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As a means to adapt to climate change, the Mexican government grants, since 2003, payments as an incentive for landholders to conserve, maintain and increase the provision of environmental services through the promotion of a forestry strategy. This paper contributes to the literature with an empirical analysis of the impact of payments for reforestation in one of the states with the highest rates of deforestation, Michoac n. The impact is estimated by means of panel data regressions and propensity score matching. Our results suggest that the payments are not contributing to the overall reforestation in Michoac n because of the existence of leakage in areas that are not participating in the program. Our analysis underlines the challenges faced when implementing financial incentive based programs and provides policy makers with evidence for improving the design of such programs.

The United Nations' Convention on Biological Diversity raised expectations of high benefits in genetic resource trade with megadiverse countries. As a reaction the Andean Community (CAN) passed strict community access legislation. Against this background the main objective of this paper is to investigate whether public eco-regional cartels of megadiverse countries on the genetic resource market can increase the appropriable benefits from biodiversity. We analyse how cartel design affects cartel benefits and discuss the benefit distribution among cartel members. As a case study we examine the CAN community access legislation (Decision 391) in the light of biodiversity collusion. Our main finding is that cartels-contrary to their negative connotation-are potentially able to stimulate genetic resource trade, increase the providers' appropriable benefits from biodiversity, and reduce the costs for customers. This depends largely on the cartel design and the ability to attract bioprospecting agents. A member's benefit share rises in the member's relative biodiversity richness and even more in the quality of the institutional environment. The CAN collusion nullifies its market power by a deterringly overly strict access regulation and a lack of internal cooperation.

The current study seeks to assess the private benefits associated with integrated soil conservation practices (ISCPs) by estimating the marginal value of crop production that can be attributed to such practices. In areas where land degradation associated with soil erosion causes serious agri-environmental challenges such as loss of land fertility, siltation and eutrophication, an integrated approach to soil conservation is necessary. However, notwithstanding efforts to encourage adoption of such practices, their uptake remains generally low. Understanding this deplorable status therefore warrants keen investigations on the effect of ISCPs on crop productivity. To achieve the objective, the current study applied propensity score matching and exogenous switching regression techniques to cross-sectional data collected from a random sample of farm households located in Lake Naivasha basin, Kenya. Results indicate that there is a significant positive effect of implementing integrated soil conservation practices on crop productivity. However, we note that whether the additional benefits will cover the opportunity costs associated with the implementation of these practices will depend on farm specific attributes. In cases where marginal benefits are not substantial to over private incentives for implementation of soil conservation practices, intrinsic or external incentives could be necessary.

There is a broad discussion about the inclusion of agriculture into greenhouse gas reduction efforts, such as the Kyoto mechanism. As most agricultural GHG emissions stem from non-point sources, they cannot be directly measured and therefore have to be derived by calculation schemes (indicators). We designed five such GHG indicators for dairy farms and analysed trade-offs between these indicators´ feasibility, measurement accuracy and abatement costs based on emission reduction simulations with a highly detailed single farm optimization model. Results indicate that the trade-offs depend both on farm characteristics and on the targeted reduction level. In particular, advantages of detailed indicators decrease for higher abatement levels.

After a brief description of the ecological problems faced in the Lake Naivasha basin in Kenya, this paper describes shortcomings of existing environmental policy instruments employed by the Kenyan government. We argue that under certain conditions a bargaining process among commercial resource users at the lake and farmers at the upper catchments could enhance the robustness of this specific social ecological system (SES) by making use of Payments for Environmental Services (PES). The necessary conditions are: lake users’ perception of damages from permanent environmental problems like siltation and eutrophication that can be addressed by actions in the upper catchment, a minimal back up from the government that allows user groups to enforce their own rules, and a sufficient level of trust inside and between the different user groups. At the same time, the analysis identifies substantial obstacles for using PES to reduce water abstractions in the upper catchment and points out that the nature of the ecological problems and the societal situation at the lake interdependently determine the success probabilities of PES.

