Identifying the Causes of Low Participation Rates in Conservation Tenders

Abstract

Conservation tenders are being used as a policy mechanism to deliver environmental benefits through changes in land, water and biodiversity management. While these mechanisms can potentially be more efficient than other agri-environmental and payment for ecosystem service schemes, a key limitation in practice is that participation rates from eligible landholders are often low, limiting both efficiency and effectiveness. In this paper we document and review potential causes of low participation in two categories: those that treat participation as an adoption issue focused on searching for the landholder, farm or practice characteristics that limit participation; and those that treat it as an auction design issue, looking for the different auction, contract or transaction cost elements that limit landholder interest in participation. We then model how landholders make choices to engage and bid in a tender, making three important contributions to the literature on this topic. First, we document the low participation rates in conservation tenders, mostly across developed countries, an issue that has received little attention to date. Second, we explain that a decision to participate in a conservation tender involves three simultaneous decisions about whether to change a management practice, whether to be involved in a public or private program with contractual obligations, and how to set a price or bid. Third, we explain that there are a number of factors that affect each stage of the decision process with some, such as landholder attitudes and risk considerations, relevant to all three. Our findings suggest that decisions to participate in a conservation tender are more complex than simple adoption decisions, involving optimisation challenges over a number of potentially offsetting factors.

Performance of Agglomeration Bonuses in Conservation Auctions: Lessons from a Framed Field Experiment

“…In such a setting, a PES auction with an agglomeration bonus could provide a more efficient, cost effective and viable alternative to both a command-and-control logging ban approach and a uniform payment scheme. These potential benefits, however, come at the expense of a more complex design and implementation burden, and thus higher transactions costs (Banerjee et al 2017) and the expectation of reduced rates of participation (Rolfe et al 2018). This necessitates additional academic endeavours to further assess the viability of this PES feature for rural forest land owners in less developed regions with limited education and market experience.…”

Key questions for conservation tenders as a means for delivering biodiversity benefits on private land

“…Rolfe et al . 2018) and Doole and Blackmore (2016, p. 271) suggested bidding process ‘left many landholders feeling isolated, frustrated, and even betrayed by the agency’. In addition, are landholders with better knowledge of the tender process more likely to be successful and is this achieving the best conservation outcome?…”

“…Rolfe et al . 2017, 2018). The recent ground‐breaking Economics of Biodiversity review by Dasgupta (2021) suggests that conservation tenders will continue to have a significant role amongst the suite of MBIs available in 21st century conservation (i.e.…”

“…Prominent conservation tenders include the large US Conservation Reserve Program, but Australia has been an enthusiastic adopter of tender programmes, accounting for 44% of global tender programmes (Rolfe et al . 2018). We draw insights most heavily from Australia, noting that the commonalities amongst tender programmes ensure a wider, global relevance.…”

“…2014; Rolfe et al . 2018) and characteristics of participants (Bond et al . 2018), policy and political dimensions (Whitten et al .…”