Autumn Series - Webinar 3: Improving the design of PES and agri-environment schemes: some new results

2020 UKNEE Webinar Series 3: Improving the design of PES and agri-environment schemes: some new results

Presenter: Professor Nick Hanley, University of Glasgow

With Brexit, the UK government has the opportunity to change agri-environmental scheme design in a way which both enhances its environmental delivery, and which improves its cost-effectiveness. We argue that research by economists is helpful in thinking about what these kinds of enhancements might look like.
In this webinar, Nick looked at some ideas which economists have been exploring recently in order to enhance the design of PES schemes, focussing in particular on “agri-environment” policies such as those run under Pillar 2 of the CAP and its forthcoming replacements in the UK: 

  1. paying for outcomes (results) rather than paying for management actions;
  2. incentivising spatial coordination amongst farmers and
  3. using non-monetary incentives to increase participation.

Nick presented examples from the experiments in Japan, Uruguay and the US and I’ll be sharing some of the results and lessons. The key lessons is that (not surprisingly!) there isn’t a one design fits all magic PES but what works well is to ensure engagement between regulators, farmers, NGOs and others from the start and throughout. 

Below is the references Nick covered during his talk: 

  • Kuhfuss, L, Preget, R, Thoyer, S & Hanley, N 2016, 'Nudging farmers to enroll land into agri-environmental schemes: the role of a collective bonus' European Review of Agricultural Economics, vol 43, no. 4, pp. 609-636.
  • de Vries, FP & Hanley, ND 2016, 'Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review' Environmental and Resource Economics, vol 63, no. 4, pp. 687-702.
  • White, B & Hanley, ND 2016, 'Should we pay for ecosystem service outputs, inputs or both?' Environmental and Resource Economics, vol 63, no. 4, pp. 765-787.
  • Kuhfuss, L, Preget, R, Thoyer, S, Hanley, N, Le Coent, P & Desole, M 2016, 'Nudges, social norms and permanence in agri-environmental schemes' Land Economics, vol 92, no. 4, pp. 641-655.
  • Liu, Z., Xu, J., Yang X., Qu T., Hanley N. and Kontoleon A. (2019) “Performance of agglomeration bonuses in conservation auctions: Lessons from a framed field experiment” Environmental and Resource Economics, 73:843–869. 
  • Batáry, P., Dicks, L. V., Kleijn, D., & Sutherland, W. J. (2015). Conservation Biology.

Not published yet – for which please get in touch with Nick Hanley: 

  • Banerjee S, Cason T., de Vries F and Hanley Nick (2020) Spatial Coordination and Joint Bidding in Conservation Auctions. Submitted, Journal of the Association of Environmental and Resource Economists.
  • Cortes-Capano G, Hanley N and di Minim E  (2020) Assessing landowners´ preferences to inform voluntary private land conservation: the role of non-monetary incentives. Submitted, Land Use Policy.
  • Tanaka, Katsuya, Kuhfuss L and Hanley Nick (2019) Farmers’ Preferences Toward Outcome-based Payment for Ecosystem Service Schemes. Paper presented to the REECAP conference, September 2019.
  • Kuhfuss L., R. Préget, S Thoyer, Frans de Vries and Nick Hanley (2020) Enhancing Spatial Coordination in Payment for Ecosystem Services Schemes with Non-Pecuniary Preferences. Under review, Ecological Economics.