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Cost-effectiveness of buying land for conservation versus paying land-users for conservation measures – the case of preserving an oligotrophic lake in a Natura 2000 area in North Germany

Listed author(s):
  • Schöttker, Oliver
  • Wätzold, Frank
Registered author(s):

    Cost-effective implementation of measures to conserve biodiversity is often a major target of conservation organisations, and choosing the correct mode of governance can be important in this context. Nature conservation organisations can, in principle, choose between two distinct modes of governance to implement conservation activities: they can (1) buy desired areas of interest and implement conservation measures themselves (buy option), or (2) offer payments to landowners to incentivize them to voluntarily preserve or create habitat on their land (compensation option). In this paper we analyse the cost-effectiveness of these two modes of governance in a case study on a conservation project in a Natura 2000 area in Schleswig-Holstein, Germany. The actual costs of the buying option are compared with the potential costs of implementing the compensation option. We developed a costing framework to compare the costs of both options over time, given they generate the same ecological results on an identical project area. We find that the cost-effective solution depends, among other things, on the conservation timeframe considered and on cost components such as transaction costs, leasehold rent and land prices.

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    File URL: https://mpra.ub.uni-muenchen.de/80661/1/MPRA_paper_80661.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 80661.

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    Date of creation: 06 Aug 2017
    Handle: RePEc:pra:mprapa:80661
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    1. Mewes, Melanie & Drechsler, Martin & Johst, Karin & Sturm, Astrid & Wätzold, Frank, 2015. "A systematic approach for assessing spatially and temporally differentiated opportunity costs of biodiversity conservation measures in grasslands," Agricultural Systems, Elsevier, vol. 137(C), pages 76-88.
    2. Laure Kuhfuss & Raphaële Préget & Sophie Thoyer & Nick Hanley & Philippe Le Coent & Mathieu Désolé, 2016. "Nudges, Social Norms, and Permanence in Agri-environmental Schemes," Land Economics, University of Wisconsin Press, vol. 92(4), pages 641-655.
    3. Regina Birner & Heidi Wittmer, 2004. "On the 'efficient boundaries of the state': the contribution of transaction-costs economics to the analysis of decentralization and devolution in natural resource management," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 22(5), pages 667-685, October.
    4. McCann, Laura & Easter, K. William, 2000. "Estimates of Public Sector Transaction Costs in NRCS Programs," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 32(03), pages 555-563, December.
    5. Edi Defrancesco & Paola Gatto & Ford Runge & Samuele Trestini, 2008. "Factors Affecting Farmers' Participation in Agri-environmental Measures: A Northern Italian Perspective," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 114-131, 02.
    6. Frank Wätzold & Martin Drechsler & Karin Johst & Melanie Mewes & Astrid Sturm, 2016. "A Novel, Spatiotemporally Explicit Ecological-economic Modeling Procedure for the Design of Cost-effective Agri-environment Schemes to Conserve Biodiversity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(2), pages 489-512.
    7. Franzén, Frida & Dinnétz, Patrik & Hammer, Monica, 2016. "Factors affecting farmers' willingness to participate in eutrophication mitigation — A case study of preferences for wetland creation in Sweden," Ecological Economics, Elsevier, vol. 130(C), pages 8-15.
    8. McCann, Laura, 2013. "Transaction costs and environmental policy design," Ecological Economics, Elsevier, vol. 88(C), pages 253-262.
    9. Ferraro, Paul J., 2008. "Asymmetric information and contract design for payments for environmental services," Ecological Economics, Elsevier, vol. 65(4), pages 810-821, May.
    10. Isabel Vanslembrouck & Guido Huylenbroeck & Wim Verbeke, 2002. "Determinants of the Willingness of Belgian Farmers to Participate in Agri-environmental Measures," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 489-511.
    11. Curran, Michael & Kiteme, Boniface & Wünscher, Tobias & Koellner, Thomas & Hellweg, Stefanie, 2016. "Pay the farmer, or buy the land?—Cost-effectiveness of payments for ecosystem services versus land purchases or easements in Central Kenya," Ecological Economics, Elsevier, vol. 127(C), pages 59-67.
    12. Regina Birner & Heidi Wittmer, 2004. "On the ‘Efficient Boundaries of the State’: The Contribution of Transaction-Costs Economics to the Analysis of Decentralization and Devolution in Natural Resource Management," Environment and Planning C, , vol. 22(5), pages 667-685, October.
    13. Schöttker, Oliver & Johst, Karin & Drechsler, Martin & Wätzold, Frank, 2016. "Land for biodiversity conservation — To buy or borrow?," Ecological Economics, Elsevier, vol. 129(C), pages 94-103.
    14. Hily, Emeline & Garcia, Serge & Stenger, Anne & Tu, Gengyang, 2015. "Assessing the cost-effectiveness of a biodiversity conservation policy: A bio-econometric analysis of Natura 2000 contracts in forest," Ecological Economics, Elsevier, vol. 119(C), pages 197-208.
    15. Romy Greiner, 2016. "Factors influencing farmers’ participation in contractual biodiversity conservation: a choice experiment with northern Australian pastoralists," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 60(1), pages 1-21, January.
    16. Juutinen, Artti & Mantymaa, Erkki & Monkkonen, Mikko & Svento, Rauli, 2008. "Voluntary agreements in protecting privately owned forests in Finland -- To buy or to lease," Forest Policy and Economics, Elsevier, vol. 10(4), pages 230-239, February.
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