Parallel Session Abstracts

Session 1A - Special Session: Growth, Population & Land Use: Biodiversity in the Long Run

Room: Keynes Lecture Theatre

Title: Land Use in the Long Run: What is the future of biodiversity

Authors: Pedro Naso and Timothy Swanson

Presenter: Timothy Swanson, Department of International Economics, The Geneva Graduate Institute.

Abstract: Human appropriation of land use for agriculture has long been the primary determinant of the level of global biodiversity. However, over the past fifty years technological change in the agricultural sector has enabled the accommodation of larger populations without greater land use requirements. The current situation is singular, in that the population will continue to expand over the coming century, but in combination with very substantial fertility decline. This will result in substantial increases in the dependent population, at the same time that there is a reduction in the supply of labour. What does this imply for land use in the coming century? We demonstrate in an endogenous growth model how this combination of peak population and declining fertility could result in technological regression in agriculture, due to the myriad pressures on the labor supply, and the reversal of the longstanding trend toward reduced land use in agriculture. In this sense, the long term future for biodiversity is not so bright.

Title: Evolving demographic trends will shape planetary biodiversity

Authors: Alfredo Cisneros-Pineda, Abhishek Chaudhary, Uris L.C. Baldos, Yolanda Sung, Thomas Hertel

Presenter: Alfredo Cisneros-Pineda, Department of Agricultural Economics, Purdue University.

Abstract: Recently published work highlights how future population growth in combination with other contemporaneous global drivers can degrade natural capital and the associated ecosystem services whereas policies that invest in nature can yield benefits for multiple economic and environmental variables. However, studies have yet to highlight and isolate the consequences of changing demographic dynamics on global patterns of biodiversity (species loss). To fill this research gap, we first project the impact on species loss in a business-as-usual global economic scenario between 2021 and 2030, driven by changes in population, GDP, capital stock, labor force, and productivity growth. Second, we focus on demographic change as a driver of biodiversity and contrast the impacts of historical population growth (2001-2021) with those of future demographic trends (2021-2041) using the same biodiversity metric and economic model. Finally, we analyze how the uncertainty in the biodiversity projections can be allocated to the sources of uncertainty in population based on the United Nations Probabilistic Population Projections. We link a computational general equilibrium economic model with biodiversity characterization factors representing potential species loss per unit area of mammals, birds, amphibians, reptiles, and plants due to human land-uses in different world regions. The findings highlight how slowing population growth in the wealthiest countries will benefit biodiversity in some parts of the world, while continued strong population growth in Africa will lead to more rapid biodiversity loss in other regions. We also identified the economic sectors and three major mechanisms (domestic substitution of imports; direct increase in trade to satisfy the increased population abroad; and indirect increase in trade through third markets) driving the land-use change that explain biodiversity loss in each region. Our results provide insights on the global hotspots, drivers, and linkages that can be useful to several stakeholders (businesses, governments, and conservationists) for making progress towards the achievement of the global biodiversity targets and the UN Sustainable Development Goal 15 (Life on Land).

Title: Economic growth and biodiversity: a sectoral model

Authors: Loris André

Presenter: Loris André, Paris School of Economics, Collège de France and École nationale des ponts et chaussées.

Abstract: Many scientists are claiming that the Sixth Mass Extinction of species is underway. On top of the direct negative impacts on human well-being, one reason to worry is that biodiversity provides numerous ecosystem services that are essential to the economy. Therefore, this paper proposes a global macroeconomic growth model that takes into account the dynamics of biodiversity and the ecosystem services it provides. To do this, I bring together the latest advances in biology on the “Species-Area” and “Biodiversity-Ecosystem Functioning" relationships. I also put forward a new method for estimating sectoral production functions, using input-output tables and their environmental extensions. Importantly, preferences are non-homothetic: there is a minimum subsistence food level. My main results focus on optimal land use on a macroeconomic scale. I show that this value is determined by the trade-off between the total marginal costs and marginal benefits of agricultural production. The costs are broken down into the direct costs of land conversion and the social (productive) costs associated with the loss of ecosystem services. Because of the need for water supply (regulated by biodiversity) in the industrial sector and the non-homothetic preferences, the optimal land use significantly decreases with the development stage of an economy. Its optimal level is half as high (18% vs. 39%) in a developed country as in a less developed one.

Session 1B - Tropical Forests and Policy

Room: Keynes Seminar Room 2A

Title: Greater Flexibility in Payments for Ecosystem Services: Evidence from an RCT in the Amazon

Authors: Gabriela Demarchi, Julie Subervie, Cauê Carrilho, Thibault Catry, Antoine Pfefer and Philippe Delacote

Presenter: Gabriela Demarchi, MOISA (Montpellier Interdisciplinary center on Sustainable Agri-food systems), CIRAD.

Abstract: In Payment for Ecosystem Services (PES) programs, incentive payments conditional on zero deforestation do not always match the time profile of landowners’ opportunity costs. In this study, we examine the impact of adding some flexibility to PES contracts to allow landowners the possibility of receiving part of the financial incentive if some deforestation is detected during the contract period. We ran a pilot PES program in the Brazilian Amazon during the last years of Jair Bolsonaro’s mandate, at a time when incentives to deforest were strong. Using the Becker-DeGroot-Marschak (BDM) mechanism, we implemented a PES procurement auction to elicit landowners’ reservation prices for forest conservation. We embedded the BDM auction in a randomized controlled trial (RCT), which included one control group and two PES treatment groups of about 150 voluntary landowners each. In line with theoretical predictions, we found that, while the flexible PES contract allowing some deforestation saved slightly more forest, the fixed payment contract requiring zero deforestation exhibited a higher benefit-cost ratio when considering payments only. However, when implementation costs are also taken into account, the flexible contract becomes more cost-effective.

Title: Conservation policies are failing to reduce degradation in the Brazilian Amazon

Authors: Cammelli Federic, Gibbs Holly, Gollnow Florian, Levy Samuel Arthur, Stigler Matthieu, Garrett Rachael Devorah

Presenter: Federico Cammelli, Sustainable Agroecosystem Group, ETH Zurich.

Abstract: Despite leaving trees standing, forest degradation causes large declines in carbon stocks biodiversity, and ecosystem services. Over the past two decades, numerous conservation policies to halt deforestation have been rolled out, but relatively little attention has been paid to tackling degradation. More information is needed to understand how deforestation and degradation are linked and how ongoing efforts to reduce deforestation are impacting degradation. Here we propose that the couplings between deforestation, degradation, and policy effectiveness are likely to depend on the severity of current threats and the extent of previous forest loss. With a focus on the case of the Brazilian Amazon, a place with highly dynamic deforestation, degradation, and policy conditions, we examine the effects of deforestation policies on both deforestation and anthropogenic degradation and consider differences across forest frontier stages. We find that with few exceptions both private and public deforestation control policies that reduced deforestation failed to reduce anthropogenic forest degradation. This implies that deforestation policies alone are insufficient to preserve biodiversity and carbon and safeguard forest-dependent livelihoods. Policy approaches that better address fire, logging and other forms of degradation, are urgently needed to address these major gaps in current conservation policy approaches.

Title: Drugs Policies as Conservational Polices? A case study of the eradication of illicit crops in Colombia

Authors: Diego Castro-Amado, Corrado Di Maria and Silvia Ferrini

Presenter: Diego Castro-Amado, School of Economics, university of East Anglia.

Abstract: The extent of coca plantations in the Colombia Amazon has reached its highest level on record and tropical deforestation remains the main environmental concern. Strategies to control the upsurge of illicit crops and tree loss are highly debated as previous findings suggest different and opposite unintended consequences of the anti-drug policies on forest conservation. This paper contributes to disentangling the effect by addressing the selection bias driven by coca enforcement targeting areas with high deforestation rates. We use an exogenous shock of an international lawsuit that forced Colombia to stop coca drug enforcement within a 10 km band of its territory along the international frontier with Ecuador. Estimates from a regression discontinuity design suggest that from 2008 to 2015 aerial coca eradication did not affect the amount of tree loss. Overall, our findings contradict both the idea that antidrug enforcement may be seen as contributing to forest conservation targets and the hypothesis that eradication campaigns increase deforestation.

Title: Agricultural Trade and Deforestation: the Role of New Roads

Authors: Douglas Gollin and Julien Wolfersberger

Presenter: Julien Wolfersberger, Paris-Saclay University, AgroParisTech and Climate Economics Chair of Paris-Dauphine.

Abstract: In this paper, we study how new roads affect the spatial patterns of agricultural production and consequently impact deforestation and development outcomes, focusing on the historical experience of Brazil. We find that the expansion of Brazil’s road network since the 1990s can account for up to one quarter of the total amount of deforestation that the country has experienced, with significant variation across regions. Perhaps surprisingly, our results suggest that the increase in agricultural income attributable to road construction has been more limited. Turning to the future, we examine the potential impact of Brazil’s official infrastructure plans, and we quantify the ecological costs of improving market access in currently isolated areas.

Session 1C - Marine and Fisheries 1

Room: Saltmarsh Reception Room

Title: Measuring Ecosystem Wealth in the Context of Global Conflict

Authors: Ethan T. Addicott, A. John Woodill, David Kling, Steven Mana’oakamai Johnson, James R. Watson

Presenter: Ethan Addicott, Department of Economics, University of Exeter Business School.

Abstract: An important criterion for sustainable resource management is non-declining resource wealth. Existing methods in natural capital asset pricing enable measurement of resource wealth within the boundary of a single decisionmaker; however, as climate change reallocates resource distributions new methods are needed to account for transboundary resources managed by multiple decisionmakers. We compare the one-actor/one-stock approach to the two-actor case through a simulation exercise and demonstrate how actions by one actor can impact another actor’s price function for a shared stock. Multi-actor natural capital asset pricing can be an effective framework for considering the impact of climate change on resources, the propensity for conflict over these resources, and potential sustainability solutions.

Title: Valuing biodiversity in freshwater fisheries: Evidence from Lao PDR

Authors: Benjamin Chipperfield, Paulo Santos and Carly Cook

Presenter: Benjamin Chipperfield, Economics, Monash University.

Abstract: As biodiversity loss escalates and threatens the functioning of ecosystems, it becomes imperative to understand the role biodiversity plays in supporting human well-being. Despite this need, the impact of biodiversity on fishing yield in freshwater systems is not well understood. Using detailed data on fish catch and fish diversity from part of the Mekong River Basin, we take advantage of the natural variation in the physical environment along the river to show that higher levels of diversity lead to economically significant increases in freshwater fish yield. Our results are robust to different methods of measuring fish biodiversity including species and functional richness, and align well with predictions based on ecological theory. Importantly, by measuring functional richness, we show that the community is vulnerable to the extinction of a small number of key species, which if lost, could compromise the productivity of local fisheries. Our analysis suggests that win-win outcomes exist through protecting biodiversity and thereby enhancing food security in freshwater fisheries.

Title: Can ecolabels tune a supply chain? The case of MSC-certified haddock from Norway

Authors: Geir Sogn- Grundvåg, Julia Bronnmann, Ingrid Kristine Pettersen, Frank Asche and Ove Johansen

Presenter: Julia Bronnmann, Department of Business and Sustainability, University of Southern Denmark.

Abstract: It is well established in the literature that fish products with the ecolabel of the Marine Stewardship Council (MSC) obtain price premiums in food retailing compared to non-labeled substitutes. However, premiums vary substantially between species with the expensive Atlantic cod commanding much higher MSC-premiums than a low-value species like Alaska pollock, indicating that it is the most affluent consumers who care about sustainability. This study investigates differences in MSC-premiums for haddock products of high and low value upstream in the supply chain. Findings show a substantial 14% price premium for MSC certified high-end loins and no premiums for lower value products. Provided that the MSC premium for high quality products is shared with fishers, they may be tuned to engage in quality-enhancing fishing practices to land fish of the high quality required for high-end products. The resulting enhanced value creation from limited marine resources can be an added benefit of ecolabeling that goes beyond the certification standard focusing on sustainable fishery management.

