Offset Markets (primarily NSW, QLD, Victorian), and water markets were also mentioned, along with a diversity of novel, 1:1 and combined or ‘stacked’ exchanges of multiple environmental services (e.g. carbon + biodiversity). The EMLP recognizes a wide range of value exchanges, and so did some participants. Indeed, farmers are increasingly weighing up selling ‘credits’ against other uses and applications of well-defined and validated environmental credentials of farm products and performance. Beyond a simple transaction, EM is commonly framed as validating and supporting good land management practices, which are valued off-farm in multiple ways, by multiple actors. EMs are a rapidly developing space, with inherent scientific, policy, economic and social complexity, in even long-established markets. Far from farmers simply deciding to ‘opt-in’ or ‘opt-out’, they are active participants in shaping them. Accordingly, farmers engage in a variety of ‘market shaping’, ‘market preparation’, ‘market entry’ and sustainable land management practices. The complex, dynamic situation has created a clear gap for farmer centric, holistic information and decision-making support on their involvement in EMs. Our recommendations reflect barriers and facilitators faced by farmers that were prominent in both the literature, and in practice interviews. They are relevant to EMLP and parallel efforts. A longer list of each can be found in the main report. Recommendations Our key recommendations include increasing participants experience of facilitators including: • Providing information and advice aimed at making the complicated and dense world of EMs clearer and decision relevant for farmers, including being able to ask critical, relevant questions of intermediaries and brokers, and making decisions in uncertainty • Implement a learning model of peer to peer, interactive and demonstrative / case based learning, helping both those leading the way to go further, and those a step or two behind to learn from others experience • ensure participants learn about how to create and manage environmental data about their farm, and how to make good decisions about how to use it, including but not limited to EMs BARRIERS AND FACILITATORS OF FARMERS PARICIPATION IN ENVIRONMENTAL MARKETS 5 Mitigating the barriers experienced would also help. The root causes of these are out of the direct control of the program and participants, but could be the focus of system level reform, and learning and communication could focus on adapting to them in the meantime. Barriers and associated responses might include: • complexity, difficulty and expert dependency – I.e. ‘everyone says its complex, but it doesn't have to be’: we will provide simple information on what EMs involve, how you can get started and what is good to know before hand • high upfront costs, and uncertain returns – i.e. you will learn/develop strategies to manage and reduce upfront and ongoing costs of participating in markets (e.g. share experts, collectives, work in regions etc) • high opportunity costs – i.e. you will learn /develop strategies to keep options open and reduce opportunity costs of participating, how to negotiate flexible and meaningful agreements, to assess if its worth more to keep your credits to demonstrate performance or sell them to a corporate (a recurring trade-off mentioned in interviews in particular). It is possible that articulating and supporting a series of different ‘narratives of change’ might help farmers experiencing different combinations of barriers and facilitators to overcome them. A speculative section of the report sketches potential narratives: “Broke to regrowth” “Born to it” “Pragmatic Cockie” and “Transformational green farmer”. Limitations Insights are derived from 8 (of 77 assessed) included published texts, and 3 (of 29) grey literature sources. Practice interviews were conducted with 7 subject matter experts across industry, government and research organisations. Note that more extensive literature review methods, and larger and more diverse interview samples, would almost certainly identify and prioritise somewhat different barriers and facilitators. The results reported here are indicative of the state of knowledge without being a conclusive summary of it. We do believe they are sufficient to provide evidence informed advice for subsequent experimentation and learning in a well designed and evaluated program, as is the intent of EMLP. Following qualitative and quantitative research will also help identify the most salient and important barriers and facilitators for likely program participants, and the program M&E will assess the extent to which the program supports desired behavior changes and broader transformations.