Cost-effectiveness analysis of policy instruments for greenhouse gas emission mitigation in the agricultural sector.

Market-based policy instruments to reduce greenhouse gas (GHG) emissions are generally considered more appropriate than command and control tools. However, the omission of transaction costs from policy evaluations and decision-making processes may result in inefficiency in public resource allocation and sub-optimal policy choices and outcomes. This paper aims to assess the relative cost-effectiveness of market-based GHG mitigation policy instruments in the agricultural sector by incorporating transaction costs. Assuming that farmers' responses to mitigation policies are economically rationale, an individual-based model is developed to study the relative performances of an emission tax, a nitrogen fertilizer tax, and a carbon trading scheme using farm data from the Scottish farm account survey (FAS) and emissions and transaction cost data from literature metadata survey. Model simulations show that none of the three schemes could be considered the most cost effective in all circumstances. The cost effectiveness depends both on the tax rate and the amount of free permits allocated to farmers. However, the emissions trading scheme appears to outperform both other policies in realistic scenarios.

Integrating economic and biophysical data in assessing cost-effectiveness of buffer strip placement.

The European Union Water Framework Directive (WFD) requires Member States to set water quality objectives and identify cost-effective mitigation measures to achieve "good status" in all waters. However, costs and effectiveness of measures vary both within and between catchments, depending on factors such as land use and topography. The aim of this study was to develop a cost-effectiveness analysis framework for integrating estimates of phosphorus (P) losses from land-based sources, potential abatement using riparian buffers, and the economic implications of buffers. Estimates of field-by-field P exports and routing were based on crop risk and field slope classes. Buffer P trapping efficiencies were based on literature metadata analysis. Costs of placing buffers were based on foregone farm gross margins. An integrated optimization model of cost minimization was developed and solved for different P reduction targets to the Rescobie Loch catchment in eastern Scotland. A target mean annual P load reduction of 376 kg to the loch to achieve good status was identified. Assuming all the riparian fields initially have the 2-m buffer strip required by the General Binding Rules (part of the WFD in Scotland), the model gave good predictions of P loads (345-481 kg P). The modeling results show that riparian buffers alone cannot achieve the required P load reduction (up to 54% P can be removed). In the medium P input scenario, average costs vary from £38 to £176 kg P at 10% and 54% P reduction, respectively. The framework demonstrates a useful tool for exploring cost-effective targeting of environmental measures.

A conjoint analysis of landholder preferences for reward-based land-management contracts in Kapingazi watershed, Eastern Mount Kenya.

Unsustainable land-use decisions and agricultural practices have become the key drivers of deteriorating watershed services in developing countries. However, landholders may have little or no incentives to take these impacts into account in their decision-making process. In recent years, reward-based provision of environmental services has emerged as an important market-based incentive for motivating landholders to adopt environmentally friendly land-use changes and agricultural practices. In this regard, for instance, the Pro-Poor Rewards for Environmental Services in Africa (PRESA) project has emerged as a large network to support and facilitate reward mechanisms in Africa. However, in many African rural settings, little is known about landholder attitudes and preferences related to the alternative land-management schemes. Using locally identified sets of six key land-management attributes, this paper applies conjoint methods to evaluate landholder preferences towards alternative land-management schemes aimed at enhancing the provision of watershed services in the River Kapingazi catchment in central Kenya. Data were collected from primary sources through focus groups and a questionnaire based conjoint survey. Three conjoint models were used; a traditional conjoint ratings model, a binary logit model, and an ordered logit model. Results from the focus groups indicated that shortage of water for both domestic use and irrigation was perceived as the most acute environmental problem in the area. Deforestation, poor river bank management and agricultural practices were identified as the major causes of the problem. Results from conjoint models show that the three principal attributes influencing landholder's ratings and probability of adopting the proposed land management options were 'size of land area to be committed', 'length of contract period', and 'granting or prohibiting rights to harvest environmental products from the committed land'. Thus, these attributes should be the focal points in designing land-management contract for watershed services in the study area.

Assessing the sustainability of forest management: an application of multi-criteria decision analysis to community forests in northern Ethiopia.

Continuous deterioration of the natural resource base has become a serious threat to both the ecological systems and economic production in Ethiopia. Many of these problems have been attributed directly or indirectly to the rapid dwindling of the country's forest cover which is associated with unsustainable forest use and management. Closing community woodlands from human and livestock intervention to promote natural regeneration of forests has been one of the environmental restoration strategies pursued in the degraded highland areas of northern Ethiopia. However, local pressure to use reforested community lands for economic benefit has become a major threat to forest sustainability. Using locally identified sets of criteria and indicators for sustainable community forest management, this paper applies a multi-criteria decision analysis tool to evaluate forest management problems in the northern province of Tigray, Ethiopia. Three MCA methods - ranking, pair-wise comparison, and scoring - were used in evaluating the sets of criteria and indicators and alternative forest management scenarios. Results from the study indicate a number of noteworthy points: 1) MCA techniques both for identifying local level sustainability criteria and indicators and evaluating management schemes in a participatory decision environment appear to be effective tools to address local resource management problems; 2) Evaluated against the selected sets of criteria and indicators, the current forest management regime in the study area is not on a sustainable path; 3) Acquainting local people with adequate environmental knowledge and raising local awareness about the long-term consequences of environmental degradation ranked first among the set of sustainability criteria; and 4) In order to harmonize both environmental and economic objectives, the present 'ecological-biased' forest management regime needs to be substituted by an appropriate holistic scheme that takes into account stakeholders' multiple preferences and priority rankings.