Session 1D - Managing Downside Risk

Room: Saltmarsh Dining Room

Title: Effectiveness of organized guarding in reducing mortality from human-elephant conflict: evidence from north-east India

Authors: Nitin Sekar, Sanchaya Sharma, Tanay Bhatt, Arpit Deomurari, Poonam Kumari and E. Somanathan

Presenter: E. Somanathan, Economics and Planning Unit, Indian Statistical Institute.

Abstract: Human-elephant conflict (HEC) frequently results in human and elephant mortality, posing major social justice and conservation concerns across Asia and Africa. While a variety of interventions have been introduced to mitigate HEC, rigorous evaluations of how they affect mortality are practically absent. Using a twenty-year data set from Sonitpur district in Assam, India, we assess whether organized guarding and short-distance drives—which are used to manage HEC in several countries globally—lead to a reduction in human and elephant mortality from conflict as intended. Controlling for changes in land use and economic development, spillover effects, and non-random selection of villages for intervention, we are unable to conclude whether or not organized guarding provides any protection against human death due to HEC. Contrary to expectations, the intervention is associated with an approximately 2.0-2.9 times increase in elephant mortality, with evidence suggesting elephants may be more likely to suffer an accidental death in villages where organized guarding occurs. Our study highlights the indispensability of rigorous evaluations for finding win-win solutions to human-wildlife conflict.

Title: Imposing risks to ourselves and others: Disentangling the role of risk, externalities, and social factors in an economic experiment

Authors: Anna Lou Abatayo and Andries Richter

Presenter: Anna Abatayo, Environmental Economics and Natural Resource Group, Wageningen University and Research.

Abstract: Often, the consequences of environmental decision-making tend to be highly uncertain. This uncertainty may affect not only decision-makers themselves but also, potentially, bystanders. In this paper, we disentangle how risks on oneself, imposing risky externalities on others, and social factors affect individual decision-making through a lab experiment. We find that players are more tolerant towards taking decisions that involve a loss for oneself (a risk to oneself) compared to taking decisions that involve a possible loss for someone else (a risky externality). Further, we find that the combined effect of taking risks and imposing risky externalities has no consequence on decisions beyond the imposing risky externalities alone. Finally, we investigate whether it matters for decision-making whether a risky externality is unilateral or bilateral. A priori, being exposed to risk externalities may lead to more cautious or aggressive risk-taking behavior. We find, in line with rational decision-making, no difference between unilateral and bilateral risks. This suggests that exposure to risk does not affect own risk-taking through a behavioral channel.

Title: Strategic Responses to Enforcement Uncertainty: Modeling Antibiotic Application Decisions in Plant Agriculture

Authors: Khashi Ghorbani and Shadi S. Atallah

Presenter: Khashi Ghorbani, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign.

Abstract: Command and control (CAC) instruments are common policy tools to regulate growers’ agrochemical input use. However, restrictive commands might lead to a green paradox type of outcome whereby growers adjust decisions on the level of production input dependent on individual uncertainty about the enforcement of CAC policy instrument. In this context, we discuss the impact of individual’s uncertainty regarding the enforcement of CAC policy on production input decision, and how lack of CAC enforcement affect growers’ welfare. We study antibiotic effectiveness in plant production as a nonrenewable resource with public good properties. We propose a farm-level decision model of antibiotic use in apple orchards under a hypothetical antibiotic ban. Antibiotic effectiveness evolves over time as a deterministic Markov process, which is decreasing in antibiotic application rate. We define the grower uncertainty about a potential ban occurring in the future as a hazard function. For growers who anticipate an antibiotic ban, we use dynamic programming to derive the analytical solution of optimal antibiotic use. For growers dismissing the possibility of an antibiotic ban, we derive the current value Hamiltonian function and confirm that the optimal trajectory derived in our study is the candidate saddle path to a steady state of the antibiotic application rate by checking the stability of the non-linear system of differential equations. We find that growers who anticipate a ban will benefit from increasing the application rate during the period leading to the ban compared to the grower who dismisses the potential policy shift. However, if the policy ban is not enforced, growers who anticipated the ban suffer significant losses in the long run since antibiotic effectiveness would have substantially declined because of the high application rate during the time leading up to the ban.

Title: The private management of plant disease epidemics: Infection levels and social inefficiencies

Authors: Cesar Martinez, Pierre Courtois, Gael Thebaud and Mabel Tidball

Presenter: Pierre Courtois, CEE-M Center for Environmental Economics, Montpellier University.

Abstract: Plant disease control is often implemented at the private property level and problems of cooperation and coordination between landowners can lead to social inefficiencies. Drawing on the private management problem of sharka on Prunus trees, we analyze an epidemic game and its outcomes according to initial infection levels. We show that, depending on the infection level in each farm, the nature of strategic interactions changes drastically and a wide range of games can occur, including games with multiple or without pure strategy equilibria, and games with coordination or anti-coordination patterns. We characterize the epidemic conditions for which private management produces social inefficiency, and analyze the properties of uniform and differentiated subsidy schemes to solve it. We conclude with a discussion of the policy implications of the ongoing deregulation of sharka management in France.

Session 2A - Impacts of Biodiversity Conservation

Room:  Keynes Seminar Room 2A

Title: The Effect of Birdsong on Self-Reported Mental Health

Authors: Anthony Higney, Claire Buchan, Simon Butler, Melissa Marselle, Eleanor Ratcliffe, Konrad Uebel and Nick Hanley

Presenter: Anthony Higney, University of Glasgow.

Abstract: Does birdsong influence self-reported mental well-being? We present preliminary findings from the first wave of a survey undertaken with 3491 UK survey participants. We match respondents spatially with a unique, granular dataset of local birdsong characteristics. We report the associations between different birdsong acoustic indices and self-reported mental well-being. Finally, we detail the preregistered design for wave 2, where we will combine waves to estimate a causal effect with a difference-in-differences design. We will present these causal estimates at the conference if our paper is accepted.

Title: Public land-use policies have improved biodiversity: A global empirical analysis on the world's grasslands

Authors: Kirara Homma, Jinfeng Chang, Hadi, David Wuepper

Presenter: Kirara Homma, Land Economics Group, University of Bonn.

Abstract: Grassland degradation is a serious global problem. Globally, two thirds of the agricultural land is grasslands, and they play an important role for food production, biodiversity, and climate regulation. Despite their significance, grasslands commonly receive less attention than forests and croplands. Here, we investigate how agri-environmental land-use policies globally influence biodiversity on grasslands. We use satellite-derived data at resolution of 1 km2 annually for almost two decades, spanning the entire globe. Our empirical strategy combines a difference in difference design with a difference in discontinuities design, such that the two designs cross-validate each other. We find that on global average, countries policies have successfully regulated management intensity and increased biodiversity on grassland, as measured in bird species richness. In particular, we find positive policy impacts on, not only common bird species, but also threatened species. However, policies also reduced the protein production for human consumption. Furthermore, we identify an important role of national institutions in making these policies effective: As national institutions improve, the policy impact on bird species richness grows larger

Title: Economic trade-offs of land use change and wildlife values

Authors: Katarina Elofsson

Presenter: Katarina Elofsson, Department of Environmental Science, Aarhus University.

Abstract: Land use conversion entails trade-offs across multiple ecosystem services of biodiversity. Biodiversity is often characterized by spatiotemporal dynamics that affect this trade-off. The aim of this paper is to examine the net benefits from changes in the land use composition, given the consequences for the ecosystem services provided by a harvested migratory prey species. The study is applied to land use and roe deer hunting in Sweden. We examine the spatial dynamics of land use, predator populations, and prey hunting, by using a production function with a dynamic spatial-lag model (dynamic SAR). The results highlight considerable economic gains from conversion of coniferous and broadleaf forests into grazing land, seemingly motivated by the combined effects of roe deer’s habitat-mix preferences and the better opportunities for deer hunting in open areas. Further, there are net economic gains from conversion of coniferous trees into broadleaves. Our findings are informative for policymaking regarding land use planning, and to balance concerns among forest owners, farmers, hunters, and wildlife agencies.

Session 2B - Advances in Sustainability Theory

Room: Keynes Lecture Theatre

Title: Valuing carbon removals’ effect on tipping points and technical change

Authors: Ben Groom and Frank Venmans

Presenter: Frank Venmans, Land Economics Group, University of Bonn.

Abstract: The main value of offsets which abate emissions or store carbon stems from their capacity to cool the earth. However, there may also be secondary effects which we value in this paper. First, offset projects may reduce the cost of the abatement technology via learning-by-doing, economies of scale, endogenous R&D etc. We provide a value for this technological improvement. Second, offsets, even when they are temporary, may reduce the likelihood of tipping points. Tipping points always add value to temporary emission reductions. When tipping points are triggered by exceeding a given unknown temperature, projects that end after peak warming allow to avoid certain tipping points and are most valuable. Projects ending before peak warming merely delay tipping points and have a very modest ’tipping value’. By contrast, tipping points which are triggered by the duration of warming, rather than the exceedance of a trigger temperature, always reduce the likelihood of tipping and the tipping value is proportional to the warming of the period they cover.

Title: Bioeconomic Sustainability and Resilience of Savanna

Authors: Ivric Valaire Yatat-Djeumen, Luc Doyen, Jean Jules Tewa and Bapan Ghosh

Presenter: Luc Doyen, CNRS, Center for Environmental Economics in Montpellier (CEE-M).

Abstract: Our paper investigates the bioeconomic sustainability and resilience of savanna social-ecological systems (SES). A stylized dynamics of an exploited grass-tree systems is thus considered accounting both for the competition between trees and grass along with logging and grass harvesting activities. Regarding sustainability, we rely on bioeconomic viability goals including consumption security for grass, profitability of logging and coexistence of tree-grass states. A first analytical result relates to the elicitation of sufficient sustainability conditions through the non-emptyness of the so-called viability kernel. Such sufficient conditions rely on coupled MSY (maximum sustainable yield)- MEY (maximum economic yield) reference states-controls. A larger viable set including these MSY-MEY equilibria is also identified. The resilience of such viability states-controls for savanna SES facing shocks such as fire is then put forward from both recovery through stability analysis and resistance viewpoints. Simulations inspired from savanna systems in Cameroon exemplify the analytical findings.

Title: Welfare measurement under Knightian uncertainty

Authors: Stefan Baumgärtner and Christian Mittelstaedt

Presenter: Stefan Baumgärtner, Chair of Environmental Economics and Resource Management, University of Freiburg.

Abstract: The ecological and economic impacts of biodiversity loss as well as the effectiveness of conservation policies are subject to “Knightian” uncertainty: we know the potential states of the world but not their respective probabilities. Here, we develop concepts for the economic valuation of welfare changes under Knightian uncertainty, which is a situation when the decision-maker knows the potential outcomes of her action but not their probabilities nor anything similar to probabilities. In particular, we develop concepts for the ex-ante value, in units of sure payoff, of a single-good-payoff that is uncertain in the Knightian sense. These welfare measures are the Knightian analog to the established compensating and equivalent surplus under risk (when probabilities of uncertain outcomes are known). In general, we build on the decision-maker’s Knightian preference function. As examples, we derive analytic solutions for several specific Knightian preference functions from the literature. Our results are relevant for cost-benefit analysis of projects with uncertain benefits, e.g. global and long-term policies addressing biodiversity loss.

