Understanding Climate Risk

Science, policy and decision-making

What is public good research?

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When recently asked at a meeting with CSIRO scientists what he thought public good research was, their CEO Larry Marshall said:

“Anything that’s good for the public”

He then went on to say:

“Government policy, frankly, determines public good. That’s their decision. When they fund renewable energy, environmental science, education, health care, that’s a fundamental policy choice. It’s completely separate to us. National objectives, national challenges, is that not, a realistic measure of public good?”

From the floor: No … (over-ridden)

Marshall: “(interrupting) The danger of us deciding what is public good for ourselves, the risk is that we’re biased, if I poll the organisation, and I did, that each group fundamentally believes that what they do is public good, in a truest, purest sense of the word.”

This of course is wrong, but as an echo chamber for the Abbott/Turnbull Government, Marshall is doing his job perfectly. Just as when George Brandis was Minister for the Arts and treated it as his personal funding fiefdom, so too, CSIRO is being made a domestique of government science policy. Science Minister Pyne may insist that CSIRO is independent of the government but when his appointee makes it his duty to heed his master’s voice, that protestation leaves a hollow echo.

There are three things in these statements that Marshall tacitly admits:

  1. That in their “deep dive” CSIRO did not have a process that took the nature or quality of the science into account (not so deep, then),
  2. As the head of a research organisation of global significance, he has no idea what public good research is, and
  3. He regards publicly-funded science as subordinate to policy, and the government as CSIRO’s major customer (the customer is always right), so if government chooses to prioritise some scientific goals as policy and downgrade others, CSIRO should deliver (which completely disregards CSIRO’s charter and makes CSIRO a political football).

So what is the current role of public good research in Australia? This question needs to be answered in two parts. The first is what is the role of public research and the second is how does that reflect on current policies and arrangements? The first question will be addressed here, the second in another post.

Investment in public good research delivers three main outcomes:

  1. Knowledge contributing to the general public good,
  2. Applied knowledge that serves as an economic public good,
  3. Ensuring that 1 and 2 are accessible to the public, either carried out by the research groups themselves or through boundary organisations.

Knowledge contributing to the general public good

Basic research and the knowledge it yields has long been recognised as a public good. If we go back to Adam Smith and Wealth of Nations (1776):

Public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual or small number of individuals, and for which it cannot be expected that an individual or small number of individuals should erect or maintain.

A body of knowledge has always underpinned human society. It has always been a public good and highly valued – when it loses that value, that society collapses. In hunter-gatherer and agrarian societies, peoples’ livelihoods depend on public knowledge that includes basic knowledge and the technologies developed from that. There is no evidence, despite how ‘modern’ we may have become, the pathway between knowledge and application, and utility, is any different to what it was originally – it’s just more complex and involved.

Knowledge produced by basic research goes into applied commercial research and applied public good research, which includes the generation of social technologies.

So where does Australia sit on the spectrum between the generation of basic public good research and its application?

Australia does pretty well on knowledge production per capita, both in science and in creative endeavours. Most of the science production is funded by government with less so by industry. In the Global Innovation Index 2015, Australia is 26th for knowledge and technology creation, but 6th in scientific publication and 9th in H-index citable documents. Where it slips is patent applications (34th), patent treaty applications (25th) and utility model applications (25th, utility models are short-term patents). In terms of innovation linkages, Australia is 38th. This includes university-industry research linkages, business cluster development, percentage of R&D financed by overseas business, joint ventures and patent families. This is an area that needs addressing and is the focus of the government’s National Innovation and Science Agenda, currently in caretaker mode.

A really interesting statistic, is that percent of R&D financed by business is 7th and performed by business is 16th globally. That means business is financing a reasonable amount of R&D in universities, the CSIRO and other research institutes. This will include R&D corporation-funded research, which boosts agricultural productivity that will not show up in the patent and IP licencing data. This indicates that business is perhaps not commercialising their research particularly well.

To put the cuts at CSIRO into perspective, the following diagram shows CSIRO’s global research rankings for 15 disciplinary areas. Then see this list of proposed losses to functional areas as of May 16:

  • Oceans & Atmosphere 74
  • Land & Water 67
  • Agriculture 25
  • Food & Nutrition 21
  • Minerals 33

CSIRO-publication-rankings

See how well the proposed job losses line up with CSIRO’s areas of greatest excellence. You couldn’t design it better, really, if the plan was to deliberately reduce Australia’s capacity in high-quality public good R&D. Former Chief Scientist Penny Sackett has likened the loss of underpinning science to “putting on blindfolds before embarking on a long journey over rough and unfamiliar terrain”.

Applied knowledge that serves as an economic public good

Much of the research produced by these areas of excellence (though not all), qualifies as an economic public good. That is, it contributes to the broader economy, the one that goes well beyond and is much larger than GDP, which provides long-term social and environmental returns in addition to monetary returns.

Public good research is:

  • Non-rivalrous/non-excludable – it can be used by anybody
  • Non-depletable – its use by one person does not jeopardise its use by another
  • Dominated by intangible or ‘intrinsic’ value
  • Often takes the form of social technologies; i.e., it cannot easily be commodified.

