Policy design for a multifunctional landscape

• Published in: Regional environmental change Vol. 10; no. 4; pp. 339 - 348
• Main Authors: Gren, Ing-Marie, Svensson, Lisa, Carlsson, Magnus, Bishop, Kevin
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer-Verlag 01.12.2010; Springer; Springer Nature B.V
• Subjects: Agricultural Science; Biodiversity; Catchment areas; Climate Change; Climate Change/Climate Change Impacts; Compensation; Decision making; Earth and Environmental Science; Earth Science with specialization in Environmental Analysis; Economic incentives; Economics and Business; Ecosystem services; Ecosystems; Ekonomi och näringsliv; Environment; Environmental economics; Environmental Sciences related to Agriculture and Land-use; Geography; Geovetenskap med inriktning mot miljöanalys; Jordbruksvetenskap; Land use; Landowners; Landscape Architecture; Landskapsarkitetktur; Miljö- och naturvårdsvetenskap; Nature Conservation; Oceanography; Original Article; Payments; Regional/Spatial Science; Samhällsvetenskap; Social Sciences; Water quality; Sweden; Market and non-market goods; Policies; Arable landscape; Second-best incentive schemes
• ISSN: 1436-3798; 1436-378X; 1436-378X
• DOI: 10.1007/s10113-009-0105-9

Landscapes consisting of several elements, such as wetlands and forests, are multifunctional in nature and produce both market and non-market goods. The need for policies arises from the existence of non-market ecosystem services that are not traded and thereby generally not subject to economic trade-offs in landowner decision making. An efficient incentive scheme for producing both types of goods would require policy designed for each non-market good. However, this may result in high transaction costs, possibly giving second-best solutions a comparative advantage when only one non-market good is regulated. This paper demonstrates that in the Hovran catchment area in mid Sweden, which produces the non-market goods water quality, biodiversity, and scenic beauty, compensation payments for biodiversity production alone provide almost maximum total net value of all market and non-market goods. On the other hand, payments for providing scenic beauty in the form of open landscape may result in lower total net value than no compensation payment at all, due to a negative impact on water quality.