Compensating environmental losses versus creating environmental gains: implications for biodiversity offsets

Summary

In the economic literature on the motivations underlying voluntary contributions to environmental public goods, little attention is granted to the way the overall objective of the environmental program is framed. A program which contributes to an increase of environmental quality can be perceived differently from a program designed to bring back the environmental quality to its original level, after it was damaged by human intervention. How does it impact participation rates and contribution levels? This paper addresses this issue in the context of agri-environmental schemes for biodiversity conservation. It compares farmers' willingness to participate in two contracts, one being framed as part of a biodiversity offset program, the other one as part of a biodiversity conservation program. We demonstrate with a discrete choice experiment that biodiversity-offsets programs need to offer a higher payment to enroll farmers compared to biodiversity conservation programs. This result is essentially driven by farmers who declare to have organic practices.