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Payments to compensate landowners for carrying out costly land-use measures that benefit endangered biodiversity have become an important policy instrument. When designing such payments, it is important to take into account that spatially connected habitats are more valuable for many species than isolated ones. One way to incentivize provision of connected habitats is to offer landowners an agglomeration bonus, that is, a bonus on top of payments they are receiving to conserve land if the land is spatially connected. Researchers have compared the cost-effectiveness of the agglomeration bonus with 2 alternatives: an all-or-nothing, agglomeration payment, where landowners receive a payment only if the conserved land parcels have a certain level of spatial connectivity, and a spatially homogeneous payment, where landowners receive a payment for conserved land parcels irrespective of their location. Their results show the agglomeration bonus is rarely the most cost-effective option, and when it is, it is only slightly better than one of the alternatives. This suggests that the agglomeration bonus should not be given priority as a policy design option. However, this finding is based on consideration of only 1 species. We examined whether the same applied to 2 species, one for which the homogeneous payment is best and the other for which the agglomeration payment is most cost-effective. We modified a published conceptual model so that we were able to assess the cost-effectiveness of payment schemes for 2 species and applied it to a grassland bird and a grassland butterfly in Germany that require the same habitat but have different spatial-connectivity needs. When conserving both species, the agglomeration bonus was more cost-effective than the agglomeration and the homogeneous payment; thus, we showed that as a policy the agglomeration bonus is a useful conservation-payment option., (© 2016 Society for Conservation Biology.)

Many species need to cross landscapes for dispersal or seasonal migration. In view of the biodiversity crisis and increasing landscape fragmentation, incentives are needed to foster landscape connectivity and improve spatial coordination of protected sites across privately owned land. A large body of theoretical work and lab studies proposes that an agglomeration bonus could incentivize farmers to enroll adjacent fields to enhance landscape connectivity. This study empirically investigates a network bonus scheme in Switzerland with a dataset covering 322 program areas. In some program areas, farmers can receive the network bonus only if they are compliant with an adjacency rule of 100 m between sites, a policy that corresponds to an agglomeration bonus. In other areas, this rule does not apply, i.e. farmers can apply for the same bonus but irrespective of the location of their field vis-à-vis others. We empirically compare the impact of this policy with a double robust estimation. Counter to the expectations from the theoretical literature, our results show no impact of the agglomeration bonus on connectivity. [ABSTRACT FROM AUTHOR]

The costs of conserving land for species generally vary in space and time. In addition, they are not exogenous to the land-use dynamics but develop endogenously. This gives rise to feedback loops because the costs determine the land use dynamics which in turn determine the costs. This cost feedback is likely to affect the effectiveness of biodiversity conservation instruments that target land use in a spatially explicit manner. In the present paper a model of a tradable permit market with agglomeration bonus is extended for the consideration of cost feedbacks such that the presence of conserved land in the neighborhood may increase or decrease the local cost. The model analysis demonstrates that the in the former case the level of spatial clustering of conserved land is reduced while in the latter case it is increased. Clustering of conserved land is important for many species and thus cost feedbacks will eventually affect the survival of species and need to be considered in the design of conservation instruments. [ABSTRACT FROM AUTHOR]

Globally, much biodiversity is found on private land. Acting to conserve such biodiversity thus requires the design of policies which influence the decision-making of farmers and foresters. In this paper, we outline the economic characteristics of this problem, before reviewing a number of policy options, such as conservation auctions and conservation easements. We then discuss a number of policy design problems, such as the need for spatial coordination and the choice between paying for outcomes rather than actions, before summarizing what the evidence and theory developed to date tell us about those aspects of biodiversity policy design which need careful attention from policy-makers and environmental regulators. [ABSTRACT FROM PUBLISHER]

This paper examines an experiment conducted to explore a voluntary incentive mechanism, the agglomeration bonus, designed to protect endangered species and biodiversity by reuniting fragmented habitat across private land. The goal is to maximize habitat protection and minimize landowner resentment. The agglomeration bonus mechanism pays an extra bonus for every acre a landowner retires that borders on any other retired acre. The mechanism provides incentive for non-cooperative landowners to voluntarily create a contiguous reserve across their common border. A government agency''s role is to target the critical habitat, to integrate the agglomeration bonus into the compensation package, and to provide landowners the unconditional freedom to choose which acres to retire. The downside with the bonus, however, is that multiple Nash equilibria exist, which can be ranked by the level of habitat fragmentation. Our lab results show that a no-bonus mechanism always created fragmented habitat, whereas with the bonus, players found the first-best habitat reserve. Once pre-play communication and random pairings were introduced, players found the first-best outcome in nearly 92% of play. [Copyright &y& Elsevier]

Payments for ecosystem services (PES) can encourage land owners to manage their land in a biodiversity-friendly way. To increase the effectiveness of PES for biodiversity conservation, incentives could be set to reach a minimum size of conservation area and a suitable spatial connectivity between conserved areas. However, little knowledge exists about which incentives most likely generate such landscape patterns since threshold effects and spatial connectivity have been mostly considered separately. Therefore, we present results from a framed field experiment with Indonesian oil palm farmers and compare the effectiveness between two conditional group payment schemes: In the first one, the size threshold payment, payments are made if at least three farmers in the group conserve. In the second one, an agglomeration payment, payments are made if at least three farmers with bordering land engage in conservation. Our results suggest that both PES designs are similarly effective in the absence of communication. Under both, communication increases conservation outcomes in the case of previous successful coordination and is ineffective in the case of previous coordination failure. Yet, for individuals who are reluctant to conserve, communication only increases conservation outcomes under the size threshold payment. We further discuss potential welfare implications of our results. [ABSTRACT FROM AUTHOR]