July 1st 2014 Economic instruments for agro-environmental measures Lessons learned from Payment for...

July 1st 2014

Economic instruments for agro-environmental measures

Lessons learned from Payment for Environmental Services (PES) for NWRM

Rob van der Veeren

2 July 1st 2014Rijkswaterstaat

Outline

• NWRM PES and agriculture• Background: Dutch interest in agriculture• Need for economic instruments for agri-environmental management• Review of Dutch case studies• International review• Concluding remarks


NWRM PES and agriculture

• NL sees NWRM as an ‘umbrella term’, not as a precisely defined concept.

• Just as that other buzz word: Ecosystem services• Financing opportunities for NWRM may therefore overlap with

opportunities for ‘payment for ecosystem services’ (PES)

• So, may be we can learn from studies on PES?


Background: Dutch interest in agriculture

• Hydromophological changes and diffuse pollution from agriculture are major problems for Water Framework Directive in the Netherlands– Solution: additional measures in agriculture

• The Netherlands is increasingly threatened by sea level rise, salt intrusion and fresh water allocation problems– Solution: more water storage in rural (agricultural) areas

• The Netherlands has appointed Natura 2000 areas, but corridors are needed to make them more successful– Solution: more nature corridors in rural (agricultural) areas

• But imposing additional measures disturbs level playing field (Dutch agriculture obeys Nitrate Directive and other EU legislation)– Solution: innovative economic instruments


Wouldn’t it be nice…

to have a system which could simultaneously:– Increase water storage capacity of water systems in rural areas– Increase nature corridors along water in rural areas– Decrease agricultural pressures on water (e.g. nutrient emissions)

and would be attractive to farmers, because:– They meet requirements of EU legislation (e.g. Nitrate Directive)– Not only get compensated for loss of agricultural production, but

are paid for land stewardship/nature conservation


Just an idea…

• Water boards are – responsible for water management in rural areas– Interested in storage capacity, nature corridors and water quality– democraticly chosen (representatives of public interest)– paid by levies from farmers industry inhabitants in same region– Interested in cost-effective measures in the capillaries

• Could they pay agriculture for agro-environmental measures to increase water storage, prevent flooding, enhance nature? (user pays principle)

• E.g. by paying farmers for the opportunity to use part of their land to create wet buffer strips

• Inventory of what happens in the Netherlands and abroad


Review of Dutch case studies

• Inventory of innovative economic instruments to stimulate agricultural water management measures

• Arrangements are on top of regular ‘catalogue of green blue services’ and other current policies, and voluntary

• 120 case studies found; are highly diverse in: – Status (research, pilot, formal

arrangement)– Spatial scale (local, province, national)– Type of arrangement (advice, technical

support)• 13 case studies are analysed in more detail

http://www.helpdeskwater.nl/publish/pages/26880/verkenning_innovatieve_economische_instrumenten_voor_agrarische_watermaatregelen_overzicht_van_praktijkstudies_2010.pdf

For English

version:

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General characteristics of payment schemes

• For initial investment, for maintenance, or for depreciation of value• Depending on regional circumstances• Most often provinces are involved, or regional water boards• Not for ecosystem services• No direct link between financing sources (demand) and ecosystem

provider (supply)


Factors contributing to success: process

• Acceptance is key. Increases when advisors go to the farm• Realistic ambitions (according to farmers)• Allow for learning by doing; may result in new innovations• Involve farmers when selecting and implementing measures• Permanent involvement during implementation:

– Courses (compensation for time spent);– Bioassays performed by farmers

• One stop shop (involve agricultural organisations in this) • Short term implementation


Factors contributing to success: content

• Adequate payment• Also compensation for maintenance and administration• Possibilities for tailor made arrangements (location specific)• Arrangement and financing secured for medium term (> 5 years)• Arrangement should suit the new CAP requirements• No definitive change in land use (agriculture > nature)• Multiple ecosystem services can be offered in combination• Costs for the payer should not be excessive; combination of

objectives can help, since this often means multiple financing sources


International review on payment schemes for wet buffer strips• Wet buffer strips relevant for the Netherlands (flat country?), but

nowhere else• Extended scope of study: also include other types of wet zones• 11 countries: Austria, Belgium, Denmark, France, Germany,

Luxembourg, Netherlands, Norway, Scotland, Sweden, Switzerland• General characteristics: voluntary, for investments not for

environmental benefits• Two main types:

– Project based: payment to buy land and for investments– Continuous payments: To keep land converted, paid from EU RDF,

some MS pay more when environmental benefits accrue• In some cases overcompensation was found to ensure participation


Factors contributing to success/failure

• Compensation less than market conform reduces participation rate

• Funding should be linked to easily understandable rules and limited administrative burden

• Stable, long term, trustful funding provided by one office (one stop shop for farmers, also when various organisations are involved)

• The required shift in practice should not be too drastic

• Farm specific characteristics are also important: Size and type of farm, age and education of farmer, and full or part-time farming http://www.helpdeskwater.nl/publish/pages/26880/

international_review_on_payment_schemes_for_wet_buffer_strips_and_other_types_of_wet_zones_along_privately_owned_land.pdf


Concluding remarks

• Efficiency and effectiveness of instruments depend on:– Tailor made arrangements; no one size fits all– One stop shop; reduction in administrative burden– Trust in stability of longer term arrangement– Fit in CAP and other policies

• Participation depends on size of payment• Current payment schemes pay for measures not for benefits


If you have any questions,

you know where you can find me…

[email protected]

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