Challenges of achieving biodiversity offset outcomes through agri-environmental schemes: evidence from an empirical study in Southern France.

Abstract

Environmental policies increasingly refer to biodiversity offsets (BO) as a way to slow down or halt biodiversity losses caused by development projects, including infrastructure and urban development, that could not be avoided or minimized through adequate mitigation. In many cases, ecological gains for offsets are obtained through restoration activities conducted on ecologically degraded land, including agricultural land specifically acquired for this purpose by developers. This leads to competition with other land-uses and social conflicts over land availability. The purpose of this paper is to analyse the opportunity of implementing biodiversity offsets by involving farmers in producing ecological gains through contracts akin to agri-environmental schemes, we call Agri-environmental Biodiversity Offsets Schemes (ABOS). Using actual offsets designed and implemented for a new railway line under construction in Southern France, this paper examines (1) the acceptability of ABOS contracts by farmers, and (2) the effectiveness of ABOS design and actual implementation. A survey carried out with 145 farmers reveals that the main determinants of acceptability are: i) usual economic factors whereby farmers with lowest compliance levels and opportunity costs, as well as farms facing economic difficulty, are more likely to engage, and ii) social factors, such as the importance given to other farmers’ decision to engage and the perception of the position of farming organisations (peer pressure). In terms of effectiveness, ABOS is shown to be effective in meeting the legal requirements of the developer, but concerns are raised about additionality and long-term duration of actions, and about non-compliance with contract requirements. We particularly highlight problems with contract enforcement – especially due to weak sanctions and monitoring – and farmers’ selection that do not allow minimizing moral hazard and adverse selection which are inherently attached to agri-environmental schemes. We suggest policy improvements and research perspectives to enhance the implementation of offsets through ABOS. Overall, with current implementation arrangements, this analysis leads us to question the use of ABOS in meeting BO objectives in the long term.