Spatial coordination in payment for ecosystem service schemes: an integrated ecological and economic perspective

Payment for Ecosystem Service (agri-environment) schemes aim to deliver conservation benefits by paying landowners to change their land management in a way in which ecosystem quality and biodiversity outcomes are enhanced. Entry into a PES scheme is voluntary, and payments are intended to be conditional on the delivery of additional environmental benefits over time. For some kinds of ecological objective, having neighbouring patches of land (e.g. adjacent farms) enrolled can deliver higher benefits than having enrolled patches scattered on the landscape. Examples of such objectives include species re-introductions, wetlands restoration, invasive species management and the creation of wildlife corridors. However, such spatial coordination is unlikely to emerge from most PES scheme designs under standard contract designs unless the opportunity costs of conservation and the ecological benefits of site management are strongly spatially correlated in a particular way. For many landscapes, we are unlikely to be able to rely on this spatial correlation pattern to generate “enough” coordination.

For this reason, interest has developed in re-designing PES schemes to provide incentives for neighbouring landowners to enrol together. Two main suggestions have been (i) the Agglomeration Bonus and (ii) spatially-connected conservation auctions. Additionally, some European countries (e.g. the Netherlands)now have PES schemes that are only available to farmers who enrol as part of a collective of neighbours, whilst paying for environmental outcomes rather than for changes in land management has recently been adopted by the National Trust in the UK. The fact that the UK is leaving the Common Agricultural Policy means that opportunities are available for changes in policies which determine how the production of “public goods” in the countryside are funded and incentivised.

This PhD will integrate ecological and economic principles and modelling to investigate three specific research questions related to spatial coordination of conservation actions, with a specific focus on UK agri-environment policy:

1. Using increases in waders in UK farmland habitats as an environmental metric, how much does spatial coordination of participation in agri-environment schemes enhance environmental benefits, relative to scattering enrolment randomly across a landscape?
2. Given the empirical relationship between spatial coordination and environmental benefit identified in (1), what designs of agri-environment contracts would get closest to an ecologically-optimal pattern of spatial coordination, based on voluntary enrolment?
3. What are the net economic and ecological gains from employing the spatially-coordinating contracts identified in (2) compared to a payment-for-environmental-outcomes scheme, where contract payments are related to bird counts on a farmers’ land, rather than changes to land management.

Start date: September 2019