Developing result-orientated payment schemes for environmental services in grasslands: Results from two case studies in North-western Germany

Semi-natural habitats resulting from a long history of traditional low-intensity farming systems have undergone a dramatic decline in both quantity and quality in Europe over the last decades. There is evidence that semi-natural habitats including grasslands play an important role in providing goods and services that are of high value to human society. Preserving species diversity in these agricultural habitats and the services it provides requires compensation payments to farmers through agri-environmental subsidies. Since 1992, Agri-Environmental Schemes (AES) are important components of the second pillar of the Common Agricultural Policy (CAP). In this context, result-orientated payments are a relatively novel approach aiming to provide incentives to conserve semi-natural grasslands. In contrast to action-orientated payments, the subsidy amount is directly linked to the ecological result. Here, we first introduce AES that employ result-orientated payment schemes to conserve agricultural biodiversity. We present results from two case studies in North-western Germany that use vascular plants as indicators for high-value grasslands within a result-orientated payment scheme. The sets of indicators used were defined independently for both case studies, but were generally suitable to identify species-rich grassland communities and proved to be explicable to farmers. Second, we introduce a result-orientated payment scheme that further integrates market mechanisms. In order to improve the cost-effectiveness of AES, a regional market for biodiversity is established by means of an auction-based payment scheme.