Session 2C – Experiments

Room: Saltmarsh Reception Room

Title: Envisioning Collective Action for Sustainable Resource Management. An economic experiment

Authors: Juan Felipe Ortiz-Riomalo, Stefanie Engel and Ann-Kathrin Koessler

Presenter: Juan Felipe Ortiz-Riomalo, Department of Environmental Economics, School of Business Administration and Economics, Osnabruck University.

Abstract: Overcoming complex social-environmental dilemmas entails coordinating individual interests and actions. Therefore, participatory approaches to environmental policy seek to facilitate common understandings and agreements on suitable strategies for socially desirable outcomes.  Among these approaches, participatory vision-building (PVB) seems particularly promising. PVB convenes the relevant actors and facilitates crafting a joint vision about their desired sustainable futures. By helping them visualise this desired future and feel how it would be to be an active part of it, PVB can guide and motivate the required cooperative action to attain the desired outcomes. While previous literature provides detailed descriptions of PVB’s features and potential outcomes, it has not disentangled PVB’s causal impacts on collective action and the possible underlying behavioural mechanisms. In particular, it is unclear whether PVB’s impacts go beyond those of other elements of participatory processes that PVB also comprises, such as social interaction, information exchange and coordination around desirable strategies, outcomes or futures. We address these gaps in a (pre-registered) framed field experiment conducted with 728 Lake Tota (Colombia) farmers. In groups of four members, participants decided between two stylised farming practices over several hypothetical growing seasons. Their decisions affected their seasonal earnings and a hypothetical shared lake’s water level. We compare the behaviour of participants in a PVB treatment, in which they discussed a desired vision for the future, against the behaviour of participants in three control conditions in which they discussed their desired practices, common goals or an externally provided vision statement. Both group and individual cooperation was relatively higher in groups assigned to the PVB treatment than in groups that only discussed their desired practices or an external vision but lower than in groups that discussed a common goal. None of these differences, however, is statistically significant. Our results thus suggest that, albeit potentially effective for collective action, the effects of PVB can be statistically undistinguishable from the effects of other participatory processes aimed at structuring group deliberation to facilitate common understanding among the relevant actors on desired future practices and outcomes. Nevertheless, exploratory analysis suggests significant differences in emotions as intermediate outcomes. Future research should test the generalisability of our findings to other contexts, particularly those with heterogeneous interests. 

Title: Tree Planting Decision under Loss Averse Landowners: a Coordination Game approach

Authors: Lluís Puig-Gonzalez, Jacco Thijssen and Julia Touza

Presenter: Lluís Puig-Gonzalez, Department of Environment and Geography, University of York.

Abstract: The coordination of planting decisions in neighbour lands can promote biodiversity enrichment, but with the risk of getting biological damage that could worsen the economic value of the land. In this paper, we focus on the landowners’ decisions to either plant a trees or not, under the presence of two potential scenarios: one where there is a biodiversity expansion or, another, where pest/disease occurs. This decision environment is extended to a game between two landowners. Additionally, we will stress the variables of the game to reach a 2 × 2 game, where both joint planting and joint not planting become the two (pure strategy) Nash equilibria. After characterising them with the concepts of pay-off, risk and loss dominance; we will extend the game to a repeated one, with the goal of understanding the stochastic stability equilibrium. Some analysis with respect to the parameters of the game will be applied to explore whether landowners can be induced to coordinate their planting decisions. As a conclusion, those policies that contributes to the increase in the expected value of planting could reduce the stochastic stability condition of the joint not planting. However, those policies that reduces the damage of biological hazards could incentive the stability of the joint planting decision between landowners.

Title: Designing markets for bundled environmental goods

Authors: Ben Balmford, Brett Day and Luke Lindsay

Presenter: Ben Balmford, Land, Environment, Economics and Policy Institute, Economics Department, University of Exeter.

Abstract: How to efficiently organise the exchange of environmental goods and services between multiple buyers and sellers? The global market for environmental goods is ever growing and already a multi-billion dollar industry. Yet, the mechanisms through which trades currently occur are poorly organised and highly-inefficient. Such inefficiency stems from the package nature of supply and demand for environmental services, which has yet to be recognised by existing market designs. In this paper we propose and test, both in the real world and laboratory, a package market using the Balanced Winners’ Contribution rule of Lindsay (2018). Proprietary data from the real world shows that the package market design can facilitate trade were current approaches fail. The experimental results point to this new market design offering substantial efficiency gains relative to the current approaches used across the world. This suggests that the real world result is likely to generalise, and is underpinned by the package market alleviating exposure risk.

Session 2D - Urban Environment

Room: Saltmarsh Dining Room

Title: Hot Cities, Cool Choices: The Effect of Optional and Obligatory Information on Stated Preferences for Urban Green Spaces

Authors: Nino Cavallaro, Fabian Marder and Julian Sagebiel

Presenter: Fabian Marder, Faculty of Economics, University of Leipzig; German Centre for Integrative Biodiversity Research (iDiv), Halle-Jena-Leipzig.

Abstract: The type and amount of information provided to respondents in stated preference studies plays a central role for the validity of derived preference estimates. Finding the right balance between too few and too much information is a key task in the study design, but so far the guidance from the literature is limited. We employ an exogenous three split-sample approach to test for information effects in a choice experiment on urban green spaces. In one split sample, we supply respondents with information about urban heat islands together with related quiz questions and self-reference questions. In the second split sample respondents can voluntary access the same information and the third split sample receives no treatment. Our approach enables us to test the effect of an obligatory versus an optional information treatment on survey engagement, consequentiality, information recall and stated preferences. We find that both– obligatory and optional information treatments– do not affect survey engagement and consequentiality, but increase information recall and willingness to pay for naturalness of and proximity to urban green spaces. The effects are more pronounced for the obligatory treatment. Additionally, we find that respondents who voluntary access information do recall information better and have a higher willingness to pay. We show that the effects of voluntary information access can be mainly attributed to self-selection. Our study provides useful insights on how to improve information provision in stated preferences studies.

Title: Bright and green? A global view on density and the trade-off between economic activity and green spaces for over 1000 cities

Authors: Konstantin Reisner, David Castells-Quintana and Melanie Krause

Presenter: Konstantin Reisner, Faculty of Economics and Management Sciences, Leipzig University; German Centre for Integrative Biodiversity Research (iDiv), Halle-Jena-Leipzig.

Abstract: As the world urbanises rapidly, cities have grown substantially in the last decades. In this paper, we study the important trade-off in the use of urban land that comes with urban growth, namely between green areas and needed living and working space. We do so by building a novel and unique panel dataset combining gridded data on population, area, built up surface and volume, urban greenness, and nighttime lights (as a proxy for economic activity). Our global sample covers over 1000 cities between 1985 and 2020. We identify key global stylised facts as well as main differences across world regions. Relying on panel-data econometric techniques, we provide estimates for the elasticity of economic activity, building volume and greenness to population density, and explore heterogeneities across income levels and different city sizes. Finally, we provide a stylized theoretical framework for the dependence of optimal urban greenness on population growth.

Title: Unraveling a Vicious Cycle: The Interplay Between Extreme Weather Events, Urban Expansion, and Deforestation

Authors: Leonie Ratzke, Melanie Krause and Sebastian Sippel

Presenter: Leonie Ratzke, Faculty of Economics and Management Sciences, Leipzig University.

Abstract: We examine the nexus between extreme weather events, urban expansion and tree cover loss in a global data set of regions from 163 countries spanning the years2001-2018. We delve into how droughts and floods may drive rural-urban migration, triggering urban expansion that often leads to deforestation. This deforestation can in turn exacerbate flood and drought damages. Employing a four-equation Simultaneous Equations Model, we provide evidence of a vicious cycle of tree cover loss, increased drought damages and urban expansion at the global scale. Yet, we also find substantial spatial heterogeneity, especially for the role of tree cover loss in attenuating or amplifying drought damages. We differentiate by world region and development level to show varying dynamics of urban expansion, deforestation and damages, with relevant policy implications for managing urban growth and environmental sustainability.

Session 3A - Voluntary Forest Policy

Room: Saltmarsh Reception Room

Title: The Voluntary Carbon Market's Contribution to Land Restoration in Senegal: A Study of Territorial Interactions and Financing Instruments

Authors: Morgane Gonon, Remi Prudhomme, Harold Levrel, Adrien Comte

Presenter: Morgane Gonon, AgroParisTech

Abstract: The voluntary carbon market is often proposed as a funding solution for climate action and biodiversity, particularly in emerging and developing economies. The empirical literature has primarily focused on evaluating the ecological effectiveness of this mechanism, while its interaction with other financing channels on a national territory remains underexplored. Our research investigates the contribution of the voluntary carbon market to land restoration efforts in Senegal. We used the organizational economics framework to systematically assess how institutional but also ecological characteristics influence project attractiveness from a market perspective, and the implications on project implementation. This analysis is based on fieldwork and a novel comprehensive dataset of ecological restoration projects implemented in Senegal from 2007 to 2023. Our findings reveal that the spatial distribution of funding mechanisms is influenced by success rates and the complexity of ecological protocols, with carbon projects focused on low-risk and high-success rate ecological practices and ecosystems. The conditions necessary for market viability, and the resulting spatial allocation of capital, allow only limited alignment with local needs. Our contribution is twofold: methodological, by integrating biophysical conditions into the transaction cost framework, and thematic, by shedding light on the interactions and coordination issues among ecological funding mechanisms at the territorial level.

Title: Willingness-to-claim voluntary carbon offsets: market evidence of revealed-preferences

Authors: Tara L’Horty, Anna Creti, Philippe Delacote, Micah Elias

Presenter: Tara L’Horty, Université de Lorraine, AgroParisTech-INRAe,

Abstract: The global Voluntary Carbon Market (VCM) comprises a diverse range of carbon credits, of heterogeneous quality and purchased by a broad spectrum of buyers. Our paper aims to shed light on buyers’ preferences for voluntary carbon offsets (VCO). We utilise the level of retirements of carbon offsetting projects to capture the cross-sectional variation of buyers’ willingness-to claim certificates associated with project attributes and context characteristics through logistic regression on a subset of the Voluntary Registry Offsets Database. Key findings include the heightened appeal of projects certified by Verified Carbon Standard over other standards, the greater attractiveness of renewable energy projects, and the preference for projects in regions with lower human development indices. Further data is needed to establish correlations with project additionality and the impact of storytelling marketing strategies.

Title: What are the Limits to Private Certification? Evidence from an Attempt to Protect Intact Forests

Authors: Kenneth Houngbedji, Johanna Isman, Maria Plakhtieva, Liam Wren-Lewis

Presenter: Liam Wren-Lewis, Paris School of Economics, INRAE

Abstract: Voluntary certification schemes encourage companies to adopt production technologies that benefit society positively. However, whether these schemes can motivate companies to reduce negative externalities by restricting production volume is uncertain. Specifically, we study the impact of modifications made to the FSC standard that required the preservation of a minimum of 80% of so far undisturbed, intact forest landscapes (IFL) within certified forests. We analyse the effects on certification decisions and the conservation of IFL. To examine those, we link geographic information on forest concessions with remote sensing of the forest area, details about FSC certification, and audits in countries characterised by substantial areas of IFL. We use a difference-in-differences framework. Our findings reveal that in Russia, after the modification in the FSC standard, concessions with IFL were less inclined to get or remain FSC-certified compared to those lacking IFL. Additionally, we find indications that the change contributed to the conservation of IFL. However, the drivers behind these improvements remain elusive, as our study does not uncover reductions in tree cover loss within the IFL.

