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Quantifying the Benefits of Conservation Auctions Quantifier les avantages des enchères pour sélectionner les participants à des programmes de conservation Quantitative Bestimmung des Nutzens von Versteigerungen für Umweltschutzmaßnahmen

Author

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  • Uwe Latacz‐Lohmann
  • Steven Schilizzi

Abstract

Quantifying the Benefits of Conservation Auctions Most EU conservation schemes offer a single, fixed payment for compliance with a predetermined set of management prescriptions. Alternatively, the conservation tasks could be put up for tender: landholders are invited to bid competitively for a limited number of conservation contracts. Theory suggests that bidding reduces over‐compensation and increases the cost‐effectiveness of conservation contracting. There is, to date, little evidence about the cost‐effectiveness gains of such conservation auctions vis‐à‐vis the more traditional fixed‐payment schemes, and what evidence does exist appears inconclusive. Building on available theory, this work uses controlled laboratory experiments to investigate the budgetary and the economic performance of conservation auctions. The experiments were carried out in two countries to check for robustness of results. We find that conservation auctions outperform the more traditional fixed‐price schemes in the one‐shot setting: one unit of environmental benefit paid at a fixed rate would have cost 10 to 60 per cent more than the auction, depending on the fixed‐rate benchmark chosen. With identical repetition, however, the auction quickly loses its edge, making it possible for the auction to be outperformed by an equivalent fixed‐rate programme. Our results suggest that previous estimates of conservation auction performance have been far too optimistic. La plupart des programmes de conservation en place dans l'Union européenne offrent un paiement unique et fixe pour le respect d'un ensemble prédéterminé de prescriptions relatives à la gestion des terres. Une alternative pourrait être de mettre les actions de conservation aux enchères : les propriétaires fonciers sont invités à enchérir de manière concurrentielle pour obtenir un nombre limité de contrats de conservation. La théorie suggère que la mise aux enchères limite la surcompensation et accroît l'effi cacité de la contractualisation des pratiques de conservation par rapport à leur coût. Il existe à ce jour peu d'éléments pour juger des gains d'effi cacité par rapport aux coûts de telles enchères pour la conservation en comparaison des programmes plus traditionnels qui offrent des paiements fixes. En outre, lorsqu'ils existent, ces éléments sont peu probants. A partir de la théorie existante, cette étude se fonde sur des expérimentations contrôlées en laboratoire pour évaluer la performance économique et budgétaire des enchères pour l'allocation de contrats de conservation. Les expériences ont été menées dans deux pays pour vérifi er la robustesse des résultats. Nous trouvons qu'en cas d'enchères à un tour, leurs performances dépassent celles des programmes plus traditionnels comportant des prix fixes: une unité d'avantage environnemental payéà prix fixe aurait coûté 10 à 60 % de plus que l'enchère, selon le taux fi xé. Cependant, lorsque les tours d'enchères sont répétés à l'identique, l'enchère perd rapidement son avantage et peut être dépassée par un programme à taux fixe équivalent. Nos résultats suggèrent que les estimations précédentes de la performance des enchères pour la conservation ont été bien trop optimistes. Die meisten Umweltschutzmaßnahmen der EU beruhen auf einer festen einheitlichen Prämie, die für die Einhaltung einer vorgeschriebenen Anzahl von Bewirtschaftungsaufl agen gezahlt wird. Alternativ dazu könnten die mit dem Umweltschutz verbundenen Aufgaben ausgeschrieben werden: Landeigentümer sollen im Rahmen eines Wettbewerbs auf eine begrenzte Anzahl von Umweltschutzverträgen bieten. Die Theorie legt es nahe, dass durch das Bieten überhöhte Ausgleichszahlungen gesenkt und die Kostenwirksamkeit des Vertragsumweltschutzes erhöht wird. Bis heute gibt es nur wenige Belege dafür, dass die Kostenwirksamkeit von solchen Versteigerungen für Umweltschutzmaßnahmen im Vergleich mit den herkömmlichen Zahlungen einer festen einheitlichen Prämie erhöht werden kann; und die wenigen vorhandenen Belege sind mehrdeutig. Basierend auf dem Stand der Theorie bedient sich unsere Arbeit kontrollierter Experimente, um die budgetäre und wirtschaftliche Leistungsfähigkeit von Versteigerungen für Umweltschutzmaßnahmen zu untersuchen. Die Experimente wurden in zwei Ländern durchgeführt, um robuste Ergebnisse sicherzustellen. Wir fanden heraus, dass die Versteigerungen für Umweltschutzmaßnahmen die herkömmlichen Programme mit Zahlungen eher fester einheitlicher Prämie in einem einmaligen Szenario an Leistung übertreffen: pro Einheit Umweltnutzen hätten bei Zahlung einer festen Prämie zehn bis 60 Prozent mehr gezahlt werden müssen als bei einer Versteigerung; je nach Auswahl der Bezugsgröße für die feste Prämie. Wird das Experiment jedoch identisch wiederholt, büßt die Versteigerung schnell ihren Vorsprung ein und kann von einem äquivalenten Programm mit fester einheitlicher Prämienzahlung übertroffen werden. Unsere Ergebnisse deuten darauf hin, dass die bisherigen Schätzungen hinsichtlich der Leistungsfähigkeit von Versteigerungen für Umweltschutzmaßnahmen viel zu optimistisch waren.

