11.4 - Recommended reforms for monitoring and evaluation of the Australian environmental management system

Currently, assessing the environmental performance of the EPBC Act and the relative effectiveness of the management activities at different levels of government is extremely difficult. Understanding the outcomes from the different ‘levers’ used by governments to manage the environment is relevant to Reviews such as this one, which present the opportunity to reset the regulatory system more fundamentally.

The Commonwealth has a clear leadership role because the broader framework benefits from national consistency and alignment with its international reporting obligations. A more consistent approach to various national-level reporting efforts that draws on an authoritative, ongoing information base (Chapter 10) could significantly improve the quality of reporting and how environmental management activities are communicated.

A broader monitoring and evaluation framework, developed in collaboration with jurisdictions, is needed to better understand the performance of the different parts of the national environmental management system. The monitoring and evaluation framework for the EPBC Act should be nested within this broader framework. This framework would establish long-term environmental indicators that don’t change as priorities change and enable streamlined whole-of-environment reporting. This would better support consistent, repeatable analysis of trends and a greater ability to attribute outcomes to individual management levers or external drivers.

The oversight of the ESD Committee and the environmental information supply chain Custodian to improve reporting on the performance of the EPBC Act will provide a springboard for greater collaboration and alignment in broader national reporting, underpinned by the national environmental information supply chain. In this way, the EPBC Act reforms will provide the foundation to better align monitoring and evaluation across the national environmental management system.

An identical, mirrored approach to environmental reporting between the different jurisdictions would simplify national-level reporting. However, in most cases this would fail to account for natural regional variation and potentially require complex legislative and cultural change. Instead, a transparent and repeatable method to organise, translate and synthesise different national and jurisdictional reporting approaches to align with a given agreed outcome could deliver improvements, rather than ‘reinventing the wheel’. A consistent reporting framework across the Commonwealth and jurisdictions would reduce duplicated reporting effort and deliver savings across governments and stakeholders, supporting a ‘report once, use many times’ approach.

11.4.2 - A revamp of national State of the Environment reporting

A revamp of national SoE reporting is required to provide the foundation for Commonwealth leadership on the environment and a springboard for the development of a broader monitoring and evaluation framework. The SoE should be the vehicle through which Australia, as a nation, tells a consistent and clear story on the environment and how it is changing over time, both to itself and to the world.

The national SoE report should continue to be independently prepared, so that judgements are made at arm’s length and without fear or favour. This independence should be hard-wired into the EPBC Act.

The report should provide an expert synthesis and assessment of the national environment, which builds on agreed national indicators that stand the test of time. These indicators should include those that support an annual evaluation of the EPBC Act National Environmental Standards for MNES, complement the environmental-economic accounts and, as much as possible, be consistent with international reporting requirements.

As discussed in Chapter 3, government should consider the benefits of separating the delivery and governance of the SoE report, along with other national and international reporting, from the operation and governance of the EPBC Act to reduce complexity and reflect the broader scope of the report beyond biodiversity protection and conservation. For example, New Zealand establishes its environmental reporting requirements in a separate piece of legislation, the Environmental Reporting Act 2015.

Pending more significant legislative change, the SoE report should be structured around a nationally agreed evaluation framework, which the data and information collected by many can support. This framework will provide focus and consistency to the reports, while being sufficiently flexible so as not to limit the ability of the report to consider information in new ways or address emerging issues.

The national SoE report should examine the state and trends of Australia’s environment and the underlying drivers of these trends, including interventions that have been made and current and emerging pressures. It should provide an outlook for Australia’s environment, based on future scenarios.

The SoE will continue to draw on multiple ‘lines of evidence’ in response to the scope and complexity of the task, but the report should base its approach around the agreed system of national environmental-economic accounts. Once the environmental-economic accounting framework is more mature, the SoE report could also provide an independent assessment of how the environment has been valued in decisions over the previous reporting period, considering any trade-offs made by governments between the environment and economic productivity.

The Commonwealth should be required to formally respond to the national SoE report to identify and address inadequacies and priorities for intervention. This response should be tabled in the Australian Parliament. The Commonwealth should respond in the form of a national plan for the environment, which identifies priority areas for action and the levers that will be used to act. The plan would provide a consolidated, strategic view of how the Commonwealth is holistically delivering environmental management and restoration. The Commonwealth should report on its implementation of the plan annually.

This revamp of the national SoE report requires an ongoing commitment to resourcing and maintaining capacity for national-scale monitoring. Ideally, national SoE reports should be published on a cycle that enables comprehensive input into strategic planning and the statutory reviews of the operation of the EPBC Act. This will support adaptive management – the system should not be ‘set and forget’.

The EPBC Act should be amended to set the formal objectives for the national SoE report, ensure its independence, require the Commonwealth to respond and to better align the timing of the report so that it provides contemporary input on environmental outcomes for consideration in the decadal statutory review.

The next State of the Environment report is due to be delivered in 2021. The Commonwealth should provide a formal response to the 2021 report, even if it is not yet a statutory requirement. The 2021 SoE report should also begin embedding and integrating environmental-economic accounting.

11.4.3 - Accelerated effort on national environmental-economic accounts

Environmental-economic accounting (EEA) provides a mechanism to underpin consistent ESD reporting across governments (Box 40). The collaborative development of a nationally consistent system will support greater coordination and the capacity to better tell a national-level story.

Efforts to finalise the development of these accounts need to be accelerated so that they can be integrated into public policy.

Continued development of the methodology and maturity of national ecosystem accounts could provide a strong framework to underpin EPBC Act monitoring and reporting. Internationally, approaches are being explored for constructing ‘species accounts’ and transforming the data they contain into summary statistics that reflect species diversity and are tailored to specific end uses (King et al. 2016).

More effort is required to break down silos and embed the slowly maturing EEA into the implementation of the EPBC Act. EEA can support the implementation of the EPBC Act and the Review’s recommended reforms in several ways. They can provide:

• the foundation for State of Environment reporting, as discussed in section 11.4.2, and the monitoring and evaluation framework for the EPBC Act
  • development of ecosystem accounting methodologies should be closely linked to the establishment of the National Environmental Information Assets to inform evaluation of performance against the National Environmental Standards for MNES
• a consistent structure and approach for estimating the change in value of a natural asset (such as a wetland) from the degradation that may occur as the result of an action
• a structured way to assess future changes in the value of environmental assets, aligned with the predictive modelling capability discussed in Chapter 10
• a consistent approach to support the ESD Committee’s advice to the Minister, considering all factors of ESD (as discussed in Chapter 4)
  • the ESD Committee may also have a role in providing guidance to decision-makers and proponents on the consistent application of discount rates and time horizons for economic analysis to reflect sustainable development and intergenerational concepts.
• clear metrics of natural capital to support investment in restoration (Chapter 8).

The development of EEAs has lacked a clear national-level policy demand. The multiple areas of this reform package that benefit from a system of EEAs will provide the demand to accelerate their development and application.

As part of the reporting framework for the Act, the Minister should aim to table a set of national EEAs alongside traditional budget reporting. The accounts would include ecosystem accounts and an economic value assigned to environmental services. This would give the accounts more visibility and assist in making more mainstream the consideration of the impact of our actions on our environmental assets with a focus on MNES and the services that they provide.

An initial set of national EEAs, including land, ecosystem and species accounts, should be tabled with the 2021–22 Budget.

This requirement could replace the poorly implemented annual reporting requirement on ESD for Commonwealth agencies, increase accountability and provide further impetus for accelerated development, use and ongoing improvement.