Session 3B - Choice Experiments 1

Room: Saltmarsh Dining Room

Title: An Experimental Approach to Farmer Valuation of African Rice Genetic Resources

Authors: Nicholas Tyack

Presenter: Nicholas Tyack, University of Saskatchewan

Abstract: Genebanks serve as both providers of valuable traits for breeding programs and repositories of diverse crop genetic material representing society's agricultural heritage. In this study, we use a Becker-DeGroot-Marschak mechanism to elicit the willingness-to-pay of rice farmers in Côte d’Ivoire for small amounts of African rice (Oryza glaberrima) landraces held by the genebank of the Rice Biodiversity Center for Africa, as well as for seed of newly developed ARICA rice varieties bred using genebank materials. Using a field experiment, we additionally investigate how randomized exposure to and experimentation with small amounts of African rice landrace seed or seed of advanced rice varieties developed by AfricaRice affect how smallholder rice farmers value these novel genetic resources. Surprisingly, we find that farmers generally value having access to African rice landraces at roughly the same level as for advanced rice varieties (and far above market rates for improved seed), and that those farmers who grew landrace seed in the offseason were willing to pay more than those who did not. Our results demonstrate the additional value provided by the conservation of African rice landrace varieties (apart from their use in breeding), and highlight the importance of experimentation in the adoption process.

Title: Monetary valuation of fauna in legal frameworks of European countries: A comparative analysis

Authors: Francx Axelle, Rousseau Sandra

Presenter: Francx Axelle, KU Leuven

Abstract: With global biodiversity loss accelerating, illegal actions and behaviours pose a significant threat to conservation efforts. Effective conservation strategies are hindered by the lack of a comprehensive understanding of how biodiversity is valued in a legal context. This study focuses on European countries where specific monetary values have been assigned to fauna species within legal frameworks to aid law enforcement. Despite these efforts to clarify the legal valuation of species, limitations persist, including unclear valuation processes and outdated monetary values. We construct a unique dataset combining species-specific monetary values with relevant biological data. Analysing the dataset using a mixed-effects regression model, we uncover implicit decision criteria within legal frameworks. Descriptive results reveal insights into species prioritization and valuation, underscoring the existence of taxonomic biases. Additionally, the study highlights the influence of biological criteria such as generation lengths, and underscores the critical role of global protection status in influencing monetary valuation. Thus, this research improves our understanding of regulatory preferences regarding biodiversity conservation and provides essential decision criteria for determining sanctions for biodiversity crimes. By unravelling the complexities of monetary valuations, the study offers policymakers insights to enhance conservation policies and reevaluate the use of monetary values at the species level.

Title: Enhancing data quality in online surveys: a comparison across countries

Authors: Maria Loureiro

Presenter: Maria Loureiro, University of Santiago de Compostela

Abstract: Online surveys present challenges for data quality, particularly at an international level where cultural differences can influence how respondents react. Recognizing and addressing these cultural variations is crucial for reliable cross-cultural research. Hence, researchers must consider cultural nuances, adapt survey instruments, tackle language barriers, and consider technological and socioeconomic factors. This study uses the same online survey to assess preferences for post-wildfire restoration actions in Spain, France, and Portugal. Various strategies, including paradata, bogus questions, and an oath of conscientiousness, are employed to gather data and enhance data quality. Significant differences are observed in survey completion times and participant engagement among countries, with Spain having the highest percentage of survey speeders, despite claiming a better understanding of the survey. Following a data quality assessment and excluding inattentive respondents, we find that countries with more hectares burned exhibit higher Willingness to Pay (WTP) for post-fire risk prevention. Hence, we advocate for adopting multiple strategies to enhance data quality, particularly useful for international survey research.

Session 3C - Special Session: Ecological-Economic Modelling

Room:  Keynes Seminar Room 2A

Title: Cost-effectiveness of result-based versus measure-based agrienvironment payments in a landscape with pre-existing landscape elements: insights from an ecological-economic model

Authors: Caterina De Petris, Frank Wätzold

Presenter: Caterina De Petris, Department of Environmental Economics, Brandenburg University of Technology Cottbus-Senftenberg

Abstract: Agri-environment schemes (AES) are typically measure-based, meaning that farmers are rewarded based on the implementation of specified conservation measures. However, result-based schemes have emerged as a promising alternative, whereby farmers are rewarded based on the achievement of specified conservation goals such as the occurrence of a particular species on their land. Given that the presence of pre-existing landscape elements such as hedges, trees and water bodies has a positive impact on some species and therefore increases the likelihood of species occurrence, farmers may internalise this aspect in their decision-making process and conduct spatial targeting in relation to their decision of participating in result-based schemes. In contrast, the presence of landscape elements and the resulting likelihood of species occurrence does not play a role in farmers’ participation in measure-based schemes. Yet, the impact of landscape elements on the cost-effective design of AES has received insufficient attention in the literature. This paper develops a generic ecological-economic model to gain an understanding of which ecological and economic parameters affect the cost-effectiveness of AES against this newly analysed aspect of landscape elements. In terms of policy recommendations, the paper provides general insights into the extent to which the analysed parameters affect the comparative cost-effectiveness of result-based versus measure-based AES in landscapes with landscape elements.

Title: Learning coalition formation under an agglomeration bonus

Authors: Martin Drechsler

Presenter: Martin Drechsler, Helmholtz Centre for Environmental Research

Abstract: Numerous theoretical and empirical studies have demonstrated the potential of coordination incentives like the agglomeration bonus for the cost-effective establishment of species habitat networks in agricultural landscapes. Less well understood is how such a spatial collaboration between several landowners establishes. In the present paper this issue is addressed by simulating the coalition formation between several landowners in a stylized but structurally realistic landscape. The study is based on a previous paper on coalition formation under an agglomeration bonus, but rather than analyzing the stability of coalitions of rational agents it explicitly simulates the learning dynamics of bounded-rational agents. The coalition structure is shown to sensitively depend on assumptions about the agents’ learning behavior. In contrast, the emerging land-use pattern–in particular the proportion and spatial aggregation of conserved land parcels–appears to be relatively robust against assumptions on learning behavior; instead it depends on economic circumstances, such as the spatial distribution of the farm properties and the conservation costs, as well as the presence or absence of side payments among the landowners.

Title: What about agglomeration bonus plus malus as a policy option for AES? A case study hedge planting scheme for bird conservation in Saxony Germany

Authors: Nonka Markova-Nenova, Ryo Ogawa, Astrid Sturm, Charlotte Gerling, Lisanne Hölting, Anna F. Cord, Frank Wätzold

Presenter: Nonka Markova-Nenova, Brandenburg University of Technology Cottbus-Senftenberg

Abstract: Habitat fragmentation through agricultural intensification has resulted in a substantial biodiversity loss, declining populations of farmland bird species are one visible representation for this trend. To reconnect available habitat a suitable policy instrument could be an agglomeration bonus for increasing structural diversity in the landscape, e. g. through planting new hedges. Such a policy could have a general positive effect on biodiversity, but higher hedge density could also have negative effects for some species. An alternative policy option could be a combination of agglomeration bonus and a malus, setting specific threshold levels of hedge densities to be reached. To examine the cost-effectiveness of such a policy we develop an ecological-economic model which is applied to real spatial agricultural data from a case study region in Saxony, Germany. We also compare the cost-effectiveness of this bonus-malus combination to homogeneous payment, and to a homogeneous payment combined with agglomeration bonus for the conservation of five farmland bird species. The model is derived from and applied to a specific case study region, but can be developed further and adjusted to different landscapes and applications.

Session 3D - Biodiversity in markets

Room: Keynes Lecture Theatre

Title: Payments for Ecosystem Services as (Un-)Insurance

Authors: Sophie Harzer, Martin Quaas

Presenter: Sophie Harzer, German Centre for Integrative Biodiversity Research

Abstract: Farmers rely on fluctuating marketable ecosystem services, which exposes them to income uncertainty. Payments for Ecosystem Services (PES) have gained popularity as a means to incentivize farmers to provide public-good ecosystem services. We study if PES can help insuring against the income risk faced by farmers. We set up an ecological-economic model incorporating interconnected income sources, from marketable ecosystem services and from payments for public-good ecosystem services, which are both uncertain. We show that both action-based and performance-based PES have different insurance functions, the latter depending on the correlation between marketable and public-good ecosystem service provision. We apply the model to data from a large-scale grassland experiment with biomass yield as marketable ecosystem service and soil organic carbon as public-good ecosystem service, both of which are affected by plant biodiversity. Both types of PES result in an increase in adopted diversity and both result in the stabilization of the farmer’s income based on natural insurance. Performance-based PES increase income risk based on the positive correlation between soil organic carbon and biomass yield.

Title: Incorporating biodiversity into net national income

Authors: Jette Bredahl Jacobsen, Thomas Lundhede

Presenter: Jette Bredahl Jacobsen, University of Copenhagen

Abstract: This paper presents a framework for and an example of calculating and incorporating biodiversity loss into the Danish green net national income. Emphasis is on the non-use value of biodiversity, mainly to avoid double counting. We use the IUCN-developed red list indicator to calculate the loss of species over time. This is combined with monetary value estimates from a study of the general public’s willingness to pay for species conservation to avoid species loss. The results is not a standard welfare measure of total loss, but rather measured in marginal values corresponding to other entries in National gross domestic product accountings. We find that the annual lost biodiversity constitutes around65billion DKK (2023 level), and the additional species loss every year to almost60billion DKK per year. Hence the cost of biodiversity loss is one of the biggest reductions in natural capital that we see.

Title: Lost and Found: Valuing biodiversity in a natural field experiment on charitable donations

Authors: Michael Tanner

Presenter: Michael Tanner, University of Hamburg

Abstract: Non-governmental and non-for-profit organizations in developing countries provide critical local and global public goods, supplementing and in some cases replacing the role of the state. Their role is particularly salient on environmental conservation, given the concentration of biodiversity in the global south, and the relative importance of other pressing needs in developing settings. Typically, these NGOs are highly dependent on attracting donations from developed nations to fund their operations. Partnering with an NGO provisioning environmental goods in a developing country, I carry out an online field experiment where analyzing the effect of loss and gain framings on donation behavior. I Utilize the extinction of a subspecies of the Galapagos Tortoise and the rediscovery of another previously believed-to-be extinct subspecies. Based on these two virtually indistinguishable species, I create two donation campaigns through an email appeal targeting donors from developed countries using a stratified randomization approach based on past in person and online donation behaviour and nationality. Conducting intention to treat and completers analyses, I find that an extinction loss frame leads to higher levels in both the probability of donation and donation amount than a rediscovery gain-framed text. Looking at heterogeneous treatment effects I find evidence that the gain frame increases the probability of donation for individuals who personally visited the NGO’s exhibition in the Galapagos. Furthermore, I explore the role of emotions, finding suggestive evidence of loss aversion having lower engagement and significantly lower self-assessed positive emotions than the gain campaign, albeit it delivering significantly more donations.

Session 4A - Special Session: Forests and development

Room: Saltmarsh Reception Room

Title: Forest protection and human health: the case of Malaria in the Brazilian Amazon

Authors: Luiza M Karpavicius, Ariaster B Chimeli

Presenter: Ariaster B Chimeli, Department of Economics, University of São Paulo

Abstract: Ecosystem degradation and contact with wildlife is often linked to infectious diseases such as COVID-19 and malaria, a major cause of death and incapacitation worldwide. This paper investigates a quasi-experiment involving two forest protection policies for the Brazilian Amazon region and their consequences to malaria incidence. The first inadvertently increased forest degradation in part of the Amazon, whereas the second curbed deforestation in the entire region. Using actual malaria case data distributed across space and over 17 years, we estimate the causal link between deforestation and malaria. The results imply that effective forest protection reduced malaria incidence by over 50%.

