Individual versus group-level agglomeration bonuses to conserve biodiversity

François Bareille and Raphael Soubeyran

Journal of Environmental Economics and Management, 2025, vol. 133, issue C

Abstract: Agglomeration bonuses (ABs) are payments conditional on the contiguity of landowners’ conservation areas. We study whether differentiating the bonuses between internal (within-landholding) and external (between-landholdings) boundaries can improve biodiversity conservation. Using an ecological-economic model and game theory, our simulations on realistic landscapes consisting of several multi-plot landholdings reveal that such differentiation is key in determining AB cost-effectiveness. Undifferentiated ABs (where internal equal external bonuses) are the most cost-effective schemes when regulators’ budgets are low. Yet, when budgets increase, AB cost-effectiveness improves by increasingly prioritizing internal over external bonuses, until a budget threshold beyond which only internal bonuses remain. The complexity of compensation between plots belonging to different landowners largely explains these patterns. Given this complexity, the most cost-effective schemes are characterized by little or no cooperation between landowners. Regarding policy, we conclude that differentiated ABs are cost-effective schemes that should be part of the regulators’ toolbox.

Keywords: Agglomeration bonus; Biodiversity; Coalitions; Collective schemes; Cooperative management; Group incentives; Group-level schemes; Habitat conservation (search for similar items in EconPapers)
JEL-codes: C70 Q24 Q57 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:133:y:2025:i:c:s0095069625000774

DOI: 10.1016/j.jeem.2025.103193

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