Suggested Citation

  • Uwe Latacz‐Lohmann & Steven Schilizzi, 2007. "Quantifying the Benefits of Conservation Auctions Quantifier les avantages des enchères pour sélectionner les participants à des programmes de conservation Quantitative Bestimmung des Nutzens von Vers," EuroChoices, The Agricultural Economics Society, vol. 6(3), pages 32-39, December.
  • Handle: RePEc:bla:eurcho:v:6:y:2007:i:3:p:32-39
    DOI: 10.1111/j.1746-692X.2007.00073.x
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    References listed on IDEAS

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    1. Stoneham, Gary & Chaudhri, Vivek & Ha, Arthur & Strappazzon, Loris, 2003. "Auctions for conservation contracts: an empirical examination of Victoria’s BushTender trial," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 1-24.
    2. Timothy N. Cason & Lata Gangadharan, 2005. "A Laboratory Comparison of Uniform and Discriminative Price Auctions for Reducing Non-point Source Pollution," Land Economics, University of Wisconsin Press, vol. 81(1).
    3. Steven Schilizzi & Uwe Latacz-Lohmann, 2007. "Assessing the Performance of Conservation Auctions: An Experimental Study," Land Economics, University of Wisconsin Press, vol. 83(4), pages 497-515.
    4. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
    5. Atakelty Hailu & Steven Schilizzi, 2004. "Are Auctions More Efficient Than Fixed Price Schemes When Bidders Learn?," Australian Journal of Management, Australian School of Business, vol. 29(2), pages 147-168, December.
    6. Schilizzi, Steven & Latacz-Lohmann, Uwe, 2007. "Assessing the performance of conservation auctions: an experimental study," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 10436, Australian Agricultural and Resource Economics Society.
    7. Gary Stoneham & Vivek Chaudhri & Arthur Ha & Loris Strappazzon, 2003. "Auctions for conservation contracts: an empirical examination of Victoria's BushTender trial," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(4), pages 477-500, December.
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    1. Offermann, Frank & Nieberg, Hiltrud & Hecht, Judith, 2008. "Potential of differentiated payment levels based on standard cost approaches: A case study of selected rural development measures in Germany," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36866, Agricultural Economics Society.
    2. Glebe, Thilo W., 2011. "Tendering conservation contracts: Should information on environmental benefits be disclosed or concealed?," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114625, European Association of Agricultural Economists.

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