The efficiency of spatial economic incentives in pollination-dependent agricultural systems

Abstract Agriculture is often in conflict with biodiversity conservation, while at the same time depending on the provided ecosystem services (ESS) biodiversity provides. Many of these ESS have a regional scale that extends beyond the local scale of individual farms. This leads to spatial externalities so that the preservation of ESS on one farm benefits neighbouring farms. At the same time, ESS preservation often incurs local costs, creating a trade-off between local costs and regional benefits. In these types of common-resource-management problems, the observed level of biodiversity and ESS is generally below the economically efficient level. A generic spatially explicit agent-based model from literature that focuses on the ESS of pollination is extended to analyse the impact of spatial coordination payments on the land-use dynamics and the regional level of ESS preservation. The economically efficient design that maximises the return (in terms of agricultural profit) on investment (in terms of expenditure for the payments) is determined and analysed as a function of the ecological and economic conditions in the model region.