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Actual provision as an alternative criterion to improve the efficiency of payments for ecosystem services for C sequestration in semiarid vineyards
Agricultural Systems 144 (2016) 58–64
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Agricultural Systems journal homepage: www.elsevier.com/locate/agsy
Actual provision as an alternative criterion to improve the efficiency of payments for ecosystem services for C sequestration in semiarid vineyards Antonino Galati a, Maria Crescimanno a, Luciano Gristina a, Saskia Keesstra b, Agata Novara a,⁎ a b
Department of Agricultural and Forest Sciences, University of Palermo, Viale delle Scienze, Building 4, 90128 Palermo, Italy Soil Physics and Land Management Group, Wageningen University, Droevendaalsesteeg 4, 6708PB Wageningen, The Netherlands
a r t i c l e
i n f o
Article history: Received 21 December 2015 Received in revised form 3 February 2016 Accepted 9 February 2016 Available online xxxx Keywords: Soil carbon stock Ecosystem service payments criteria Mediterranean environment Agro-environmental measures
a b s t r a c t The aim of this paper is to evaluate the efficiency of the PES scheme actually used in the Sicilian rural development program, based on an egalitarian criterion, and proposing an alternative scheme in order to guarantee a greater equity and fairness of premium distribution in relation to soil carbon (C) sequestration potential. We, first, assessed the ecosystem services (ES) provided by agri-environmental measures (AEM) in terms of SOC stock increase in Sicilian vineyards. Based on these data we evaluated the efficiency of agro-environmental payments according to an egalitarian criterion and simulated the effects of the actual provision criterion adoption. Results showed that the adoption of an egalitarian criterion generates an inequitable distribution of agri-environmental payments, which could potentially be mitigated by a scheme such as actual provision. The latter, indeed, leads to a greater efficiency in the distribution of financial resources among land users and offers a higher premium to land users that, by adopting an agroenvironmental practice, contribute to increase soil C sequestration. © 2016 Elsevier Ltd. All rights reserved.
1. Introduction Over the last few years, payments for ecosystem services (PES) have increasingly attracted attention among academics and stakeholders as efficient tools to improve the development of environmental conservation (Papanastasis et al., 2015; Smith et al., 2015; Zhang et al., 2013). PES are a market-based instrument to internalize the benefits provided by natural capital, creating a market for these environmental services (a reasonable price for the services offered) or at least to cover the potential costs associated with land management changes, providing the same environmental services (Pascual et al., 2010; Kemkes et al., 2010; Pagiola and Platais, 2007). The rationale for the PES scheme can be based on two complementary arguments that are related, respectively, to (i) the benefits, that owners lose as a result of unsustainable use of land, and (ii) proactive conservation activities, needed to maintain a steady flow of one or more environmental services (García-Amado et al., 2011; Engel et al., 2008; Wunder, 2005). Among PES definitions in economic literature, the most popular has been proposed by Wunder (2005) according to which it is a voluntary transaction in which a well-defined environmental service (or a land use likely to secure that service) is being ‘bought’ by a (minimum of one) buyer from (a minimum of one) provider, if and only if the ⁎ Corresponding author. E-mail addresses: [email protected] (A. Galati), [email protected] (M. Crescimanno), [email protected] (L. Gristina), [email protected] (S. Keesstra), [email protected] (A. Novara).
http://dx.doi.org/10.1016/j.agsy.2016.02.004 0308-521X/© 2016 Elsevier Ltd. All rights reserved.
