IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v227y2025ics0921800924003112.html
   My bibliography  Save this article

Cost-effective policy instruments for biodiversity conservation under climate change – The need for flexibility

Author

Listed:
  • Gerling, Charlotte
  • Drechsler, M.
  • Leins, Johannes A.
  • Sturm, Astrid
  • Wätzold, Frank

Abstract

Climate change is one of the main threats for biodiversity. As it affects the ecological and economic system, conservation costs and impacts may change in a heterogeneous manner. This implies that cost-effective conservation sites and measures may no longer be so in the future. We investigate spatial flexibility (to adapt the location of conservation sites) and management flexibility (to adapt the conservation measures on those sites) as novel criteria for analysing the cost-effectiveness of policy instruments to conserve biodiversity under climate change. We develop a generic climate-ecological-economic modelling approach that captures the role of spatial and management flexibility to assess the cost-effectiveness of policy instruments. We apply the modelling approach to the conservation of an indicator species in agricultural grasslands in a case study area in Northern Germany, and compare the cost-effectiveness of the policy instruments of land purchase (low spatial flexibility, high management flexibility) and long-term individual conservation contracts (medium spatial and management flexibility) considering a period from 2020 to 2079. We find that both spatial and management flexibility matter in the case study and discuss their broader relevance for conservation in a changing climate.