Title: Staggered protection: a study of the dynamic effects of protected areas

Authors: Thiago F. Morello R. Silva, Paula Carvalho Pereda, Ana Carolina M. Pessôa, Liana O. Anderson

Presenter: Thiago F. Morello R. Silva, Federal University of ABC; Environment, Economics and Policy Institute, University of Exeter

Abstract: Previous estimates of the effect of the creation of protected areas (PAs) on natural conservation8are biased by staggered protection and confounder environmental policies. We address these biases by employing a cohort-time refined estimator using Amazon Basin data from 2003 to 2020. We also uncover policy-relevant dynamic patterns that remained hidden in previous papers’ aggregate effects. Our findings show that PAs’ effects on deforestation and fires were biased in at least 50% by staggered protection. Failure to control for confounder policies inflated the effects on deforestation and fires by 27% and 3%, respectively. We also observe a rise in deforestation two years before protection, an evidence of forward-looking behaviour. Moreover, PAs’ effects increased with ageing, suggesting that enforcement is subject to learning. Effects were heterogeneous, with both moderately and severely restricted Pas mitigating fires, but only the severely restricted mitigating deforestation. The effects of conservation unit PAs managed by national or subnational governments were mixed, whereas indigenous land PAs successfully curbed deforestation and fires. No type of PA could diminish artisanal goldmining, a highly environmentally detrimental activity. Better managed PAs were more likely to avoid deforestation. PAs’ effects were also showed to be driven by the mechanisms of reduced indigenous migration and perpetuation of low market integration. Therefore, with dynamic and heterogeneous effects, PA creation should leverage the strengths of different government levels and PA types, while simultaneously anticipating forward-looking reactions. Goldmining prohibitions inside PAs must be also enforced.

Title: Sacred Ecology: The Environmental Impact of African Traditional Religions

Authors: Neha Deopa, Daniele Rinaldo

Presenter: Daniele Rinaldo, University of Exeter Business School and Land, Environment, Economics and Policy Institute

Abstract: Do religions codify ecological principles? This paper explores theoretically and empirically the role religious beliefs play in shaping environmental interactions. We study African Traditional Religions (ATR) which place forests within a sacred sphere. We build a model of non-market interactions of the mean-field type where the actions of agents with heterogeneous religious beliefs continuously affect the spatial density of forest cover. The equilibrium extraction policy shows how individual beliefs and their distribution among the population can be a key driver of forest conservation. The model also characterizes the role of resource scarcity in both individual and population extraction decisions. We test the model predictions empirically relying on the unique case of Benin, where ATR adherence is freely reported. Using an instrumental variable strategy that exploits the variation in proximity to the Benin-Nigerian border, we find that a1standard deviation increase in ATR adherence has a 0.4 standard deviation positive impact on forest cover change. We study the impact of historically belonging to the ancient Kingdom of Dahomey, birthplace of the Vodun religion. Using the original boundaries as a spatial discontinuity, we find positive evidence of Dahomey affiliation on contemporary forest change. Lastly, we compare observed forest cover to counterfactual outcomes by simulating the absence of ATR beliefs across the population.

Title: More than Just Carbon: the Socioeconomic Impact of Large-scale Tree Planting

Authors: Jeffrey Pagela, Lorenzo Sileci

Presenter: Lorenzo Sileci, Department of Geography and Environment, London School of Economics and Political Science

Abstract: One potential nature-based solution to jointly address poverty and environmental concerns is through tree planting. In this paper, we focus on the National Greening Program (NGP) in the Philippines, which planted hundreds of thousands of hectares of trees through 82,916 localized projects, and directly or indirectly generated hundreds of thousands of jobs. We leverage the staggered roll-out of the NGP with a dynamic differences-in-differences identification strategy to quantify the impact tree planting has on socioeconomic outcomes. We find that the program led to a significant and sizable reduction in poverty, mirrored by a similar increase in remotely sensed economic activity. The NGP induced broader structural changes as treated municipalities experienced reductions in the percentage of individuals working in the agriculture sector and increases in the percentage of individuals working in unskilled manual labor and services. The results provide evidence towards the current global enthusiasm around tree planting as a nature-based solution that could potentially align the policy goals of climate mitigation and poverty reduction.

Session 4B - Risk and uncertainty

Room: Saltmarsh Dining Room

Title: Introducing dynamics into coastal management: Sharks-human interactions Israel as a case study

Authors: Shiri Zemah-Shamira, Inbar Schwartz Belkinb, Ziv Zemah-Shamir, Michelle E. Portmanb

Presenter: Ziv Zemah-Shamir, Morris Kahn Marine Research Station, University of Haifa; Department of Marine Biology, Leon H. Charney School of Marine Sciences, University of Haifa

Abstract: Area-based management tools (ABMTs), including marine protected areas (MPAs) and time-area closures, are accepted and effective forms of management utilized to mitigate local human impacts on marine species and ecosystems. In the Hadera stream Estuary, Israel, two vulnerable shark species aggregate every winter in a highly active coastal area frequented by snorkelers, SCUBA divers, recreational fishers, and motorized and non-motorized water sports enthusiasts. The interaction between humans and sharks raises concerns for both the safety of individuals near these apex predators and the welfare of the sharks themselves. The Hadera stream estuary, affected by heated water discharged from the nearby Hadera power plant, experiences significant anthropogenic impacts, leading the Israeli Nature and Parks Authority to disqualify it from being designated as a marine protected area (MPA). Consequently, an alternative ABMT is necessary to manage human activities around the sharks. Employing the Delphi technique with relevant experts identified activities posing the greatest threats in human-shark interactions, thus warranting regulation as our proposal fora time-area closure that aligns with the seasonal appearance of the sharks, thereby serving the best interests of all users by implementing restrictions only during specific times. Our research findings provide valuable insights for potential regulators in the area, on which solutions receive the most support from relevant stakeholders and enforcement agencies. This study marks the initial stride in promoting area-based conservation in Israel, which aims to dynamically balance human recreational needs and shark conservation. The study underscores how the utilization of specific technological advancements in shark tracking can advance the ecosystem-based approach by enabling tailored management practices accounting for conservation and recreational uses.

Title: The Behavioral Economics of Extreme Event Attribution

Authors: Florian Diekert, Timo Goeschl, Christian Konig-Kersting

Presenter: Timo Goeschl, Alfred-Weber-Institute of Economics and Heidelberg Center for the Environment, Heidelberg University

Abstract: Can Attribution Science, a method for quantifying–ex post–humanity’s contribution to adverse climatic events, induce pro-environmental behavioral change? We conduct a conceptual test of this question by studying, in an online experiment with 3,031participants, whether backwards-looking attribution affects future decisions, even when seemingly uninformative to a consequentialist decision-maker. By design, adverse events can arise as a result of participants’ pursuit of higher payoffs (anthropogenic cause) or as a result of chance (natural cause). Treatments vary whether adverse events are causally attributable and whether attribution can be acquired at cost. We find that ex-post attributability is behaviorally relevant: Attribution to an anthropogenic cause reduces future anthropogenic stress and leads to fewer adverse events compared to no attributability and compared to attribution to a natural cause. Average willingness-to-pay for ex-post attribution is positive. The conjecture that Attribution Science can be behaviorally impactful and socially valuable has empirical merit.

Title: Not Just Knocking on Wood: The Short- and Long-Term Pricing of Deforestation Risk on Global Financial Markets

Authors: Marc Bohnet, Philip Fliegel, Tycho Tax

Presenter: Marc Bohnet, Humboldt Universitat zu Berlin

Abstract: Increasing attention is being devoted towards measuring biodiversity risks of companies to better understand how biodiversity is priced on financial markets. Against this backdrop, we introduce a new company-specific Corporate Deforestation Exposure (CDE) metric that zooms in on the broad notion of biodiversity risk. We use the CDE metric to conduct long-term asset pricing analyses of a Brown Minus Green (BMG) deforestation risk portfolio and a short-term event study of the EU Deforestation Regulation (EUDR). We find that the BMG deforestation risk portfolio does not pay a deforestation risk premium in the long term. In the short term, however, we show that companies with high deforestation transition risk exhibit significant negative abnormal returns after the trilogue agreement of the EUDR. We ensure that our findings do not merely pick up climate or overall biodiversity risk-related pricing. Our findings are relevant for all stakeholders interested in assessing deforestation risks.

Title: Accounting for risk in species conservation programmes

Authors: Gerling, C., Bartczak, A., Hanley, N.

Presenter: Charlotte Gerling, Environmental Economics, Brandenburg University of Technology Cottbus-Senftenberg

Abstract: Environmental policy outcomes are often uncertain, and choosing the socially-preferred policy requires an understanding of how people value such policies. Uncertainty is increasingly incorporated in choice experiments. However, this research often assumes behaviour in line with expected utility theory despite evidence that respondents care about the direction and magnitude of risk. Here, we assess preferences for uncertain environmental policies that differ in terms of the direction and magnitude of risk for the case of conserving the Iberian lynx. We assess respondents’ risk aversion, loss aversion and probability sensitivity using lottery questions and use this to classify respondents in a latent class model (LCM). In addition, we examine whether a simpler LCM based only on risk aversion yields similar conclusions. We find that lottery choices are largely in line with prospect theory. The LCM based on the full set of risk parameters classifies respondents based on their focus on upside and downside uncertainty. Conversely, the simpler LCM leads to very different results. In conclusion, with careful survey design, we find evidence that respondents are able to make choices regarding complex and uncertain policies, and ignoring aspects of respondents’ risk preferences may limit our understanding of the utility received from uncertain policies.

Session 4C - Marine and Fisheries 2

Room:  Keynes Seminar Room 2A

Title: Re-assessing the health of the global oceans according to general population preferences

Authors: Simon Disque, Bjorn Bosa, Moritz Drupp

Presenter: Simon Disque, Department of Economics, University of Hamburg

Abstract: The global oceans provide essential services to humans. To inform policymakers and the public about their health, the Ocean Health Index (OHI) tracks and aggregates performance across ten key indicators, using a simple arithmetic mean. This aggregation implies that all policy goals are equally important and, crucially, perfectly substitute each other. We test these key normative assumptions empirically, conducting a large-scale online experiment with more than 3,000 participants from 7 major coastal countries. Our findings reject the current aggregation assumptions of the OHI: A majority of respondents consider the OHI goals to be complements instead of perfect substitutes, and we find a large heterogeneity in the perceived importance of individual goals. Using preference-adjusted scores we illustrate that both country scores and relative rankings often change profoundly. Overall, our re-assessment reveals a less healthy global human-ocean system than currently portrayed by the OHI.

Title: Promoting compliance by subsidies in a size-structured open-access fishery

Authors: Florian K Diekert

Presenter: Florian K Diekert, Faculty of Business and Economics and Centre for Climate Resilience, University of Augsburg

Abstract: Managing natural resources by enforcing output quotas or by installing property rights is costly, challenging, and requires strong state capacity. In many developing economies, the only formal policies to avert the tragedy of the commons are input regulations. Consequently, compliance with input controls is a key concern for policy makers. This paper studies subsidies for nets with legal mesh size as a tool to promote compliance with gear regulations in an open-access fishery. I develop a stylized size-structured model to show when a subsidy improves outcomes despite encouraging entry.

