Agri‐environmental Schemes Require Improved Design for Better Outcomes

SummaryAdvocacy for a shift from an individual farm‐level to a landscape‐level approach in agri‐environmental policy is a focal point in the reform of the Common Agricultural Policy. Such a shift aims to address spatial mismatches between ecological processes and targeted environmental outcomes, and to harness potential ecological gains from spatial coordination. However, there remains limited understanding of how to design effective mechanisms aimed at encouraging coordination among landholders. Do landscape configurations influence the effectiveness of coordination mechanisms? This article aims to assess the effectiveness of alternative coordination mechanisms incorporated in the design of a conservation auction across alternative landscape configurations, that is, in terms of the spatial relationship between some measure of environmental benefit – such as wild bird species diversity – and the profitability of farmland. These mechanisms include landholder‐to‐landholder communication, disclosure of spatial environmental scoring rules, and the Agglomeration Bonus. We used lab experiments to evaluate these options. Our results suggest that there is no panacea for promoting landscape‐level environmental outcomes. Communication proves capable of significantly facilitating coordination, whilst information disclosure policies can serve as an effective coordination mechanism in multiple landscape types. By contrast, the Agglomeration Bonus was only found to effectively promote coordination in a positively correlated landscape type. It leads to lower cost‐effectiveness in all landscape types.