Suggested Citation

  • Gerling, Charlotte & Drechsler, M. & Leins, Johannes A. & Sturm, Astrid & Wätzold, Frank, 2025. "Cost-effective policy instruments for biodiversity conservation under climate change – The need for flexibility," Ecological Economics, Elsevier, vol. 227(C).
    • Handle: RePEc:eee:ecolec:v:227:y:2025:i:c:s0921800924003112
    DOI: 10.1016/j.ecolecon.2024.108414
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800924003112
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2024.108414?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Katherine Hannah Simpson & Frans de Vries & Martin Dallimer & Paul R Armsworth & Nick Hanley, 2021. "Understanding the Performance of Biodiversity Offset Markets: Evidence from an Integrated Ecological-Economic Model," Land Economics, University of Wisconsin Press, vol. 97(4), pages 836-857.
    2. Duke, Joshua M. & Dundas, Steven J. & Johnston, Robert J. & Messer, Kent D., 2014. "Prioritizing payment for environmental services: Using nonmarket benefits and costs for optimal selection," Ecological Economics, Elsevier, vol. 105(C), pages 319-329.
    3. Nalle, Darek J. & Montgomery, Claire A. & Arthur, Jeffrey L. & Polasky, Stephen & Schumaker, Nathan H., 2004. "Modeling joint production of wildlife and timber," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 997-1017, November.
    4. Banerjee, Simanti & Cason, Timothy N. & de Vries, Frans P. & Hanley, Nick, 2017. "Transaction costs, communication and spatial coordination in Payment for Ecosystem Services Schemes," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 68-89.
    5. Stephen Polasky & Erik Nelson & Derric Pennington & Kris Johnson, 2011. "The Impact of Land-Use Change on Ecosystem Services, Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(2), pages 219-242, February.
    6. Bareille, François & Chakir, Raja, 2023. "The impact of climate change on agriculture: A repeat-Ricardian analysis," Journal of Environmental Economics and Management, Elsevier, vol. 119(C).
    7. Barton, Madeleine G. & Terblanche, John S. & Sinclair, Brent J., 2019. "Incorporating temperature and precipitation extremes into process-based models of African lepidoptera changes the predicted distribution under climate change," Ecological Modelling, Elsevier, vol. 394(C), pages 53-65.
    8. Lewis, David J. & Plantinga, Andrew J. & Nelson, Erik & Polasky, Stephen, 2011. "The efficiency of voluntary incentive policies for preventing biodiversity loss," Resource and Energy Economics, Elsevier, vol. 33(1), pages 192-211, January.
    9. M. Brunette & M. Hanewinkel & R. Yousefpour, 2020. "Risk aversion hinders forestry professionals to adapt to climate change," Climatic Change, Springer, vol. 162(4), pages 2157-2180, October.
    10. Nick Hanley & Simanti Banerjee & Gareth D. Lennox & Paul R. Armsworth, 2012. "How should we incentivize private landowners to ‘produce’ more biodiversity?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(1), pages 93-113, Spring.
    11. Lewis, David J. & Polasky, Stephen, 2018. "An auction mechanism for the optimal provision of ecosystem services under climate change," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 20-34.
    12. Severen, Christopher & Costello, Christopher & Deschênes, Olivier, 2018. "A Forward-Looking Ricardian Approach: Do land markets capitalize climate change forecasts?," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 235-254.
    13. Pindyck, Robert S, 1988. "Irreversible Investment, Capacity Choice, and the Value of the Firm," American Economic Review, American Economic Association, vol. 78(5), pages 969-985, December.
    14. Kandel, Eugene & Pearson, Neil D., 2002. "Option Value, Uncertainty, and the Investment Decision," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 37(3), pages 341-374, September.
    15. Oliver Schöttker & Frank Wätzold, 2022. "Climate Change and the Cost-Effective Governance Mode for Biodiversity Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(2), pages 409-436, June.
    16. Miller, Jon R & Lad, Frank, 1984. "Flexibility, learning, and irreversibility in environmental decisions: A bayesian approach," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 161-172, June.
    17. Simpson, Katherine & Hanley, Nick & Armsworth, Paul & de Vries, Frans & Dallimer, Martin, 2021. "Incentivising Biodiversity Net Gain with an Offset Market," 95th Annual Conference, March 29-30, 2021, Warwick, UK (Hybrid) 312052, Agricultural Economics Society - AES.
    18. Francois Bareille & Matteo Zavalloni & Meri Raggi & Davide Viaggi, 2021. "Cooperative Management of Ecosystem Services: Coalition Formation, Landscape Structure and Policies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 79(2), pages 323-356, June.
    19. Ian H. Luby & Steve J. Miller & Stephen Polasky, 2022. "When and where to protect forests," Nature, Nature, vol. 609(7925), pages 89-93, September.
    20. Sims, Katharine R.E. & Alix-Garcia, Jennifer M., 2017. "Parks versus PES: Evaluating direct and incentive-based land conservation in Mexico," Journal of Environmental Economics and Management, Elsevier, vol. 86(C), pages 8-28.
    21. D. A. Fordham & H. R. Akçakaya & B. W. Brook & A. Rodríguez & P. C. Alves & E. Civantos & M. Triviño & M. J. Watts & M. B. Araújo, 2013. "Adapted conservation measures are required to save the Iberian lynx in a changing climate," Nature Climate Change, Nature, vol. 3(10), pages 899-903, October.
    22. Amy W. Ando, 2022. "Equity and Cost-Effectiveness in Valuation and Action Planning to Preserve Biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(4), pages 999-1015, December.