The location of first generation processing plants for biogas using bulky inputs is a prominent example of locational decisions of plants that face high per unit transport costs of feedstock and simultaneously depend to a large extent on feedstock availability. Modelling the resulting regional feedstock markets then requires a spatially explicit representation of demand. With production capacities of plants small in comparison to market size, large numbers of possible type-location combinations need to be considered, requiring considerable computation time under existing integer programming-based approaches. Therefore, in this paper we aim to present an alternative, faster and more flexible iterative solution approach to simulate location decisions for processing plants. And with greater flexibility, this approach is able to take into account spatially heterogeneous transport costs depending on total demand. The approach is implemented in a modelling framework for biogas production from green maize in Germany, which currently accounts for ca. five percent of Germany's agricultural area. By modifying green maize prices, demand functions are derived and intersected with regional supply functions from an agricultural model to simulate market clearing prices and quantities. The application illustrates that our approach efficiently simulates markets characterised by small-scale demand units and high, spatially heterogeneous transport costs.

In the context of energy security and climate protection, biomass is given high importance. Nevertheless, land-use conflicts resulting from the cultivation of biomass and their economy-wide effects are yet to be fully understood. To shed light on this issue we link three distinctive models; a global, multi-regional general equilibrium model (DART), a regionalised agricultural sector model for Germany (RAUMIS) and a location model for biogas plants. The DART model allows capturing international and national feedback effects of an increased use of bioenergy such as increased agricultural prices. The interaction of DART and RAUMIS links global markets and connects them to the detailed specification of agricultural land use in Germany. Finally, we link this system to the newly developed location model ReSI-M that accounts for the location choices of biogas plants in Germany and the resulting regional markets for energy crop demand. As a first application of the modelling system we analyse the effects of the German Renewable Energy Source Act on German biogas production and of the EU 10%-biofuel target on German agriculture and world agricultural prices. A main result of the simulations is that accounting for existing land-use restrictions and land-use competition has a significant effect on model results.

The worldwide turndown in coffee revenue to the majority of resource poor primary producers has become a serious threat to sustainable development. There is however inadequate knowledge with respect to mechanisms used by resource poor coffee farmers to stave off situations of economic hardship. Using cross-sectional household survey data from southwest Ethiopia, the present study investigates whether or not farmers use forests to even out variability associated with risky coffee income. A zero-inflated negative binomial model was used to explain farmer frequency of firewood collection trips as a response to income shock and risk in coffee farming. The empirical results indicate that a rise in household forest extraction effort for firewood is strongly associated with shortfalls in current coffee income and with income uncertainties prevailing in the coffee sector. The study draws policy implication from the perspectives of development and environment.

A rational negotiation strategy for coming multilateral negotiations regarding climate change requires knowledge about possible social, economic and environmental effects of policy instruments for the abatement of greenhouse gas emissions. With this purpose, an agricultural sector model is expanded to cover greenhouse gas emissions from agricultural sources in Europe and policy instruments for their reduction. This modelling approach concentrates on the application of a permit trade scheme for emission abatement within the Kyoto Protocol ‘first commitment’ baseline. The effects derived of three alternative schemes are described in detail: the EU ‘burden sharing’ agreement option defined as regional emission standards, emission trading between regions inside each Member State, and finally, emission trading between all European regions. The analysis shows the importance of selecting an adequate combination of instruments of emission abatement for the design of efficient emission reduction policies.

In this paper, a brief overview on different economic aspects of greenhouse gas emission abatement in European agriculture is given. Three different typologies of emission mitigation approaches are defined and analysed from a modelling perspective: structural, management and technological measures. Their practical implementation in the CAPRI model is then presented and some selected model results used to analyse the following questions: what is the effect of emission abatement regulation on European agriculture? Are there any indirect environmental benefits to be expected from current CAP reform?