Modelling the impacts of payments for biodiversity conservation on regional land-use patterns

We present a land-use allocation model that evaluates the impact of payments for ecosystem services such as biodiversity conservation on land-use patterns. In a non-linear optimisation procedure, land use is allocated at farm level, taking into account risk behaviour, and spatial as well as temporal variability of net revenues of land-use alternatives, using a spatial resolution of 29 m x 29 m. The model is applied to a study area of 30 km x 34 km in western Ecuador, considered a hotspot for biodiversity. In this coffee growing region, agroforestry systems with shade-coffee are important for biodiversity conservation at the landscape level, but under pressure due to low revenues. Through scenario analyses, we analyse the effects of price premiums per kg, payments per ha, and price buffering for coffee, as well as incentives leading to coffee yield increases, and payments per ha of forest remnants. We compare different risk aversion levels of the involved agents. We conclude that payments per ha are more efficient to maintain or increase coffee areas than payments per kg. Price buffering may be the most cost-effective way to support coffee production, especially at high-risk aversion levels. Significant yield increases are necessary to make coffee more attractive compared to the other alternatives. Relatively low payments per ha of forest can significantly increase forested land. Risk behaviour turns out to be an important factor when determining the possible effect of payments for ecosystem services. We conclude that the model is a versatile tool to support planning of payments for conserving ecosystems. (c) 2007 Elsevier B.V. All rights reserved.