Defining the spectrum - effect-based payments as the future model of agri-environmental policy instruments?

Summary

Governments can encourage land managers to improve their environmental performance via agri-environmental incentive schemes. The design of the incentive mechanism is crucial for determining which desirable impacts are delivered while mitigating undesirable side effects. Action-based and results-based designs have been widely discussed, but both have known limitations that are difficult to overcome. So-called hybrid approaches are less commonly discussed, possibly because they are harder to define. We contribute by defining hybrid approaches as effect-based designs and by presenting why achieving the required efficiency and effectiveness improvements in the next generation of incentive schemes rather calls for hybrid, effect-based approaches.