Title: Fisheries Management from a Fisherman’s Perspective

Authors: Martin F. Quaas, Max T. Stoeven

Presenter: Martin F. Quaas, University of Leipzig

Abstract: The economics of overfishing has been largely understood since long, and proposals for economically more efficient management have been made. In particular, individual transferable quotas, also called catch shares, have been identified as a way towards greatly increasing efficiency and biological sustainability of fisheries. Yet, the uptake of catch shares as the primary form of rights-based fishery management has been limited and slowing down in recent years and, strikingly, the problem of overfishing has been increasing rather than going down in the past decades. In this paper we develop a theory to analyze fisheries management from a fisherman’s perspective. We study the preferred quota management from the fisherman’s perspective and find that the catches are strictly higher than the more efficient, rent-maximizing management. We further compare the welfare that a fisherman derives from (i) an efficiently managed fishery and (ii) a fishery under (regulated) open access. As overall efficiency is higher in a well-managed fishery, in principle it could Pareto-dominate the open-access fishery. In practice, however, the fisherman may be better off in the fishery under (regulated) open access, and even full grandfathering of resource-use rights does not guarantee a strict Pareto improvement.

Title: Can Demand-Side Interventions Rebuild Global Fisheries?

Authors: Anouch Missirian, Olivier Deschenes, Christopher Costello, Gavin McDonald, and Michael C. Melnychuk

Presenter: Anouch Missirian, Toulouse School of Economics, University of Toulouse Capitole

Abstract: Despite recent improvements in the ecological status of wild-capture fisheries, a significant share (33%) of global marine stocks remains overexploited. While top-down management has been shown to work in many settings, there is growing interest in demand-side interventions, which work through consumer-originated price signals to incentivize reduced fishing pressure. The effectiveness of demand-side interventions would rely, in part, on a large enough supply elasticity of fisheries, though this crucial statistic is notoriously difficult to estimate and remains elusive in the literature. Using plausibly exogenous variation in fish prices and extensive data on the world’s fisheries, we derive an empirical approach to estimate this elasticity using an instrumental variables estimator. We find it is very low–similar to that observed in comparable sectors. This suggests that even if prices did respond to demand-side interventions, the supply response would be small. To determine whether the ensuing supply response would have meaningful ecological consequences, we combine a bioeconomic model of fisheries with a global model of supply and demand for seafood calibrated with our estimates. We find that even interventions that lead to dramatic demand shifts are unlikely to achieve more than marginal improvements to fisheries status. In contrast, we find that supply-side policies (such as well-enforced fishing quotas), even imperfectly designed or implemented, can result in substantial recovery.

Session 4D - Policy trade-offs

Room: Keynes Lecture Theatre

Title: Polarised preferences towards payment schemes for carbon capture, biodiversity preservation, and recreation in forests: A cross-country analysis

Authors: Oliver Frings, Jens Abildtrup, Antonello Lobianco, David W. Shanafelt, and Harald Vacik

Presenter: Oliver Frings, University of Lorraine, University of Strasbourg; Institute of Silviculture, Department of Forest and Soil Sciences, University of Natural Resources and life Sciences

Abstract: This study explores consumer preferences and willingness to pay (WTP) for forest ecosystem services (FES) in Austria and France, using a survey incorporating a discrete choice experiment. We integrate classical theory-driven choice models with machine learning techniques to analyse the data. Results reveal a divide in both countries. One significantly larger group displays strong preferences and willingness to pay for FES, labelled ’payments for ecosystem services (PES) supporting’. Key indicators for membership in this group include a belief in and concern about anthropogenic climate change, frequent visits to forests, youth, and a well-informed stance on forest issues. Conversely, residing in areas with high right-wing political support, particularly in Austria, relates to belonging to a second group, labelled ’PES reluctant’. Machine learning models confirm the influence of local political climate and climate change opinions on FES and PES preferences, and also support the existence of two distinct classes in the populations of both countries. In France, forest ownership relates with PES support, while in Austria, individuals with medium incomes show higher PES support compared to those with low or high incomes. To effectively establish novel PES schemes, we recommend targeting young individuals and residents of municipalities with low shares of right-wing voters. Addressing political diversity is crucial to mitigate the influence of far-right PES reluctance. Policies should be income-sensitive, particularly in Austria, where support among medium income earners should be bolstered, and strategies to engage low and high income groups developed. Overall, we recommend policy makers to be more ambitious in promoting environmental policies that foster forest carbon sequestration and biodiversity, as the majority of the population expresses high demand and WTP for both ecosystem services.

Title: Where to put things, for now? Optimal within-season, annual, and permanent conservation actions for migratory species

Authors: Heidi J. Albers, Kailin Kroetz, Katherine Lee, Erik Nelson, Stephen Newbold

Presenter: Heidi J. Albers, University of Wyoming

Abstract: Migratory species’ spatial-temporal behavior presents unique challenges and opportunities for conservation. While conservation of an entire migratory path may be prohibitively expensive, conservation actions that increase the functional connectivity of a migratory path can improve species outcomes. Yet, improving habitat for species along their migratory route is complicated by uncertainty about precisely when and where species will require that habitat. Because migratory species only require permeable and connected habitat in specific locations for portions of their annual migratory cycle, temporary (“pop-up”) conservation actions can provide functionally connected habitat for species along their spatial-temporal migration path. We solve an annual stochastic dynamic programming problem with randomness in species’ movements to identify optimal locations and timing for such conservation activities, including permanent, annual, and within-seasonal actions. Near real-time information about the timing and location of the migratory species enables decisions about the right place and the right time to provide temporary conservation. Using stylized examples across terrestrial, aerial, and marine migratory species, we demonstrate how the characteristics of the species – including species’ fidelity to sites and timing – and characteristics of the setting – including conservation cost functions – influence the optimal choices of conservation actions across time and space.

Title: Managing forests for carbon sequestration and biodiversity protection: when are the objectives consonant?

Authors: David Simpson

Presenter: David Simpson, American University, School of International Service

Abstract: Reforestation might help resolve the two most pressing global environmental challenges:  climate change and biodiversity loss.  It is, then, tempting to regard replanting forests as a win-win proposition.  This view is complicated, however, by the prospect that forests might instead be harvested on finite rotations and substantial fractions of the carbon their trees stored while living sequestered in long-term storage. In this paper a simple Faustmann-type model augmented to incorporate ecosystem service values is developed and solved to illustrate conditions under which it would not be optimal to preserve replanted forests indefinitely despite the other valuable ecosystem services they may provide.  The model is then applied to data borrowed from Vincent et al. (2016) on forests and ecosystem services in a region of Malaysia.  Based on ecosystem service values estimated for Perak State in Malaysia, the opportunity cost of forgoing conversion of forest land to agricultural use there, and recent estimates of the value of carbon reductions, ecosystem service values would have to be almost two orders of magnitude greater than estimated to justify replanting forests and maintaining them in perpetuity rather than harvesting them periodically and storing the carbon they contain. These findings are far from conclusive.  We need better, more comprehensive, and location-specific estimates of forest ecosystem service values.  Daunting challenges must be resolved if trading in forest carbon markets is to realize its potential.  As these matters are resolved and solutions come into better focus, however, it may be important to acknowledge that forest carbon sequestration and biodiversity protection objectives may not necessarily be consonant.

Title: Economic incentives for woodland creation: modelling the impacts on biodiversity

Authors: Mary Nthambi, Katherine Simpson, Tom Bradfer-Lawrence, Andrew Dobson, Tom Finch, Elisa Fuentes-Montemayor, Kirsty Park, Kevin Watts, Nick Hanley

Presenter: Nick Hanley, University of Glasgow

Abstract: This paper models the effects of economic incentives on woodland planting on UK farmland, and the spatially-varying impacts on three avian species. The economic model uses an agent-based approach: “farmers” in each parcel compare economic returns from keeping their current agricultural land use with the economic incentive for woodland planting. An ecological model then predicts the effects of both parcel-level and local landscape-level woodland cover on species distributions. We compare results from two case study areas which vary in terms of the spatial correlation of opportunity costs and ecological potential. As the per-hectare value of the subsidy for woodland planting is increased, the values of our biodiversity indicator increase, but at rates which vary by case study area and by species. The cost-effectiveness of the economic instrument varies according to the sign of the spatial correlation between opportunity costs and ecological potential.

Session 4E - Forestry Modelling

Room: Keynes seminar Room 1

Title: Deployment of genetic variability in treescapes: insights from a bioeconomic model

Authors: Ewan McTaggart, David Edwards, Stephen Cavers, Julia Touza-Montero, Adam Kleczkowski

Presenter: Ewan McTaggart, Department of Mathematics & Statistics, University of Strathclyde

Abstract: The UK government aims for net zero greenhouse gas emissions by 2050, with carbon capture via tree planting at the centre of their strategy. Generating 30,000 hectares of new woodland annually from May 2024 will require the continued resilience of forests. Trees have substantial adaptive capacity, harnessing high levels of genetic variation and plasticity to handle environmental pressures. However, with a changing climate and emerging pests and disease threats, trees may not adapt quickly enough to maintain their provision of key ecosystem services. Tools are therefore needed to help managers and policymakers to maintain forest resilience. Forest models that account for tree pest and disease spread have focused on single-host, single-pest combinations, overlooking intraspecific variation in host susceptibility. Further, the role of tree intraspecific genetic variability remains unexplored through a forest economic lens. To address this gap, we develop a bioeconomic model that explores the long-term consequences of various distributions of genetic variability. Specifically, we extend an optimal rotation model to include within-stand intraspecific variation in growth rates and disease response. An epidemiological model with variation in host susceptibility models the feedback loops between genetic variability and disease dynamics. We perform a net present value (NPV) analysis where changes in the genetic composition of the planted forest result in trade-offs between the costs of deployment of novel traits and potential gains from protection against pest and disease threats. We explore the effect of planting decisions on the optimal rotation length and net present value through a sensitivity analysis of the shape and level of variability in the genetic distribution and disease dynamics. The results show that increased genetic variability or disease risk reduced optimal rotation length and NPV. The stand’s mean growth rate and resistance level had a non-monotonic relationship with optimal rotation and net present value. Planting slower-growing and more resistant trees can be optimal, depending on disease risk. Our results suggest that the incentive to plant high levels of genetic variability depends on whether the suppressive effects on pest or disease dynamics outweigh the economic losses from harvesting trees at mixed maturity levels. Furthermore, our model highlights the impact of selection on the evolution of genetic diversity. Our study provides a framework to help design appropriate management strategies in the presence of disease, ensuring the long-term viability of forests.

Title: Multi-objective management of naturally regenerating beech forests – An ecological-economic optimization approach

Authors: Markus E. Schorn, Martin F. Quaas, Hanna Schenk, Christian Wirth, Nadja Rüger

Presenter: Markus Schorn, German Centre for Integrative Biodiversity Research; Department of Economics, Institute of Empirical Economic Research, Leipzig University

Abstract: How to meet economic objectives of timber harvesting while maintaining the functioning of diverse forest ecosystems? Answering this question requires ecological-economic models that can be easily applied and generalized for uneven-aged mixed-species forests. Here, we develop an ecological-economic optimization model, which integrates a state-of-the-art demographic forest model with a continuous cover forestry harvesting model to optimize efficient and sustainable timber harvesting. As a proof-of-concept, we apply the model to a beech-dominated forest in the Hainich, Germany, with the goal of optimizing multiple objectives such as timber yield and the biodiversity value of the forest. The ecological module is the Perfect Plasticity Approximation (PPA) demographic forest model that simulates forest dynamics based on individual tree growth and survival rates in the canopy and understory layers, respectively, as well as recruitment rates. We used repeated forest inventory data from a 28-ha forest plot to quantify these demographic rates and validated the predictions of the ecological module against the structure of old-growth beech forests in Europe. The economic module includes constant marginal harvesting costs and timber prices, and the number of retained habitat trees (>70 cm diameter) as an indicator for the biodiversity value of the forest. The forest model delivered reasonable predictions of structural attributes of unmanaged old-growth beech forests. When only timber yield was maximized, trees were harvested when they reached 55 cm in diameter. This is similar to current management practices in beech forests. We found a steep, monotonic trade-off between maximizing timber harvest and biodiversity value with about 2.5% of the maximum timber harvest being lost with the retention of each additionally retained habitat tree. We established a generic ecological-economic modeling framework that reliably represents forest dynamics as well as optimal forest management. The framework can be extended to mixed-species forests and support forest management for diverse ecosystem services.

