Intermediaries within the governance structures of payments for ecosystem services : cost-effectiveness and environmental effectiveness from an institutional economic perspective

Abstract

The dissertation focuses on expedient involvement by intermediaries for the implementation of payments for ecosystem services (PES). The work consists of five peer-reviewed papers published in international journals and the framework text. Economic instruments for the governance of natural resources have been considered as a new and innovative policy instruments over the past decades. In recent years, PES have received increasing attention in academia and at the policy level. However, conceptually PES appears to be a rather loose and multi-facetted term, and there are many different conservation approaches bundled under this “label”. Within the international literature, there is an ongoing discussion on what constitutes a genuine PES case (and what not). The first publication of this dissertation is a review paper and provides a structured overview on the diverse conservation approaches published under the PES terminology within the international literature. The paper shows that PES are commonly imbedded in a complex institutional setting with actor constellations that do not resemble simple free market-based buyer and seller relations. There are only very few studies that describe contractual and conditional payments between private ES beneficiaries and landholders/land users for the adoption of practices that secure ES. Most existing PES cases are based on governmental governance structures, where public funds are distributed to land users for the adoption of certain land use practices that are assumed to provide certain ecosystem services (ES) or other less specified environmental Benefits including biodiversity. At the point of retrieving the literature for the review paper in 2011, the PES concept had more policy relevance in so-called developing countries, and in particular in Latin America, than in industrialized countries. The agri-environmental measures (AEMs) of the European Union (EU) or United States (US) have been underrepresented within the international PES literature, unless being in place for longer than many PES programs in e.g. Latin America. This, as mostly a terminology referring to ‘non-commodity output’, ‘multifunctionality of agriculture’ or ‘agri-environmental payments or measures’ rather than to ‘payments for ecosystem or environmental services’ has been used in the EU or US, at least at the point of writing the review. Within the first publication I therefore argue that a pooling of AEMs and PES research schools and a stronger consideration of the respective PES and AEMs research results should be promoted, in particular as research across continents often focuses on comparable implementation difficulties. The remaining four publications focus on non-governmental intermediaries within governmental PES governance structures in Germany. Large-scale governmental PES programs have frequently been criticized for low levels of cost-effectiveness and environmental effectiveness. Low levels of cost-effectiveness are often the result of high transaction costs (TCs). Environmental effectiveness of PES in turn can be influenced – among others – through spatial targeting of PES and participation of land users. This dissertation considers that intermediaries can influence both, cost-effectiveness and environmental effectiveness of PES. Publication two devises an analytical framework as a tool for assessing the potential of intermediaries to improve the cost-effectiveness and environmental effectiveness of PES implementation. The framework is based on institutional economic theory and assess how and for which activities intermediaries can influence private and public TCs, as well as participation levels within PES, and spatial targeting of the diverse measures. In general, the framework as a tool can be applied to different PES cases and governance structures, in order to assess the potential influence of an intermediary on the performance of PES. Within the paper, the framework is exemplary applied to a particular intermediary – namely the German Landcare Associations (LCAs) – in the context of agri-environmental measures (AEMs) implementation in Germany. The paper discusses the relevant organizational design characteristics of LCAs that enable him/ her to improve the implementation of governmental PES programs. Publication three analyses empirically how intermediaries can improve the problem of transacting AEMs. The paper is organized as a case study analysis with LCAs as the intermediary. Based on an online survey, the paper identifies a few but severe institutional challenges and constraints that adversely affect AEMs implementation as faced by the intermediary. The paper also investigates the current and prospective future involvement of LCAs in the context of AEMs implementation and discusses how these can contribute to alleviating the identified adverse institutional framework conditions. The results of the paper underline the need to provide agri-environmental advice and assistance to improve the effectiveness of AEMs implementation. The paper also discusses that intermediaries could be officially commissioned with and remunerated for their service provision. Publication four analyses empirically the involvement of LCAs in the context of AEMs implementation in Germany. The paper examines how the involvement of intermediaries influences land users’ decision making process to participation in and actual adoption rates of AEMs. The work also assesses if and how the intermediary pursues a spatial targeting of AEMs and thereby boosts the environmental effectiveness of measures. The results indicate that the provision of deliberate agri-environmental advice and assistance helps to improve the effectiveness of public PES programs. However, it is important to consider who provides such services. Locally embedded and committed intermediaries that hold local social and trustworthy networks appear to be well-suited for such services and should be considered as an active component within PES implementing governance structures. Publication five considers that the ES concept should be further integrated into agri-environmental policies in general and into the AEMs in particular. The paper Elaborates that locally embedded civil society actors are important for supporting the integration of the ES concept into AEMs. The framework text surrounding these five publications introduces the PES concept and guides to the overall research aim of investigating how intermediaries can improve the cost-effectiveness and environmental effectiveness of PES implementation. The assessment of the intermediary’s involvement is based on institutional economic theory. The framework text therefore provides a brief explication on the fundamentals of the institutional economic schools and their respective theories and emphasizes the relevance of this lens for analyzing intermediary involvement within natural resource governance. Finally, the accumulated research results of the individual five papers are discussed and concluded jointly in the framework text.