Centre for Environmental Economics and Policy

Why treat localised and dispersed assets differently?

The payoff from successfully investing in well chosen localised assets is likely to be high. This means that it may be feasible to use relatively expensive approaches, such as engineering works, or high levels of incentive payments, to protect those assets. The assets selected for funding would be particularly valuable, facing high environmental threat, with high feasibility of protection, and high adoptability of the relevant works needed to protect them.

To compete with investment in localised assets, investment in dispersed assets needs to be relatively low-cost per hectare, and highly effective over large areas. Appropriate responses may include technology development (developing new land-use options that are sustainable and highly adoptable), extension (where such land-use options exist but have not yet been adopted), and conservation tenders (which may reveal highly cost-effective interventions).

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Weighing up localised and dispersed investment

The different asset types have different strengths and weaknesses (see Table 1 and the Appendix). The optimal balance of investment will vary by region, depending on factors such as:

• the number of threatened iconic assets needing investment in the region;
• the degree and urgency of the threats to iconic assets
• the feasibility of averting those threats;
• the feasibility of the potential actions for dispersed assets.

Environmental managers need to make an explicit decision about the balance of effort between localised and dispersed assets, and the appropriate tools to use. See Table 2 for some examples that illustrate the way that the balance of investment might change for different types of regions. The breakdown for different tools would depend on the local situation. For example, there would be a greater emphasis on technology development where:

• there is a lack of existing sustainable technologies that are attractive to landholders;
• there are good opportunities for development of improved technologies that are attractive to landholders;
• landholders are commercially motivated, rather than lifestyle oriented.

There can be synergies between the two categories. Targeted investment in localised assets does provide some benefits in the form of protection of farmland that is close to the targeted assets. Conversely, the tools suggested for dispersed assets can assist with localised assets as well. For example, technology development can benefit localised assets by reducing the cost of land-use change close to those assets, or by increasing the adoptability of practices.

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