    23. Wang, Yuhan & Lewis, David J., 2024. "Wildfires and climate change have lowered the economic value of western U.S. forests by altering risk expectations," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).
    24. Mewes, Melanie & Drechsler, Martin & Johst, Karin & Sturm, Astrid & Wätzold, Frank, 2015. "A systematic approach for assessing spatially and temporally differentiated opportunity costs of biodiversity conservation measures in grasslands," Agricultural Systems, Elsevier, vol. 137(C), pages 76-88.
    25. Patto, João V. & Rosa, Renato, 2022. "Adapting to frequent fires: Optimal forest management revisited," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    26. Ando, Amy & Howlader, Aparna & Mallory, Mindy, 2018. "Diversifying to Reduce Conservation Outcome Uncertainty in Multiple Environmental Objectives," Agricultural and Resource Economics Review, Cambridge University Press, vol. 47(2), pages 220-238, August.
    27. Amy W. Ando & Christian Langpap, 2018. "The Economics of Species Conservation," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 445-467, October.
    28. Payal Shah & Amy W. Ando, 2016. "Permanent and Temporary Policy Incentives for Conservation under Stochastic Returns from Competing Land Uses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(4), pages 1074-1094.
    29. Cramton, Peter & Hellerstein, Daniel & Higgins, Nathaniel & Iovanna, Richard & López-Vargas, Kristian & Wallander, Steven, 2021. "Improving the cost-effectiveness of the Conservation Reserve Program: A laboratory study," Journal of Environmental Economics and Management, Elsevier, vol. 108(C).
    30. Ioanna Grammatikopoulou & Janne Artell & Turo Hjerppe & Eija Pouta, 2020. "A Mire of Discount Rates: Delaying Conservation Payment Schedules in a Choice Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(3), pages 615-639, November.
    31. Frank Wätzold & Martin Drechsler & Karin Johst & Melanie Mewes & Astrid Sturm, 2016. "A Novel, Spatiotemporally Explicit Ecological-economic Modeling Procedure for the Design of Cost-effective Agri-environment Schemes to Conserve Biodiversity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(2), pages 489-512.
    32. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Sturm, Astrid & Wätzold, Frank, 2023. "Time to consider the timing of conservation measures: Designing cost-effective agri-environment schemes under climate change," Agricultural and Resource Economics Review, Cambridge University Press, vol. 52(2), pages 231-249, August.
    33. Leins, Johannes A. & Banitz, Thomas & Grimm, Volker & Drechsler, Martin, 2021. "High-resolution PVA along large environmental gradients to model the combined effects of climate change and land use timing: lessons from the large marsh grasshopper," Ecological Modelling, Elsevier, vol. 440(C).
    34. Ferraro, Paul J., 2008. "Asymmetric information and contract design for payments for environmental services," Ecological Economics, Elsevier, vol. 65(4), pages 810-821, May.
    35. Banerjee, Onil & Bark, Rosalind & Connor, Jeff & Crossman, Neville D., 2013. "An ecosystem services approach to estimating economic losses associated with drought," Ecological Economics, Elsevier, vol. 91(C), pages 19-27.
    36. Hecker, Lutz Philip & Sturm, Astrid & Querhammer, Lisa & Wätzold, Frank, 2024. "Cost-effectiveness of state-dependent versus state-independent agri-environment schemes for biodiversity conservation," Ecological Economics, Elsevier, vol. 217(C).
    37. Drechsler, Martin & Wätzold, Frank & Grimm, Volker, 2022. "The hitchhiker's guide to generic ecological-economic modelling of land-use-based biodiversity conservation policies," Ecological Modelling, Elsevier, vol. 465(C).
    38. Frances C. Moore & Uris Baldos & Thomas Hertel & Delavane Diaz, 2017. "New science of climate change impacts on agriculture implies higher social cost of carbon," Nature Communications, Nature, vol. 8(1), pages 1-9, December.
    39. Lawley, Chad & Yang, Wanhong, 2015. "Spatial interactions in habitat conservation: Evidence from prairie pothole easements," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 71-89.
    40. Leroux, Anke D. & Martin, Vance L. & Goeschl, Timo, 2009. "Optimal conservation, extinction debt, and the augmented quasi-option value," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 43-57, July.
    41. Eric Ruto & Guy Garrod, 2009. "Investigating farmers' preferences for the design of agri-environment schemes: a choice experiment approach," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 52(5), pages 631-647.
    42. David M. Kling & James N. Sanchirico & James E. Wilen, 2016. "Bioeconomics of Managed Relocation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 1023-1059.
    43. Chakrabarti, Anwesha & Chase, Lisa & Strong, Allan M. & Swallow, Stephen K., 2019. "Making markets for private provision of ecosystem services: The Bobolink Project," Ecosystem Services, Elsevier, vol. 37(C), pages 1-1.
    44. Gerling, Charlotte & Strum, Astrid & Wätzold, Frank, 2020. "The impact of climate change on the profit-maximising timing of grassland use and conservation costs," MPRA Paper 102945, University Library of Munich, Germany.
    45. Arora, Gaurav & Feng, Hongli & Hennessy, David A. & Loesch, Charles R. & Kvas, Susan, 2021. "The impact of production network economies on spatially-contiguous conservation– Theoretical model with evidence from the U.S. Prairie Pothole Region," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    46. Johanna Kangas & Markku Ollikainen, 2023. "Behavioural and Welfare Analysis of an Intermediary in Biodiversity Offset Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 1127-1154, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Sturm, Astrid & Wätzold, Frank, 2022. "Time to consider the timing of conservation measures: designing cost-effective agri-environment schemes under climate change," MPRA Paper 113877, University Library of Munich, Germany.