Title: Optimizing high-dimensional forestry for wood production and carbon sinks

Authors: Olli Tahvonen, Antti Suominen, Vesa-Pekka Parkattia, Pekka Malo

Presenter: Olli Tahvonen, Department of Economics, Department of Forest Sciences, University of Helsinki

Abstract: Our model for optimizing stand-level wood production and carbon sinks includes individual-tree models for forest growth, an advanced model for soil carbon, detailed wood production economy, and an intertemporal objective for the value of wood production and carbon sinks/emissions. Carbon stocks include aboveground biomass and carbon in forest soil and in wood products. Optimization of the management regime, rotations and thinning timing, and type and intensity are carried out by reinforcement learning. Including the social price of carbon causes a regime switch from continuous cover forestry to clear[1]cuts, postponed lighter thinning, and a longer rotation, and with a high carbon price, to solutions with pure clear-cuts or solutions utilizing stands as pure carbon stocks. Carbon price has profound effects on stand values, and the bare land value may well exceed the value before a clear-cut. The total average carbon stock is maximized with harvest and a long rotation instead of “no harvesting”. Bioenergy, carbon capture, and storage (BECCS) always increases the value of wood production but not necessarily the value of carbon sinks. With BECCS, increasing carbon stocks in trees and forest soil remains optimal.

Title: Assessing economic benefits and costs of carbon sinks in boreal rotation forestry

Authors: Vesa-Pekka Parkatti, Antti Suominen, Olli Tahvonen, Pekka Malo

Presenter: Vesa-Pekka Parkatti, Department of Forest Sciences, University of Helsinki

Abstract: We study the optimal enhancement of forest carbon sinks via forest management changes in boreal even-aged Scots pine (Pinus sylvestris) forests. The economic–ecological stand-level optimization model integrates a statistical–empirical individual-tree growth model with a comprehensive model for carbon in living trees, wood products, and soil. We use reinforcement learning to optimize for rotation length, thinning timing, and thinning intensity. Carbon dioxide (CO2) pricing has a notable effect on the optimal solutions and on the corresponding CO2 flows and carbon stocks. Under a 1% interest rate, increasing the CO2 price from zero to €100 increases the discounted carbon sink by 83% and the total steady-state carbon stock by 122%. Increasing the CO2 price decreases the economic significance of thinning, and, with a high enough CO2 price, the stand is harvested only with clear-cuts, which are further postponed by CO2 price increases. Decreasing stand volume or total C stock cannot be taken as a sign of an overly mature stand. Depending on the CO2 price and interest rate, the economic benefit–cost ratio of additional carbon sinks via forest management changes varies between 1.9 and 3.7. Overall, the results reveal a high potential to increase the role of boreal managed forests in climate change mitigation.

Session 5A - Forests

Room: Saltmarsh Reception Room

Title: Forest Management Practices and Safety Preferences: Do Households Welcome Prescribed Burning?

Authors: Maria Teresa Gonzalez Valencia, David J. Maddison, Allan Beltrán

Presenter: Maria Teresa Gonzalez Valencia, Department of Economics, University of Birmingham

Abstract: We employ the hedonic price method to identify Western Australian households’ preferences for prescribed burning. Using a property fixed-effects model to account for time-invariant attributes whilst simultaneously controlling for past wildfires prescribed burning significantly increases property prices. This is consistent with the perceived hazard-reduction benefits of prescribed burning outweighing any concern over uncertain ecological impacts. These beneficial effects are however, only temporary. Additionally, our findings suggest that households base their decisions more on the number of prescribed fires than the area burnt.

Title: Effect of rural electrification on land use and forests in developing countries: Evidence from India

Authors: Julia Girard

Presenter: Julia Girard, Centre for Environmental Economics of Montpellier (CEE-M)

Abstract: Deforestation, ecosystem degradation and land conversion are widespread phenomena in developing countries, with important consequences on the environment (biodiversity, climate) and for local populations. Agricultural expansion and fuelwood harvests are among the main drivers of these phenomena. Could rural electrification, through its effect on agriculture and energy source choices, have an impact on land-use change and forest cover? Theoretically, the effects of electrification on land use and forests are ambiguous, and very few studies have investigated this issue. To bring more evidence on this question, we study the effects of the RGGVY electrification program that was deployed in India between 2005 and 2014 in close to 300,000 villages. We found that this program benefited agricultural production, but we find no evidence that the program had an effect on forests, even when focusing on districts relying the most on fuelwood for cooking. We do observe some positive impact of electrification on forests in states most affected by forest cover loss, in particular in states where tree cover loss is linked to agricultural activities, but this result is not robust to some of our robustness tests, and further investigation is needed to confirm this finding.

Title: Artisanal Mining Triggers Deforestation in the Democratic Republic of Congo

Authors: Malte Ladewig, Robert Masolele, Colas Chervièr, Arild Angelsen

Presenter: Malte Ladewig, School of Economics and Business, Norwegian University of Life Sciences (NMBU)

Abstract: The discovery of valuable minerals can stimulate extensive migration into remote forest areas. Despite the widespread practice of artisanal mining in the Democratic Republic of Congo, its role in the ongoing deforestation in the Congo Basin has not received adequate attention. We address this research gap by investigating how artisanal mining triggers deforestation in the mineral-abundant eastern provinces of the country. Our analysis uses Difference-in-Differences estimation and new data to show elevated deforestation, spreading at least 5 km from mining sites. Within this distance, the onset of mining causes the loss of an additional 4.5 percentage points of initial forest area after 10 years. In total, the indirect forest loss of mining through the expansion of other land uses is 25 times larger than the direct loss to mining. Most of this loss is caused by increased farming activities around mines, followed by forest cleared for settlement expansion. Especially the indirect effects reveal a much larger role played by artisanal mining in deforestation dynamics than reflected in its direct contributions.

Title: Carbon leakage from land-based climate change mitigation measures

Authors: Sabrina Eisenbarth, Brett Day, Alla Golub, Uris Baldos

Presenter: Sabrina Eisenbarth, University of St. Gallen

Abstract: Afforestation and the transition to renewable energy are crucial in supporting countries' efforts towards net-zero emissions. We use a spatially explicit environment economy model for the UK to analyse how the UK could achieve net-zero compatible afforestation and renewable energy targets at minimum cost to UK society. Our preliminary results suggest that the expansion of forests, bioenergy crops, wind farms, and solar farms would replace arable and pastureland, reducing UK agricultural output. Linking the UK model to a general equilibrium model of international trade reveals that this UK land use change triggers agricultural expansion and land use change abroad. Deforestation outside the UK is roughly one-third of the newly afforested area in the UK. The increase in greenhouse gas emissions from land-use change, agriculture, burning of fossil fuels and transport outside the UK is substantial and seriously undermines UK carbon sequestration efforts.

Session 5B - Choice Experiments 2

Room: Saltmarsh Dining Room

Title: Estimating Willingness to Pay for Freshwater Ecosystem Services in Sri Lanka: A Stated Preference Approach

Authors: Menuka Udugama

Presenter: Menuka Udugama, School of Agriculture, Policy and Development,  University of Reading

Abstract: Freshwater ecosystems, in the form of natural pools offer a wide range of services, covering socio-economic, physical, mental, spiritual, cultural, and environmental dimensions. Despite their potential, several advantages offered by these pools has not been fully realized by the public, which has led to a limited attention on the conservation of these natural pools. Addressing this gap, this study was conducted to investigate the user preferences for sustainable enhancement of recreational values in natural pools and their immediate environment. A total of 320 local users of natural pools located in Rangala and Nillambe were recruited as the sample and data were gathered using a Discrete Choice Experiment (DCE). The majority of respondents (89%) agreed with the significance of enhancing sustainable recreational services, with their inclination towards external support was in favour of government support (79%), followed by community-based organization support (12%). The Marginal Willingness to Pay (MWTP) for the improvement of recreational values of natural pools was estimated using a Conditional Logit Model. Outcomes of the WTP disclosed a clear preference hierarchy for various enhancements and contributions. Raising the community income by 20% and the option of 14 recreational activities were both highly valued, while the economic benefit of 20% increased income was particularly significant. Environmental damage reduction from 20% and 50% were also positively regarded. There was a clear dislike for fewer 11 activities, higher personal costs, and small 10% income boosts. Conclusively, the study suggested that efforts to upgrade these natural pools should prioritize income generation, broadening of recreational activities and environmental conservation, in line with respondents’ inclinations.

Title: Incorporating spatial complexity and variability into stated choice experiments for biodiversity policy support

Authors: Tomas Badura, Marije Schaafsma

Presenter: Tomas Badura, Environmental Economics, Institute for Environmental Studies (IVM), VU Amsterdam, Global Change Research Institute of the Czech Academy of Sciences

Abstract: Understanding the spatial distribution of preferences for both use and non-use values of biodiversity is crucial for designing environmental policies that maximize social value. Yet, the integration of spatial factors that influence these preferences and estimated values in stated preference research remains a formidable challenge. This includes designing studies that not only control for and accurately represent multiple spatial factors simultaneously, based on the actual context rather than abstract hypothetical landscapes, but also yield insights that are broadly generalizable. This paper introduces a novel approach designed to address these issues. It allows for the creation of numerous, individually tailored choice scenarios that exhibit a high degree of variation of spatial factors among respondents. This increases the generalizability and accuracy of results while enhancing the realism of the choice scenarios to ensure the validity of valuation scenario. Specifically, this study examines how spatial factors—such as the location of environmental changes and preferences for enhancing existing sites versus creating new ones—vary across different areas. The approach presented here offers one of the most comprehensive and generalizable examinations of spatial factors in stated preference research to date, with results that are highly relevant for national policy. This includes implications for the (hopefully to be adopted) EU Nature Restoration Law, the EU Biodiversity Strategy, and the broader implementation of the Global Biodiversity Framework.

Title: Out of context? Contextual embedding and sensitivity to scope when valuing biodiversity improvements based on the Biodiversity Intactness Index

Authors: Kennet Uggeldahl, Jette Bredahl Jacobsen, Thomas Lundhede, Søren Bøye Olsen

Presenter: Kennet Uggeldahl, Department of Food and Resource Economics, University of Copenhagen

Abstract: One of the policy solutions suggested for halting the unprecedented decline in biodiversity has been to explicitly include its value in decision-making. However, biodiversity is a complex concept, hard to describe and measure with recognized metrics. The Biodiversity Intactness Index has been developed by biologists, and may have advantages over the metrics previously used to value biodiversity. We use this index in a stated preference valuation study, and test whether our results pass a standard validity check. Furthermore, we test how respondent’s perceptions and preferences for biodiversity improvements are affected by the geographical context in which improvements are presented. We find that the estimated values of biodiversity improvements using the index are sensitive to scope, but that the geographical context at which the biodiversity improvements are presented impact welfare estimates and scope sensitivity. Welfare estimates are higher when improvements are presented in a local context, compared to when presented in a national context, and fall in between the two when presented both in the local and the national context simultaneously. We argue that this result is due to contextual embedding, i.e. that respondents’ perception of improvement and hence their WTP is influenced by the context into which the good is embedded. This sensitivity to the geographic context causes a problem for the generalizability of the results, and the use in e.g. benefits transfer, and highlights that welfare estimates used to inform policy need to be valued in the geographical context relevant for the policy.