Examples are:

  • The climate change projections produced periodically by CSIRO (now with the BoM). Since their fist substantial release in 1996 to those released last year, Australians have become amongst the most climate literate people in the world, which is just as well when they are dealing with one of the most variable climates.
  • Fundamental knowledge of how the Southern Ocean influences climate.
  • Global sea level records and explanations as to why they vary the way they do.
  • The oversight of global carbon budgets through the Global Carbon Project.
  • The attribution of regional climate change (e.g., SE Australia and SW WA).
  • Land and water futures used in catchment management and in strategic water supply planning and management. They have contributed to overcoming the over-allocation in the Murray Darling Basin and other catchments at the same as substantial reductions in rainfall have been experienced. The job is not done, but we are better off than comparable regions overseas.
  • Maintaining agricultural productivity in a changing climate.
  • Climate change and adaptation in the western Pacific, contributing to our near neighbours.

I could keep going, but you get the picture.

The problem with this type of research is that because it cannot easily be commodified; it is difficult to turn into products that generate ongoing income streams. This has been a well-recognised issue in CSIRO for a long time. A more regular income stream from investments (as was the case for wi-fi) has been part of CSIRO’s strategy for the past couple of decades. Ironically, they do need to achieve some of Marshall’s aims, just not in the way he thinks it should be done.

There is an increasingly strongly-held opinion in government that the solution to the lack of commercial application is to change the balance between public good and commercially-generating research, because a) if research isn’t generating a commercial return it can’t be any good, and b) if funds are limited, R&D producing a commercial return should be prioritised over other forms of research.

This captures pretty much the view in the Miles review of the Cooperative Research Centre program. This recommended that applicants be required to submit a business proposal that included:

  • clear, tangible, industry-focused objectives;
  • a statement of research commercialisation potential;
  • an explanation of how the CRC research outcomes will lead to economic growth (including intellectual property outputs such as patents); and
  • a plan for active involvement by industry in the proposed management, governance and administration of the CRC.

This view is dominating current government policy, with public good research being cut from numerous areas of Australian Government R&D funding as per the following diagram. The CEO of CSIRO, Larry Marshall, seems to share this view.

National-R&D-with-cuts

The problem with this stance is, if we picture R&D as walking on two legs – one public good, the other commercial – if one leg is a bit gammy, there is no point in cutting off the other one to make the gammy leg work better.

Public good contributions to policy and planning

Scientific research, including applied science, is not necessarily immediately accessible to those who could benefit, so needs further investment to make sure those benefits are realised. This can be undertaken by research organisations themselves by integrating it into their research, which is costly but effective (especially because of the added learning gained by closing the R&D loop through to implementation and back again), or by undertaking outreach activities. It can also be undertaken by boundary organisations whose main role is to tailor public good knowledge and information for a particular client base.

This role is also undertaken by science-policy networks. They exist between research groups and policy makers and serve as one of the main routes from research into policy. There is no doubt that the climate-policy network is very powerful and has a substantial public component. So when around 120 jobs from Climate and Atmosphere were proposed to be cut, the resulting backlash was fierce. Larry Marshall told the ABC:

“I feel like the early climate scientists in the ’70s fighting against the oil lobby,” he said.

“I guess I had the realisation that the climate lobby is perhaps more powerful than the energy lobby was back in the ’70s – and the politics of climate I think there’s a lot of emotion in this debate.

“In fact it almost sounds more like religion than science to me.

The fact that part of that backlash involved unprecedented levels of concern from peak science bodies should have turned on the lights, but Marshall was unmoved.

“For that to happen, someone’s going to have to convince me that measuring and modelling is far more important than mitigation – and at this point you know, none of my leadership believe that.”

Australia has mature science-policy networks in the areas in climate, water, ecology and environment, agriculture and, dare I say it, minerals – all areas within CSIRO facing research cuts. That doesn’t mean that those networks get everything they want, but it does mean that the relationships between policy and research are fairly mature, even if the political pathway itself is not smooth.

Some in the current government maintain that these networks are too strong and their power needs to be curtailed. This is certainly a driver for the breadth of the funding cuts detailed above. Paddy Manning on the ABC’s Background Briefing recently reported on the government’s hidden agenda to do just this.

Where to next for public good research?

More than ever before, we see the need to be able to quantify the benefits of public good research. In doing some research for this post, it was clear that very little has been done at the level of the Australian National Audit Office or the Productivity Commission. In fact, when the ANAO investigated CSIRO’s Flagship Program almost a decade ago, they took the public good aspect in good faith while commenting on the difficulty of measuring outputs. Their main recommendations were on probity and governance. Nicholas Gruen recently recommended an Evaluator-General for creating evidence-based policy, but the concept is reasonable for addressing public good generally.

The Land and Water Research Development Corporation, shortly before it was shut down, in 2010 conducted the third in a series of valuations of their research, estimating the return on investment for the previous 20 years at 26% at a five for one return on each dollar invested.

In 2008, the Rural D&Cs estimated the following prospective returns:

  • A sample of 36 highly successful projects will return $10.5 billion in quantified benefits.
  • Of the $10.5 billion in quantified benefits, $5.5 billion will be private benefits (that is, benefits accruing to rural industries). The remaining $5.0 billion will be benefits captured by consumers, other participants in the supply chain and the wider public.
  • A sample of 32 randomly selected projects from the RDC portfolio will deliver an average return of $11 for each dollar invested (in 2007 dollars).
  • A range of significant social and environmental benefits were identified which are distributed broadly to the Australian community.

These returns are all based on applied research projects but themselves are underpinned by basic public good science. Without further fundamental developments in our understanding of natural systems and how they respond within a social-ecological context and how people make decisions concerning them, the returns from applied public good research will decline as its effectiveness is reduced.

The fact that these linkages need to be emphasised to CSIRO’s leadership team, in that addressing issues like climate change is not an either/or situation, is an indictment on their ability to lead Australia’s premier research organisation.

 

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