July 1st 2014 Economic instruments for agro-environmental measures Lessons learned from Payment for Environmental Services (PES) for NWRM Rob van der Veeren

Rijkswaterstaat 2July 1st 2014 Outline NWRM PES and agriculture Background: Dutch interest in agriculture Need for economic instruments for agri-environmental management Review of Dutch case studies International review Concluding remarks

Rijkswaterstaat 3July 1st 2014 NWRM PES and agriculture NL sees NWRM as an ‘umbrella term’, not as a precisely defined concept. Just as that other buzz word: Ecosystem services Financing opportunities for NWRM may therefore overlap with opportunities for ‘payment for ecosystem services’ (PES) So, may be we can learn from studies on PES?

Rijkswaterstaat 4July 1st 2014 Background: Dutch interest in agriculture Hydromophological changes and diffuse pollution from agriculture are major problems for Water Framework Directive in the Netherlands –Solution: additional measures in agriculture The Netherlands is increasingly threatened by sea level rise, salt intrusion and fresh water allocation problems –Solution: more water storage in rural (agricultural) areas The Netherlands has appointed Natura 2000 areas, but corridors are needed to make them more successful –Solution: more nature corridors in rural (agricultural) areas But imposing additional measures disturbs level playing field (Dutch agriculture obeys Nitrate Directive and other EU legislation) –Solution: innovative economic instruments

Rijkswaterstaat 5July 1st 2014 Wouldn’t it be nice… to have a system which could simultaneously: –Increase water storage capacity of water systems in rural areas –Increase nature corridors along water in rural areas –Decrease agricultural pressures on water (e.g. nutrient emissions) and would be attractive to farmers, because: –They meet requirements of EU legislation (e.g. Nitrate Directive) –Not only get compensated for loss of agricultural production, but are paid for land stewardship/nature conservation

Rijkswaterstaat 6July 1st 2014 Just an idea… Water boards are –responsible for water management in rural areas –Interested in storage capacity, nature corridors and water quality –democraticly chosen (representatives of public interest) –paid by levies from farmers industry inhabitants in same region –Interested in cost-effective measures in the capillaries Could they pay agriculture for agro-environmental measures to increase water storage, prevent flooding, enhance nature? (user pays principle) E.g. by paying farmers for the opportunity to use part of their land to create wet buffer strips Inventory of what happens in the Netherlands and abroad

Rijkswaterstaat 7July 1st 2014 Review of Dutch case studies Inventory of innovative economic instruments to stimulate agricultural water management measures Arrangements are on top of regular ‘catalogue of green blue services’ and other current policies, and voluntary 120 case studies found; are highly diverse in: –Status (research, pilot, formal arrangement) –Spatial scale (local, province, national) –Type of arrangement (advice, technical support) 13 case studies are analysed in more detail g_innovatieve_economische_instrumenten_voor_agrarische_ watermaatregelen_overzicht_van_praktijkstudies_2010.pdf For English version: Please send an

Rijkswaterstaat 8July 1st 2014 General characteristics of payment schemes For initial investment, for maintenance, or for depreciation of value Depending on regional circumstances Most often provinces are involved, or regional water boards Not for ecosystem services No direct link between financing sources (demand) and ecosystem provider (supply)

Rijkswaterstaat 9July 1st 2014 Factors contributing to success: process Acceptance is key. Increases when advisors go to the farm Realistic ambitions (according to farmers) Allow for learning by doing; may result in new innovations Involve farmers when selecting and implementing measures Permanent involvement during implementation: –Courses (compensation for time spent); –Bioassays performed by farmers One stop shop (involve agricultural organisations in this) Short term implementation

Rijkswaterstaat 10July 1st 2014 Factors contributing to success: content Adequate payment Also compensation for maintenance and administration Possibilities for tailor made arrangements (location specific) Arrangement and financing secured for medium term (> 5 years) Arrangement should suit the new CAP requirements No definitive change in land use (agriculture > nature) Multiple ecosystem services can be offered in combination Costs for the payer should not be excessive; combination of objectives can help, since this often means multiple financing sources

Rijkswaterstaat 11July 1st 2014 International review on payment schemes for wet buffer strips Wet buffer strips relevant for the Netherlands (flat country?), but nowhere else Extended scope of study: also include other types of wet zones 11 countries: Austria, Belgium, Denmark, France, Germany, Luxembourg, Netherlands, Norway, Scotland, Sweden, Switzerland General characteristics: voluntary, for investments not for environmental benefits Two main types: –Project based: payment to buy land and for investments –Continuous payments: To keep land converted, paid from EU RDF, some MS pay more when environmental benefits accrue In some cases overcompensation was found to ensure participation

Rijkswaterstaat 12July 1st 2014 Factors contributing to success/failure Compensation less than market conform reduces participation rate Funding should be linked to easily understandable rules and limited administrative burden Stable, long term, trustful funding provided by one office (one stop shop for farmers, also when various organisations are involved) The required shift in practice should not be too drastic Farm specific characteristics are also important: Size and type of farm, age and education of farmer, and full or part-time farming ew_on_payment_schemes_for_wet_buffer_strips_and_other_types_ of_wet_zones_along_privately_owned_land.pdf

Rijkswaterstaat 13July 1st 2014 Concluding remarks Efficiency and effectiveness of instruments depend on: –Tailor made arrangements; no one size fits all –One stop shop; reduction in administrative burden –Trust in stability of longer term arrangement –Fit in CAP and other policies Participation depends on size of payment Current payment schemes pay for measures not for benefits

Rijkswaterstaat 14July 1st 2014 If you have any questions, you know where you can find me…