Cost-effectiveness of state-dependent versus state-independent agri-environment schemes for biodiversity conservation

A key policy instrument to conserve biodiversity in agricultural landscapes are agri-environment schemes (AES). AES typically incentivise specific conservation measures which are independent of a specific state of an ecosystem or a species. In this paper we take up the idea of state-dependent conservation measures which means that in each period of interest the decision about the design of the conservation measure is made dependent on the state of the ecosystem or the species of interest. We develop a modelling framework to compare the cost-effectiveness of AES which incentivise state-dependent conservation measures (AES-SD) with AES which incentivise state-independent conservation measures (AES-SI). We apply the framework to a case study of meadow bird conservation through specific mowing regimes in the Aller river valley in Germany, and compare an AES-SI with fixed mowing dates and an AES-SD with mowing dates depending on the phenological start of spring. We find that AES-SD substantially outperforms AES-SI. Cost-effectiveness gains arise as the connection of mowing dates to phenological events increase the breeding success of the meadow birds but also as farmers accept slightly lower compensation payments as mowing in dependence of the state of the grassland reduces fluctuations in their fodder yields.