Spatial targeting of agri-environmental measures: cost-effectiveness and distributional consequences

Abstract

Agri-environmental measures are payments to farmers to reduce environmental risks or to preserve cultivated landscapes. These measures are codified in European Union regulations. Poor spatial targeting is one of the major causes of low cost-effectiveness in agri-environmental measures. Existing studies on spatial targeting focus primarily on selected individual measures; hence, they do not allow for conclusions at the program level, where the planning and implementing of decisions on a number of different measures has to be made. In this study, we analyzed the impacts of two spatial targeting options (targeting of erosion-reducing measures on erosion vulnerable areas; targeting of grassland extensification on N-pollution vulnerable areas) on the cost-effectiveness of the single measures and the entire agri-environmental program of the federal state of Brandenburg in Germany. The methodological steps included an analysis of empirical data on land use and program participation, an expert-based environmental impact assessment and a spatial allocation procedure based on linear programming. The environmental impact assessment delivered goal-specific index values for each measures-land parcel combination expressing the suitability of the measures for contributing to four regionally relevant program objectives. The cost-effectiveness of the measures and the program were calculated by putting budgetary costs in relation to the achieved environmental index sum. The calculated cost-effectiveness of the program in 2006 was 89.6% of the simulated optimal cost-effectiveness. The spatial targeting of erosion-reducing measures on erosion vulnerable areas caused an increase in the cost-effectiveness at the measures level and almost no changes at the program level. The spatial targeting of grassland extensification on N-pollution vulnerable areas, despite also improving the cost-effectiveness of this measure, had negative effects on the cost-effectiveness of the program.