Identifying scale and scope issues in establishing conservation tenders

The aim of this report is to provide some theoretical and policy context to the issues involved in setting the scope of conservation auctions, and to outline the methodological steps that will be used to test those issues in a project setting. There is growing interest in Australia in the use of market based instruments (MBIs) to achieve environmental outcomes (Grafton 2005). Conservation auctions, such as the BushTender program described by Stoneham et al. (2003) are a price-based MBI that can be used to allocate public funds. These mechanisms are being trialled in Australia, but a number of questions remain about the most efficient ways to structure their design and application. This research project is funded under the second round of funding for the National Market Based Instrument program to address some of those issues.