The Role of Shared Governance

2) Why is Shared Governance Needed?

The Role of Shared Governance

Achieving Environmental Outcomes on Agriculture Landscapes

(c) 2013 Tim Gieseke All Rights Reserved.

Presented at the 9th Annual Mn Env. Institute - Mn Bar Association April 17, 2013

Foreword

Most new systems seem complex and out of reach. EcoCommerce 101 and the Shared Governance EcoCommerce Platform & Flow Path diagram (last slide summary) may appear to fall in this category.

But like the complex economic system we all engage in today, this system works on the same principle:

You do not need to understand the breadth and depth of economic science to engage in economic activity. The only thing that is required, is that you understand the market signal that you need to generate and/or respond to that meets your interests and objectives.

This presentation is based on research for and the application of EcoCommerce 101

Economy

Ecology

http://www.ecocommerce101.com/media.htm

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Policy

3) What are the enabling tools and technologies?

4) Creating a Shared Governance EcoCommerce Platform

1) What is Shared Governance?

What are the steps/processes needed to capture emerging values?

Land management metrics serve as a basis for an environmental "market signal"

EcoCommerce values include:

• assurance,
• market access,
• liability protection,
• supply chain accountability,
• natural capital management and
• ecosystem service accounting.

New markets instigate transactions, new business relationships, data, intelligence and economic values

Markets are increasing in complexity:

• politically
• economically
• ecologically

Market demands are expanding

• origination
• off-farm impacts
• full product transparency
• industry footprints

Shared Governance:

• functions as an outcome-based process,
• delegates various roles,
• incorporates all stakeholders

Governance relates to decisions that:

• define expectations,
• grant power and
• verify performance

EcoCommerce values are realized by addressing the new set of complexities:

The unique properties of EcoCommerce allows it to be applied broadly or narrowly:

• to "Full Product Transparency" systems or
• an isolated, local watershed improvement project

Policy Stakeholders

New Relationships

Measurements and Market Signals

Increased political complexity

Increase in measurement complexity

Sector Silos are being connected

through data networks and communications

Non-point source ecoservices and pollution are directly immeasurable as it pertains to origin and quantity.

Measurement Scale

...or nation's lower 48.

Whether assessing the farm's 'back 40'...

75

local governments

federal/state agencies

institutions

80

Landscape management complexity

It is a system that can grow independently in various:

• scales,
• regions,
• sectors and
• markets and eventually integrated somewhat seamlessly

The Mathematics of Permutations states:

The number of potential land use patterns is

related to the number of fields within a geo-shed raised to the number of land use options."

Landscape Management

65

A typical scenario:

- of 3 crop choices,

- a handful of conservation practices and

- a 2 or 3 year crop rotation

within a watershed of 1000 fields produces an astronomical number of management scenarios

Shared Governance EcoCommerce benefits stakeholders by improving:

• Landscape data
• Connections to land managers
• Targeting of financial & technical assistance
• Accounting for improvements
• Return on Investment analysis
• Stakeholder engagement long-term
• Connections to agribusiness
• Trust with agriculture producers

These extreme values overwhelm centrally-planned systems,

but are manageable by individuals within an shared governance system

60

Supply web complexity

Agriculture Stakeholders 2013

Agriculture Stakeholder pre-1970s

A farm provides multiple goods and services to multiple entities,

and each entity requires various parameters and scales to define sustainability

watershed

85

• wq index
• soilq index
• P-index
• Adapt-N index

biomass shed

• wq index
• soil q index
• habitat index

cheese shed

Market Supply Webs

• wq index
• soilq index
• habitat index

corporations

non-profits/NGOs

farmer

agronomists

forester

env. liability shed

• wq index
• soilq index

Increasing economical complexity

$0 Cost for natural capital degradation

$0 Value for natural capital appreciation

New information creates new values through transactions and aggregated solutions

Negative Externalities

Positive Externalities

Economic Capital

• soil erosion
• sedimentation
• soil degradation
• biodiversity loss
• increase run-off
• production instability

Numerical values were chosen to represent sustainable ecological and economical management outcomes

• carbon sequestration
• soil fertility
• water storage
• water filteration
• biodiversity
• production stability
• habitat

• grain
• biomass
• forage
• water

$ Potential Profit

Solutions From the Land, 2013

The following steps provide the outline to create a Shared Governance EcoCommerce Platform and the benefits it provides

Farmscape Intelligence

The Four Aspects of Governance

Ecosystem service outputs are generated in unison with traditional production outputs

3) Identify the natural resource values that the project is seeking or producing

1) Identify Stakeholders or partner with an established project(s)

water quality - 85 index

habitat - 73 index

soil health - 82 index

forage - 6 tons/acre

grains - 156 bushels/acre

meat - 350 pounds/acre

There are hundreds, if not thousands in progress today

creates

Landscape management complexity

Index Hopper

Increase in measurement complexity

4) Compile representative land management metrics that represent those values

This a collaborative and constructive component where organizations can express their values and define what types of activities and conditions define sustainability

Soil

Conditioning

Index

Pheasant

Index

The Mathematics of Permutations states:

The number of potential land use patterns is

related to the number of fields within a geo-shed raised to the number of land use options."

Duck

Nesting

Index

Non-point source ecoservices and pollution are directly immeasurable as it pertains to origin and quantity.

