Cost-effectiveness of buying land for conservation versus paying land-users for conservation measures – the case of preserving an oligotrophic lake in a Natura 2000 area in North Germany

Oliver Schöttker and Frank Wätzold

MPRA Paper from University Library of Munich, Germany

Abstract: Cost-effective implementation of measures to conserve biodiversity is often a major target of conservation organisations, and choosing the correct mode of governance can be important in this context. Nature conservation organisations can, in principle, choose between two distinct modes of governance to implement conservation activities: they can (1) buy desired areas of interest and implement conservation measures themselves (buy option), or (2) offer payments to landowners to incentivize them to voluntarily preserve or create habitat on their land (compensation option). In this paper we analyse the cost-effectiveness of these two modes of governance in a case study on a conservation project in a Natura 2000 area in Schleswig-Holstein, Germany. The actual costs of the buying option are compared with the potential costs of implementing the compensation option. We developed a costing framework to compare the costs of both options over time, given they generate the same ecological results on an identical project area. We find that the cost-effective solution depends, among other things, on the conservation timeframe considered and on cost components such as transaction costs, leasehold rent and land prices.

Keywords: agri-environment scheme; biodiversity; conservation payments; grassland; make-or-buy decision; mode of governance; payments for ecosystem services; conservation costs (search for similar items in EconPapers)
JEL-codes: Q15 Q24 Q57 Q58 R14 (search for similar items in EconPapers)
Date: 2017-08-06
New Economics Papers: this item is included in nep-agr, nep-env and nep-ppm
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https://mpra.ub.uni-muenchen.de/91981/9/MPRA_paper_91981.pdf revised version (application/pdf)

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