A Natural Investment Project
5 Framework for Assessing the Regional Economic Impact of Large-Scale Habitat Restoration
from suppliers located outside the study LGAs. In doing so, a broad indicator of the possible flow-on benefits related to expenditures from agriculture and restoration activities is provided.
5.1.1
Stage 1 Model Inputs and Assumptions
In order to operate the model developed to derive estimates of the per hectare impact of land use change on expenditures, revenue and employment, there was a need to make a number of assumptions. As noted above, a key assumption was that the cost of restoration would be the same in each zone and that the per hectare cost of restoration for the three select sites in Zone 2 (Nurcong, MECU and the French Property) would also apply throughout the study area. Other key assumptions made were: • the share of off-farm purchases of goods and services made in the same local government area was assumed to be 75 per cent for both current agriculture and restoration cases in each zone except for labour; • the predominant agricultural enterprise in Zone 1 is fat lamb production area; • the predominant agricultural enterprise in Zone 2 is mixed grazing and cropping • the predominant agricultural enterprise in Zone 3 is cropping; • the value of a farmer’s own labour was equal to that of a plant operator; and • the number of jobs per $1m expenditure for each of the industry groups which supplied goods and services to farms was equal to the Victorian average as of June 2009.
5.2
Stage 2: Estimating the Impact of Large-scale Habitat Restoration on Regional Employment and Income
Stage 2 involved the development of a model to allow for a gradual roll out of the restoration projects over a period of 30 years and to provide for an analysis of the benefits over this period in discounted flow terms. The same roll-out period was used for each of the Zones 1, 2 and 3. A detailed potential roll-out schedule for the implementation of restoration was provided by Greening Australia, with the same schedule applying to each of the three Habitat 141 zones. The roll-out schedule is shown in Table 5-2. It includes six, five year periods, with less restoration scheduled for the first and last five year periods than during the middle four periods. The total area to be restored was also split into types of restoration activity in terms of the primary purpose or restoration outcomes. As defined in Section 2.2.2, these outcomes were: 1. Carbon storage. 2. Biodiversity. 3. Landcare The total area to be restored for each of these restoration outcomes for each of the three zones is presented in Table 5-3 for Scenario 1: Greening Australia Targets. For this scenario, a total of area of 254,650 hectares would be subject to land use change from agricultural production to native vegetation for the three zones over the 30 year period.
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