Let’s Make A Deal

In Europe, some farmers are paid to periodically mow fields to create habitat for grassland birds – often regardless of the outcome. In Cambodia, villagers are paid to preserve forests – but only if visiting birdwatchers see certain unusual species. But which approach – payment for action, or payment for results – is best for biodiversity? That’s the tricky question tackled by a recent study of so-called “payments for ecosystem services” (PES) schemes.

“There is growing interest in the potential of PES to encourage land managers to protect and enhance the environment,” a team from Bangor University and Imperial College London in the United Kingdom write in the Journal of Applied Ecology. But “questions remain about how PES agreements should be designed.” Currently, most pay for actions believed to benefit biodiversity, with fewer rewarding results.

To explore the relative merits of the two approaches, the team created a theoretical model that started with a “a simple system” consisting of one conservation agency, one land manager and one patch of habitat. The model assumed that the land manager wanted to maximize income from the patch. The agency, meanwhile, had a limited budget and wanted to get the biggest biodiversity boost for its buck. The question of whether it should pay by action or performance depended on a number of factors, the authors concluded.

In general, “payment by action is favored where there is a clear action” that will clearly benefit biodiversity and is relatively easy to measure, they concluded. So paying to increase wetland habitat for birds known to frequent marshes would make sense.

In contrast, in degraded landscapes, or in places where conservationists aren’t sure which actions will bring the most benefit, it might make more sense to pay for results. That’s because “payment by results allows individual managers to optimize their level of action,” especially if they have special knowledge about the habitat they are managing. One key in determining which incentive system might work best, they add, is how much it costs to monitor adherence to activity agreements or changes in biodiversity.

The bottom line, they write, is that “payment by results deserves more attention from those designing biodiversity PES (be they agri-environment schemes in agricultural landscapes or direct payment schemes in more intact ecosystems).” The trick, they add, is for policy makers to learn how to recognize “the conditions under which payment by results or payment by action is most likely to yield cost-effective biodiversity conservation.” – David Malakoff | June 13, 2011

Source: Gibbons, J., Nicholson, E., Milner-Gulland, E., & Jones, J. (2011). Should payments for biodiversity conservation be based on action or results? Journal of Applied Ecology DOI: 10.1111/j.1365-2664.2011.02022.x

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