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Individual versus group-level agglomeration bonuses to conserve biodiversity

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  • Bareille, François
  • Soubeyran, Raphaël

Abstract

Agglomeration bonuses (ABs) are payments conditional on the contiguity of landowners’ conservation areas. We study whether differentiating the bonuses between internal (within-landholding) and external (between-landholdings) boundaries can improve biodiversity conservation. Using an ecological-economic model and game theory, our simulations on realistic landscapes consisting of several multi-plot landholdings reveal that such differentiation is key in determining AB cost-effectiveness. Undifferentiated ABs (where internal equal external bonuses) are the most cost-effective schemes when regulators’ budgets are low. Yet, when budgets increase, AB cost-effectiveness improves by increasingly prioritizing internal over external bonuses, until a budget threshold beyond which only internal bonuses remain. The complexity of compensation between plots belonging to different landowners largely explains these patterns. Given this complexity, the most cost-effective schemes are characterized by little or no cooperation between landowners. Regarding policy, we conclude that differentiated ABs are cost-effective schemes that should be part of the regulators’ toolbox.

Suggested Citation

  • Bareille, François & Soubeyran, Raphaël, 2025. "Individual versus group-level agglomeration bonuses to conserve biodiversity," Journal of Environmental Economics and Management, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:jeeman:v:133:y:2025:i:c:s0095069625000774
    DOI: 10.1016/j.jeem.2025.103193
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    JEL classification:

    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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