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Spatially Uniform versus Spatially Heterogeneous Compensation Payments for Biodiversity-Enhancing Land-Use Measures

Environmental and Resource Economics volume 31, pages 73–93 (2005)Cite this article

Abstract

The importance of compensation payments for biodiversity-enhancing land-use measures has grown over the past decade, particularly in connection with agri-environmental policy. Given that both the costs and the benefits of biodiversity-enhancing land-use measures are subject to spatial variation, the criterion of cost-effectiveness calls for spatially heterogeneous compensation payments. However, when deciding whether to implement uniform or heterogeneous compensation payments, the regulator has to compare the disadvantage of uniform payments in terms of cost-effectiveness with the disadvantages of spatially heterogeneous payments. To help resolve this issue, this paper provides a simple ecological-economic model that allows the reduced cost-effectiveness associated with uniform payments for biodiversity-enhancing land-use measures to be assessed for different types of benefit and cost functions.

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Authors and Affiliations

  1. Department of E.E.E.S., Research Leipzig-Halle, UFZ Centre For Environmental, P.O. Box 500135, 04301, Leipzig, Germany

    Frank Wätzold & Martin Drechsler

Authors
  1. Frank Wätzold
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  2. Martin Drechsler
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Correspondence to Frank Wätzold.

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JEL classification: Q20

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Wätzold, F., Drechsler, M. Spatially Uniform versus Spatially Heterogeneous Compensation Payments for Biodiversity-Enhancing Land-Use Measures. Environ Resource Econ 31, 73–93 (2005). https://doi.org/10.1007/s10640-004-6979-6

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  • DOI: https://doi.org/10.1007/s10640-004-6979-6

Keywords

  • agri-environmental policy
  • biodiversity
  • compensation payments
  • conservation
  • cost-effectiveness
  • ecological-economic modelling
  • land use