    2. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Leins, Johannes A. & Radtke, Kai & Schulz, Björn & Sturm, Astrid & Wätzold, Frank, 2021. "Modelling the cost-effective spatio-temporal allocation of conservation measures in agricultural landscapes facing climate change," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242352, Verein für Socialpolitik / German Economic Association.
    3. Gerling, Charlotte & Schöttker, Oliver & Hearne, John, 2022. "The ”climate adaptation problem” in biodiversity conservation: the role of reversible conservation investments in optimal reserve design under climate change," MPRA Paper 114812, University Library of Munich, Germany.
    4. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Leins, Johannes A. & Radtke, Kai & Schulz, Björn & Sturm, Astrid & Wätzold, Frank, 2021. "Cost-effective conservation in the face of climate change: combining ecological-economic modelling and climate science for the cost-effective spatio-temporal allocation of conservation measures in agr," MPRA Paper 105608, University Library of Munich, Germany.
    5. Dalheimer, Bernhard & Parikoglou, Iordanis & Brambach, Fabian & Yanita, Mirawati & Kreft, Holger & Brümmer, Bernhard, 2024. "On the palm oil-biodiversity trade-off: Environmental performance of smallholder producers," Journal of Environmental Economics and Management, Elsevier, vol. 125(C).
    6. Gregory M. Parkhurst & Jason F. Shogren & Thomas Crocker, 2016. "Tradable Set-Aside Requirements (TSARs): Conserving Spatially Dependent Environmental Amenities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 719-744, April.
    7. Gerling, Charlotte & Schöttker, Oliver & Hearne, John, 2022. "Irreversible and partly reversible investments in the optimal reserve design problem: the role of flexibility under climate change," MPRA Paper 112089, University Library of Munich, Germany.
    8. Zhaoyang Liu & Simanti Banerjee & Timothy N. Cason & Nick Hanley & Qi Liu & Jintao Xu & Andreas Kontoleon, 2024. "Spatially coordinated conservation auctions: A framed field experiment focusing on farmland wildlife conservation in China," American Journal of Agricultural Economics, John Wiley & Sons, vol. 106(4), pages 1354-1379, August.
    9. Jianxin Yang & Jian Gong & Wenwu Tang, 2019. "Prioritizing Spatially Aggregated Cost-Effective Sites in Natural Reserves to Mitigate Human-Induced Threats: A Case Study of the Qinghai Plateau, China," Sustainability, MDPI, vol. 11(5), pages 1-23, March.
    10. Markova-Nenova, Nonka & Wätzold, Frank & Sturm, Astrid, 2020. "Distributional Impacts of Cost-effective Spatially Homogeneous and Regionalized Agri-Environment Payments. A case study of a Grassland Scheme in Saxony, Germany," MPRA Paper 104759, University Library of Munich, Germany.
    11. Oliver Schöttker & Frank Wätzold, 2022. "Climate Change and the Cost-Effective Governance Mode for Biodiversity Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(2), pages 409-436, June.
    12. François Bareille & Matteo Zavalloni & Davide Viaggi, 2023. "Agglomeration bonus and endogenous group formation," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(1), pages 76-98, January.
    13. Liu, Zhaoyang & Kontoleon, Andreas, 2018. "Meta-Analysis of Livelihood Impacts of Payments for Environmental Services Programmes in Developing Countries," Ecological Economics, Elsevier, vol. 149(C), pages 48-61.
    14. Huber, Robert & Zabel, Astrid & Schleiffer, Mirjam & Vroege, Willemijn & Brändle, Julia M. & Finger, Robert, 2021. "Conservation Costs Drive Enrolment in Agglomeration Bonus Scheme," Ecological Economics, Elsevier, vol. 186(C).
    15. David J Lewis & Steven J Dundas & David M Kling & Daniel K Lew & Sally D Hacker, 2019. "The non-market benefits of early and partial gains in managing threatened salmon," PLOS ONE, Public Library of Science, vol. 14(8), pages 1-15, August.
    16. Schöttker, Oliver & Wätzold, Frank, 2017. "Cost-effectiveness of buying land for conservation versus paying land-users for conservation measures – the case of preserving an oligotrophic lake in a Natura 2000 area in North Germany," MPRA Paper 80661, University Library of Munich, Germany.
    17. Gerling, Charlotte & Schöttker, Oliver & Hearne, John, 2022. "Keep it or Leave it - the Role of Reversible Conservation Investments in Optimal Reserve Design under Climate Change," VfS Annual Conference 2022 (Basel): Big Data in Economics 264058, Verein für Socialpolitik / German Economic Association.
    18. Christian Stetter & Philipp Mennig & Johannes Sauer, 2022. "Using Machine Learning to Identify Heterogeneous Impacts of Agri-Environment Schemes in the EU: A Case Study," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 723-759.
    19. Zhaoyang Liu & Jintao Xu & Xiaojun Yang & Qin Tu & Nick Hanley & Andreas Kontoleon, 2019. "Performance of Agglomeration Bonuses in Conservation Auctions: Lessons from a Framed Field Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(3), pages 843-869, July.
    20. Ito, Junichi, 2022. "Program design and heterogeneous treatment effects of payments for environmental services," Ecological Economics, Elsevier, vol. 191(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:227:y:2025:i:c:s0921800924003112. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.