Conservation Costs Drive Enrolment in Agglomeration Bonus Scheme

Abstract

Agglomeration bonus schemes have become important policy tools when the environmental benefit hinges on spatial coordination of conservation sites. We here analyse how spatial factors affect the uptake of an agglomeration payment scheme in a Swiss mountain region, which seeks to establish a network of conservation areas to conserve favourable conditions for biodiversity. We use a combination of spatially explicit farm census (44,279 parcels) and survey data in a spatially lagged explanatory variable model. In addition, we also consider the collaborative process in establishing the eligibility of parcels for receiving the bonus payment. We find that parcels that are more distant from the farm as well as those at steeper slopes are more likely to enter the scheme. This implies that conservation costs are an important driver of the farmers' decisions. The results remain robust when controlling for a wide range of parcel, farm and farmers' characteristics. The analysis also showed that the collaborative process increased the enrolment of parcels cultivated by larger farmers managing their land more intensively. We conclude that the collaborative process increased the weight given to biodiversity from connecting conservation sites in the planning process of the agglomeration bonus scheme.