PhD - Charlotte Marie Süring

Publicly funded payments for ecosystem services (PES) schemes are an increasingly popular policy approach used to incentivize nature conservation and restoration on private land. Under these schemes, public administrators remunerate private landowners for the voluntary adoption of environmentally beneficial land management practices, or, less commonly, for the delivery of their intended environmental outcomes.

In the latest EU Forest Strategy for 2030, the European Commission explicitly encourages Member States to establish such PES schemes as a means to meet forest conservation and restoration targets set out in policy frameworks at different scales, including the EU’s recently adopted Nature Restoration Regulation.

Given the pressing need for large-scale restoration efforts and the financial resource constraints faced by public administrators, a central concern for such policies is that they are cost-effective: maximizing the environmental outcomes delivered for limited budgets. Past and existing PES schemes have so far been inconsistent in terms of their environmental return on investment. Ensuring that future schemes effectively contribute towards restoration objectives will thus require a better understanding of the conditions that determine scheme success in different contexts.

The PhD thesis explores some of the critical factors that influence the cost-effectiveness of schemes aimed at incentivizing the restoration of biodiversity in European private forests. In particular, it presents empirical evidence from three research papers which collectively elucidate how different scheme design features and contextual conditions affect landowner participation, land enrollment, biodiversity outcomes, information rents, and justified levels of administrative cost in such schemes.

The studies apply choice models, sample selection regressions and policy simulations to large-scale stated preference survey data from Danish and Finnish forest owners to investigate (1) how different contract design features influence the payment rates required for scheme participation by forest owners in different forestry contexts, (2) the conditions determining the relative cost-effectiveness of schemes paying for the adoption of biodiversity-enhancing practices (‘action-based payments’) or for their resulting biodiversity outcomes (‘result-based payments’), and (3) the degree to which different pricing mechanisms overcompensate forest owners in Danish biodiversity PES schemes.

The findings from this work contribute to the ex-ante assessment literature on PES schemes more generally, and, more importantly, offer context-specific insights to guide European policymakers in establishing cost-effective forest biodiversity PES schemes that can play a role in reversing the ongoing biodiversity decline.