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The cost of policy simplification in conservation incentive programs

Authors

  • Paul R. Armsworth,

    Corresponding author
    1. Department of Ecology and Evolutionary Biology, University of Tennessee, Knoxville, TN 37996, USA
    2. Biodiversity and Macroecology Group, Department of Animal and Plant Sciences, University of Sheffield, Sheffield, S10 2TN, UK
      E-mail: p.armsworth@utk.edu
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  • Szvetlana Acs,

    1. Institute of Prospective Technological Studies, Joint Research Centre, European Commission, Seville 41092, Spain
    2. Division of Economics, University of Stirling, Stirling, FK9 4LA, UK
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  • Martin Dallimer,

    1. Biodiversity and Macroecology Group, Department of Animal and Plant Sciences, University of Sheffield, Sheffield, S10 2TN, UK
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    • Present address: Center for Macroecology, Evolution and Climate, University of Copenhagen, Copenhagen, DK-2100, Denmark.

  • Kevin J. Gaston,

    1. Biodiversity and Macroecology Group, Department of Animal and Plant Sciences, University of Sheffield, Sheffield, S10 2TN, UK
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    • Present address: Environment and Sustainability Institute, University of Exeter, Penryn, Cornwall, TR10 9EZ, UK

  • Nick Hanley,

    1. Division of Economics, University of Stirling, Stirling, FK9 4LA, UK
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  • Paul Wilson

    1. Rural Business Research Unit, Agricultural and Environmental Science, School of Biosciences, University of Nottingham, Sutton Bonington, LE12 5RD, UK
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E-mail: p.armsworth@utk.edu

Abstract

Ecology Letters (2012) 15: 406–414

Abstract

Incentive payments to private landowners provide a common strategy to conserve biodiversity and enhance the supply of goods and services from ecosystems. To deliver cost-effective improvements in biodiversity, payment schemes must trade-off inefficiencies that result from over-simplified policies with the administrative burden of implementing more complex incentive designs. We examine the effectiveness of different payment schemes using field parameterized, ecological economic models of extensive grazing farms. We focus on profit maximising farm management plans and use bird species as a policy-relevant indicator of biodiversity. Common policy simplifications result in a 49–100% loss in biodiversity benefits depending on the conservation target chosen. Failure to differentiate prices for conservation improvements in space is particularly problematic. Additional implementation costs that accompany more complicated policies are worth bearing even when these constitute a substantial proportion (70% or more) of the payments that would otherwise have been given to farmers.

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