Market-based instruments to achieve sustainable land management goals relating to agricultural salinity issues in Australia

There is a developing interest in Australia in the use of incentive-based policies to deal with natural resource management issues such as salinity. This compares to the previous focus on regulatory controls, suasion and in some cases, direct subsidies, to address these issues. In contrast, incentive-based mechanisms have the potential to provide greater encouragement for land managers and individual resource users to take up practices that may lead to greater individual and collective benefits. Incentive mechanisms work by using market-like processes to automatically transfer information about benefits of alternative courses of actions between participants. Key advantages of using market-like mechanisms, compared to the traditional regulatory measures, are that the desired outcomes could be met at lower costs because participants have the flexibility to vary their involvement to suit their individual circumstances. There are a range of different incentive mechanisms that could potentially be used to address salinity issues in agricultural regions. In this article, the potential role of market-based instruments in addressing agricultural salinity is reviewed.