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Economic incentives for woodland creation on farmland: Modelling the impacts on biodiversity

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  • Nthambi, Mary
  • Simpson, Katherine
  • Bradfer-Lawrence, Tom
  • Dobson, Andrew
  • Finch, Tom
  • Fuentes-Montemayor, Elisa
  • Park, Kirsty
  • Watts, Kevin
  • Hanley, Nick

Abstract

This paper models the effects of economic incentives on woodland planting on UK farmland, and the spatially-varying impacts on three avian species. The economic model uses an agent-based approach: “farmers” in each parcel compare economic returns from keeping their current agricultural land use with the economic incentive for woodland planting. An ecological model then predicts the effects of both parcel-level and local landscape-level woodland cover on species distributions. We compare results from two case study areas which vary in terms of the spatial correlation of opportunity costs and ecological potential. As the per-hectare value of the subsidy for woodland planting is increased, the values of our biodiversity indicator increase, but at rates which vary by case study area and by species. The cost-effectiveness of the economic instrument varies according to the sign of the spatial correlation between opportunity costs and ecological potential.

Suggested Citation

  • Nthambi, Mary & Simpson, Katherine & Bradfer-Lawrence, Tom & Dobson, Andrew & Finch, Tom & Fuentes-Montemayor, Elisa & Park, Kirsty & Watts, Kevin & Hanley, Nick, 2024. "Economic incentives for woodland creation on farmland: Modelling the impacts on biodiversity," Ecological Economics, Elsevier, vol. 224(C).
    • Handle: RePEc:eee:ecolec:v:224:y:2024:i:c:s0921800924001629
    DOI: 10.1016/j.ecolecon.2024.108265
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    References listed on IDEAS

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    1. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
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    3. Simpson, Katherine & Armsworth, Paul R. & Dallimer, Martin & Nthambi, Mary & de Vries, Frans P. & Hanley, Nick, 2023. "Improving the ecological and economic performance of agri-environment schemes: Payment by modelled results versus payment for actions," Land Use Policy, Elsevier, vol. 130(C).
    4. Westaway, Sally & Grange, Ian & Smith, Jo & Smith, Laurence G., 2023. "Meeting tree planting targets on the UK's path to net-zero: A review of lessons learnt from 100 years of land use policies," Land Use Policy, Elsevier, vol. 125(C).
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