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Challenges of achieving biodiversity offsetting through agri-environmental schemes: evidence from an empirical study

  • Philippe Le Coent
  • Coralie Calvet
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    Biodiversity offsetting (BO) is increasingly used in environmental policies as a way to halt biodiversity losses caused by the development of infrastructure and urbanization. Ecological gains for offsets have so far mainly been obtained through restoration activities conducted on agricultural land specifically acquired for this purpose by developers. This approach however meets growing technical difficulties due to land availability and social conflicts with farmers. The purpose of this paper is to analyse the opportunity of implementing a new approach to conduct biodiversity offsets through the use of agri-environmental schemes that we call agrienvironmental biodiversity offset schemes (ABOS). This paper reviews the interests, limits and challenges of the use of ABOS in offsetting policies by examining two major issues: (1) the acceptability of offsetting contracts by farmers, and (2) the effectiveness of ABOS design and implementation. Based on the case-study of a major BO programme following the construction of a big railway bypass in the South of France, the article empirically assesses these issues through a survey carried out with 145 farmers. The results reveal that the main determinants of acceptability are: i) the usual economic factors - farmers with lowest compliance levels and opportunity costs, as well as farms facing economic difficulty, are more likely to adopt -, and ii) social factors – the importance given to other farmers’ decision and the feeling that this decision is accepted by farmers’ representatives. In terms of effectiveness, ABOS is shown to be effective in meeting legal requirements of the developer, but concerns are raised about real ecological benefits due to issues of additionality, permanence of land use change, and non-compliance with contract requirements. We particularly highlight problems with contract enforcement – especially due to weak sanctions and monitoring – and farmers’ selection that do not allow minimizing moral hazard and adverse selection, which are inherently attached to agri-environmental schemes. These results raise questions about the relevance of developing ABOS in offsetting policies, and lead us to suggest policy improvements.

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    Paper provided by LAMETA, Universtiy of Montpellier in its series Working Papers with number 10-16.

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    Length: 39 pages
    Date of creation: Sep 2016
    Date of revision:
    Handle: RePEc:lam:wpaper:10-16
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    1. Paul De Grauwe & Gunther Schnabl, 2004. "Exchange Rate Regimes and Macroeconomic Stability in Central and Eastern Europe," International Finance 0404011, EconWPA.
    2. Jonathan David Ostry & Anne Marie Gulde & Atish R. Ghosh & Holger C. Wolf, 1995. "Does the Nominal Exchange Rate Regime Matter?," IMF Working Papers 95/121, International Monetary Fund.
    3. Simon Neaime, 2008. "Monetary Policy Transmission and Targeting Mechanisms in the MENA Region," Working Papers 395, Economic Research Forum, revised Apr 2008.
    4. Paul De Grauwe & Gunther Schnabl, 2008. "Exchange Rate Stability, Inflation, and Growth in (South) Eastern and Central Europe," Review of Development Economics, Wiley Blackwell, vol. 12(3), pages 530-549, 08.
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