2) Evaluate the type of Governance Structure that the group has or will form using the Shared Governance Compass

N-P

Nutrient

Indices

Habitat

Suitability

Index

or a non-contiguous land area

Landscape/Geo-shed Intelligence

What sectors are the stakeholders in and what roles and responsibilities do they have?

...or nation's lower 48.

Whether assessing the farm's 'back 40'...

Water

Quality

Index

CARBON

Index

Many farmscapes make up a watershed

Pollinator

Index

Many farmscapes make up a milk-shed, etc.

5) Choose the list of metrics

6) Assign values to those metrics

The Four Sectors of Governance

A typical scenario:

- of 3 crop choices,

- a handful of conservation practices and

- a 2 or 3 year crop rotation

within a watershed of 1000 fields produces an astronomical number of management scenarios

These extreme values overwhelm centrally-planned systems,

but are manageable by individuals within an shared governance system

• Market Access
• Reduced Liability
• Program Participation
• Reduced Tax
• Monetary
• Credit Market
• Regulatory Assurance

Note: Many strive for the "perfect" metric and score - while it is a very important aspect, it is the economic relationships around the metric that achieves it

Public Policy-makers

Public Practitioners

Legislators

State Gov

Conservation

Agencies

7) Support and allow "market" to materialize

Essentially, a "market signal" has been created - Unit & Price

With Unit & Price/Value, one does not need central control for people to figure out what to do - entrepreneurs and innovators will

Corporations

Land Managers

Private Policy-makers

Private Practitioners

Supply web complexity

Note: One or several regional centralized entities (business, NGO, government) needs to accept data from those who create the units and disseminate to those who value them.

Re-evaluate Land Management/Product Strategies and Standards

Several AgEQA projects were completed from 2006-2014. This diagram illustrates how new relationships created data and how value flows did and could move from farm to end-users

Increasing economical complexity

Shared Governance Compass

A farm supplies multiple goods and ecoservices to multiple entities from the same plot of land,

and each entity demands specific parameters of various quantities to meet their sustainability definition.

The potential number of accounting scenarios is immense.

externalities are symptoms of a failing economic system

Each entity can define a level of sustainability independent of others

watershed

$0 Cost for natural capital degradation

$0 Value for natural capital appreciation

Symbiotic Demand

Provides the context and an evaluation of the extent that shared governance is applied

• wq index
• soilq index
• P-index
• Adapt-N index

biomass shed

A Shared Governance Compass can illustrate which sectors are providing what degree of governance

Geo-shed Monitoring

• wq index
• soil q index
• habitat index

Shared Governance EcoCommerce Platform and Flow Path

Negative Externalities

allows integration of landscape assessment

and environmental and/or product outcomes

cheese shed

AgEQA -

Environmental Quantified Assets

Positive Externalities

• wq index
• soilq index
• habitat index

Legislators

Boards

Public Practitioners - 20%

• soil erosion
• sedimentation
• soil degradation
• biodiversity loss
• increase run-off
• production instability

Public Policy-makers - 70%

(EcoCommerce Market Signals)

• carbon sequestration
• soil fertility
• water storage
• water filteration
• biodiversity
• production stability
• habitat

land management metrics calculated by...

Public & Private Policy-makers

Local, State &/or Federal

Governing Unit

Sustainability Rep

NGOs

USDA NRCS/FSA

Conservation Agencies

Local Governments/SWCD

Regulatory Agencies

Industry

Corporations

Retailers

Corporations

TMDL Planner

County Water Plan

Watershed District

Well-head Protection Orgs

Sustainability Supply Webs

State Agencies

Private Practitioners

• grain
• biomass
• forage
• water

Symbiotic Demand works on the premise that many demanders can partake in the costs and values of public goods

Audit %

Federal Agencies

AgEQA Technician

Ag Producer

Agronomist

USDA Farm Bill

AgEQA Scores compiled by HUC-8 Watershed or geo-shed

Local Gov Units

SWCD

env. liability shed

Symbiotic Demand

Private Policy-makers - 6%

Public & Private Policy-makers

Private Practitioners - 4%

• wq index
• soilq index

$ Potential Profit

supporting programs

sustainability standards

on-the-ground assistance

Verification

sustainability baseline

Annual Confirmation

Private Practitioners

Ag Producer

Integrate and Differentiate geo-based data

AgEQA Technician

AgEQA Technican

SWCDs/NRCS

contractors

Ag Producer

agronomists

Ag Producer

AgEQA Technician

NGOs

non-exclusive market values

Creates Watershed or other Geo-based Market Intelligence

A shift in governance from public policy-maker to private policy-maker & practitioner engages the stakeholders with access to critical information, abilities and values

citizen groups

food processors

utilities

sustainability supply webs

environmental liability insurers

bio-energy refineries

Public & Private Practitioners

exclusive market values

ecoservice

credit markets

A Shared Governance structure capitalizes on networks and data management to develop new economic relationships that reduce transaction costs and allows age-old economic forces to address 21st century ecological needs.

When interdependent collaboration reduces transaction costs to the lowest level, markets are able to bring externalized values into the economy

New layers of complexity are created when governments, corporations, markets and citizens seek new values

As practitioners gain access to cheap tools of innovation, communications, networks, media and data - a shift to a broader governance model is naturally occurring

tgieseke@agresourcestrategies.com