Abstract
Lack of public funding and environmental deterioration are promoting the search for innovative mechanisms enabling to boost farmers’ provision of agri-environmental climate public goods. This work aims to contribute to the current debate by highlighting the role of innovative contractual solutions through a systematic review of more than 60 articles. The review analyses the potential of result-based and collective contracts as innovative solutions compared to action-based instruments, which are those currently most used. The design of innovative contracts and other mechanisms, e.g., auction and screening contracts, can reduce the policy failures due to asymmetric information. The paper emphasises the trade-off between an accurate design of agri-environmental schemes and the related administrative burden, highlighting the need for a better understanding of the role of mechanisms design into the policy cycle. Some new instruments were not analysed in the review, due to the scarcity of literature, and there is the need of more case studies providing information on the effectiveness of instruments when implemented in different contexts. We fill the gap in empirical evidence through a SWOT analysis that evaluates the effectiveness and acceptability of innovative instruments for policy purposes.
Highlights
Human pressure on the environment is rapidly increasing and causing an urgent need to improve environmental activities
The paper aims to answer the following research questions: “How can innovative contract solutions improve the effectiveness of the agri-environmental-climate public goods (AECPGs) provision under asymmetric information and avoid policy failures?”; “How can innovative information uptake mechanisms improve the effectiveness of the current payment methods?” this study aims to provide an analysis of strengths, weaknesses, opportunities, and threats of innovative contracts in comparison with the current action-based approach and to highlight the relations between new institutional arrangements and asymmetric information, contributing to reduce policy failures in the design of measures promoting AECPGs provision
The following section introduces the main findings related to the type of external environments influencing AECPGs provision (Sections 3.1–3.3), and describes the state of the art of innovative solutions and how they can contribute to overcome the problems related to information asymmetry (Section 3.4)
Summary
Human pressure on the environment is rapidly increasing and causing an urgent need to improve environmental activities. Contribute to environmental quality, e.g., by preventing landscape degradation, soil erosion, hydrogeologic risk, etc New international strategies such as the New Green Deal against climate change will be increasingly important since they can coordinate different realities and countries to enhance the global effects of policy measures. The provision of environmental benefits through agriculture, such as agri-environmental-climate public goods (AECPGs), has evolved over time and represents one of the main justifications to the public support given to farmers [2,3,4]. This provision is not aligned with the societal demand yet
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