Title:  Preferences for biodiversity-promoting private garden designs: A basket-based choice approach

Authors: Tobias Börgera, Danny Campbellb, Jürgen Meyerhoffa, Malte Welling

Presenter: Malte Welling, Institute for Ecological Economic Research (IÖW)

Abstract: This study introduces the basket-based choice experiment (BBCE) as suggested by Caputo and Lusk (2022) into the field of environmental economics. The application is a survey to assess garden owners’ preferences for installing of elements conducive to biodiversity conservation in private gardens. This application of the BBCE adds two new features to this approach. First, an experimental design is used to provide context variables for each basket-based choice to assess the extent to which policy levers set by local councils can affect how garden owners design their gardens. Second, the econometric model to analyse the resulting basket-based choice data is augmented by a latent class structure to accommodate the empirical finding that an overproportional share of respondents never chose to add any element to their garden (i.e., choose an empty basket). Results show that the policy instruments have mixed effects on the element-specific choice probabilities, with financial support for new garden elementa exhibiting the strongest effect on demand. Furthermore, it is demonstrated how prediction can be used to assess the uptake of biodiversity friendly garden elements as a function of policy instruments characteristics.

Session 5C-Agriculture and Biodiversity

Room:  Keynes Seminar Room 2A

Title: Who should control the implementation of measures for ecosystem service provision in agricultural landscapes? Insights from a choice experiment for German orchards

Authors: Henrique Manhique, Frank Wätzold

Presenter: Henrique Manhique, Chair of Environmental Economics, Brandenburg University of Technology

Abstract: The sustained provision of ecosystem services requires appropriate governance structures that ensure an effective enforcement of rules and regulations related to the provision of ecosystem services. Compliance enforcement is relevant as it gives assurances to buyers of the services that the ecosystem services provided are in accordance with rules and regulations. A key challenge, however, regarding the enforcement of compliance is the question of which type of organisation should be in charge of enforcing the implementation of ecosystem services measures. This is important given that different organisations may be suitable to different extents and may thus be valued differently. We empirically investigate buyers’ preferences for organisations responsible for controlling the implementation of measures for ecosystem services provision in agricultural landscapes. In our case study, we employ a discrete choice experiment survey to elicit buyers’ preferences for different measures (flower strips, hedgerows, and a combination flower strips + hedgerows) aimed at ecosystem services provision in apple orchards in Germany. In addition to the measures, the survey also included four organisations that would be in charge of control, namely, a state agency “staatliche Behörde”, a farmers’ association “Bauernverband”, a conservation NGO “Naturschutzverband”, and a representative body “Gremium” made up of representatives from all relevant social actors (consumer protection agencies “Verbraucherverbände”, state agencies, farmers association, conservation NGO). We find that buyers prefer a conservation NGO as the controlling organisation, followed by a representative body, a farmers’ association, and a state agency – as the least preferred. In relation to ecosystem services measures, the results show that buyers have highest marginal utility for flower strips + hedgerows and lowest marginal utility for hedgerows.

Title: Guilty or scapegoat? Land consolidation and the hedgerow decline

Authors: Valentin Cocco, Raja Chakir and Lauriane Mouysset

Presenter: Valentin Cocco, University of Paris-Saclay, Centre International de Recherche sur l’Environnement et le Développement

Abstract: Land consolidation is a standard policy tool to reduce land fragmentation through the spatial redistribution of property rights; however, the risk of adverse effects on the landscape raises concerns about its environmental sustainability. This study investigates the landscape impacts of consolidation on the hedgerow network of Lower Normandy, France. Implementing a staggered difference-in-differences strategy on a longitudinal survey (1972-2010), we show that consolidation led to a significant reduction in hedgerow density of -14.3m/ha (standard error: 2.33), accounting for 13.7% of the overall decline observed in consolidated areas. Our results also suggest a diminishing impact over time of consolidation and time since consolidation, an increasing impact with higher initial hedgerow density, no spillover effect, and a negative impact on network connectivity. Our findings confirm that land consolidation has significantly contributed to the decline of hedgerows, but they challenge prevailing beliefs about its share of responsibility among other factors of landscape changes.

Title: Environmental policies have globally Improved cropland soil condition

Authors: Guyo Dureti; Hadi; David Wuepper

Presenter: Guyo Dureti, Land Economics Group, University of Bonn

Abstract: Cropland degradation is a major threat to agricultural production and the environment worldwide. Here, we use global satellite remote sensing data (83 million measurements of cropland condition from 2001 to 2019) and two complementary quasi-experimental impact evaluation methods (difference in discontinuities and difference in differences) to assess the impact of public agri-environmental policies on the state of the world’s cropland. Our estimates imply that on average these policies have led to an improvement of at least 1.5 - 2% and possibly up to 6%. Delving into global heterogeneities at the country level, we estimate improvements ranging from zero to over 20%. This observed heterogeneity is explained by differences in countries’ institutional and governance characteristics and their policy budgets.

Title: Assessing the impact of natural land on farmland value in Southern Europe

Authors: Lea Nicita, Robert Mendelsohn

Presenter: Lea Nicita, University of Catania

Abstract: Agriculture, heavily reliant on nature's services, faces significant exposure to nature loss. Despite the substantial growth in agricultural crop production, indicators such as soil organic carbon and pollinator diversity have declined, indicating potential unsustainability. Urgent action is needed to adopt sustainable land management practices and conserve ecosystems to address these challenges and ensure agricultural sector resilience.

Natural and seminatural habitats provides a diverse array of ecosystem services crucial for agricultural sustainability. Forest areas, herbaceous vegetation, and wetlands contribute significantly to water flow regulation, flood protection, and erosion control and support populations of pollinators and pest predators.

In this study, we employ a hedonic approach to evaluate the contribution of forests, herbaceous vegetation, and wetlands' compositional heterogeneity to farmland value. Using farm-level data and land cover information at local and regional scales, we analyze the impact of natural land cover types on farmland value, considering farms specializing in crops and livestock. Abiotic factors such as temperature, precipitation, soil characteristics, and elevation are also incorporated into the analysis. Our findings contribute to understanding the complex interplay between land cover types, ecosystem services, and farmland value, providing insights for sustainable land management practices in agricultural landscapes.

Session 5D - Policy Impacts on Ecosystem Services

Room: Keynes Lecture Theatre

Title: Evaluation of Wetland Area Gains and Losses under the US Clean Water Act

Authors: Ville Inkinen, Jessica Coria, Joao Vaz, Yann Clough

Presenter: Ville Inkinen, LEEP Institute, Department of Economics, University of Exeter Business School

Abstract: Mitigating the impacts of economic development on biodiversity is an urgent global priority. Offsetting policies reconcile development and conservation objectives by allowing environmental losses in some locations, given that the losses are compensated with equivalent gains elsewhere. In this paper, we quantify net losses of wetland area under the US Clean Water Act compensatory mitigation program, which is the most extensive and longest-running environmental offsetting program in the world. A unique feature of the program is how most of the compensation is financed through a market mechanism where permittees purchase compensation credits that specialized firms have generated from wetland conservation activities. We measure wetland area gains at 400 compensation sites over 1995–2020 using high-resolution satellite imagery and land cover change data. Comparing realized compensation projects to planned but withdrawn projects in a difference-in-differences framework, we find that the majority of the gains would not have occurred without dedicated conservation activities. We also find that the market mechanism allocates the type and location of conservation activities according to the opportunity cost of land use. Nonetheless, the wetland area gains appear insufficient to compensate for the wetland area losses regulated within the program. This raises doubts about whether the program will achieve its environmental goals in the long term.

Title: Payments for Ecosystem Services Programs and Climate Change Adaptation in Agriculture

Authors: Youngho Kim

Presenter: Youngho Kim, Department of Agricultural and Resource Economics, University of Maryland

Abstract: Payments for ecosystem services (PES) programs can enhance resilience to extreme weather events by establishing natural infrastructure. I investigate the effectiveness of the Conservation Reserve Enhancement Program (CREP) in the United States in mitigating flooded crop losses through the restoration of riparian buffers and wetlands. By leveraging variation in the timing of the program’s introduction across counties, I find that CREP reduced the number of flooded crop acres by 39 percent and the extent of damage on those acres by 26 percent during the initial 11 years of program implementation. The flood mitigation benefits of CREP also generated financial spillover effects on the federal crop insurance program, saving $94 million in indemnity payouts that would have otherwise been paid to insured farmers. Two-thirds of these benefits resulted from reduced flood damage on cropland in production, while the remaining benefits were attributed to the removal of at-risk cropland from production. The magnitude of benefits varied spatially and temporally depending on the duration of program availability, the extent of program participation, and the adoption of alternative risk management strategies. Overall, these findings underscore the critical role of PES programs in facilitating nature-based solutions for climate change adaptation.

Title: A spatially explicit cost-benefit analysis of Environmental Land Management Schemes for pollination services

Authors: Daniel Leppert, Ashar Aftab, Riccardo Scarpa

Presenter: Daniel Leppert, Oxera Consulting LLP, Durham University Business School

Abstract: We combine a discrete choice experiment with a spatially explicit pollinator visitation model to produce a novel approach to cost-benefit analysis of environmental land management schemes aimed at promoting pollination services in agricultural landscapes. In a sample of ca 500 English farmers, we find that pollination services are generally not internalised as a benefit, even among farmers who grow pollinator-dependent crops. Our model of pollinator visits shows that across different spatial configuration of flower-rich ELM projects, both features of natural regeneration and planted flowering trees improve visitation rates by ca 3% to 10%. A spatial structure that achieves high connectivity between natural features does not have a significant effect however. Farmers may value the freedom to choose the placement of the ELM features as highly as £600 per year. As a result, paying farmers to improve connectivity along farm boundaries by coordinating with neighbours when creating the natural features does not achieve cost-effectiveness. Instead, we recommend that features are created in the form of narrow corridors along field edges or evenly distributed patches that pollinators can easily travel between.

Title: The Impact of Organic Farming on Productivity and Biodiversity: Evidence from a Natural Experiment

Authors: Sylvain Chabe-Ferret, Marine Coinon, Anouch Missirian, Francois Libois, Marta Pinzank Arnaud Reynaud, David Sheeren, Clelia Sirami, Eva Tene

Presenter: Sylvain Chabe-Ferret, Toulouse School of Economics, University of Toulouse Capitole

Abstract: Organic farming, which eschews the use of synthetic inputs, has been proposed as a viable alternative to feed the world without degrading the environment. Despite the growing importance of organic farming, there is to date no large-scale credible evidence on whether organic farming achieves this feat. In this paper, we provide the first large-scale estimates of the causal impact of organic farming on biodiversity and on yields using the large increase in areas under organic farming that happened in France after 2000 as a result of a massive increase in subsidies. Leveraging a rich dataset containing more that 400,000 observations on water quality, 500,000 observations on bird abundance and 160,000 observations of farmers’ practices, we find that yields decrease by 33% after conversion to organic farming, while bird abundance increases by 20%. We also find that organic farming decreases nitrate concentrations in rivers by 8%, but does not decrease phosphorus concentrations nor eutrophication and does not increase fish biodiversity. We interpret this result as suggesting that phosphorus is the limiting factor of eutrophication in French rivers.