provider continuously secures the provision of the service (conditionality). The definition proposed by Wunder has been widely criticized both for being too narrow and thus excluding many payment schemes that do not comply with these criteria (Schomers and Matzdorf, 2013) and for the several shortcomings arising from the attempt to implement the Coase theorem in PES (Muradian et al., 2010). Considering the public nature of most PES, Muradian et al. (2010) redefine PES as a transfer of resources among social actors, which aims to create incentives to align individual and/or collective land use decisions with the social interest in the management of natural resources. More recently, Tacconi (2012) elaborated a definition of a PES scheme that as suggested by the same author is more broader than Wunder's and more specific than that suggested by Muradian et al. (2010). It takes into account the criteria of conditionality, additionality and transparency. In particular, the authors define the PES scheme as a transparent system for additional provision of environmental services through conditional payments to voluntary providers. The two most often discussed issues regarding the PES are their efficiency and equity, although these issues have been treated almost exclusively from a theoretical and conceptual point of view. As suggested by Engel et al. (2008), a fundamental condition for PES to be considered efficient is that buyers, especially if they are service users, pay the opportunity cost of the lost benefits, being otherwise socially inefficient (Engel et al., 2008; García-Amado et al., 2011). However, as noted by Pascual et al. (2010) the PES efficiency is not easy to measure or demonstrate, because the contexts in which the PES scheme operates are characterized by high uncertainty in environmental additionality (the
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real contribution in terms of ecosystem benefits brought through the implementation of this market instrument). An additional complicating factor is that the ecosystem services result from complex ecological processes and are a function of many biotic and abiotic components over a wide range of spatial–temporal scales. In addition, the evaluation of the efficiency of a PES should imply a comparison between alternative policy instruments in order to compare the costs of achieving the same results using the two approaches (Ferraro and Simpson, 2002). As demonstrated by Pascual et al. (2010) the efficiency of PES is closely interdependent with the equity effects meant both as procedural justice and as distributive justice (Corbera et al., 2007). With specific reference to the latter, Konow (2003) states that the accountability principles should guide the choice of a fair distribution of the PES. According to this principle the premium should be distributed in accordance with a recipient's inputs in order to ensure equity. A wide variety of payment schemes and fairness criteria have been implemented to provide ecosystem services. Pascual et al. (2010) identify seven fairness criteria for PES programs (compensation, common goods, egalitarian, maximin, actual provision, expected provision, status quo) all equally justified in ethical and operational terms, in relation to the context in which they are applied. Studies on PES have mainly focused on either the impact of PES schemes implemented in the rural development programs, analyzing specific case studies, or on general discussions on theoretical and conceptual approaches. Our study aims to overtake this gap evaluating the efficiency of the PES scheme actually used in the Sicilian rural development program and proposing an alternative scheme for agro-environmental payments in order to guarantee a greater equity and fairness in the distribution of the premium in relation to soil carbon (C) sequestration potential. To validate the proposed approach we consider the case of direct payments provided by the Rural Development Program 2007–2013, Axe 2, Action 214/1A “Eco-sustainable management methods” to Sicilian farmers who decided to voluntarily adopt production methods that are more respectful of natural resources. In particular, this measure was adopted with the aim of encouraging soil protection from erosion and degradation, as well as the prevention of organic matter decline. As we all know, one of the main problems of unsustainable agricultural production systems is soil degradation due to the loss of organic matter. The loss of soil organic carbon (SOC) is affected by soil and climatic characteristics, management practices, land use and (Novara et al., 2013, 2014; Lal, 2004) entails a decrease of soil fertility, water retention and plant production in terrestrial ecosystems. Consequently, changes in land use and in particular the adoption of soil management practices that reduce soil disturbance and increase the input and stabilization of organic matter can contribute to increase the amount of SOC stored and with that control the level of CO2 fluxes to the atmosphere (Behera and Shukla, 2015; Bruun et al., 2015; de Moraes Sá et al., 2015; Parras-Alcántara et al., 2015; Batjes, 2014; Debasish et al., 2014; Jaiarree et al., 2014; Fialho and Zinn, 2014; Lozano-García and Parras-Alcántara, 2014; Srinivasarao et al., 2014; Antle et al., 2007; Pendell et al., 2007; Lal, 2004; Sperow et al., 2003; Paustian et al., 2001). In the global C context, SOC sequestration in soils may play a significant role, in mitigation of greenhouse gas (GHC) emissions (Bruce et al., 1999; Sperow et al., 2003) and soil fertility improvement. Furthermore, the potential of soil to sequester C depends on biogeochemical aspects including evapotranspiration, vegetation cover and the soil's ability to retain organic carbon (Grace et al., 2012; Lal et al., 2007; Grace et al., 2006; Tschakert, 2004; VandenBygaart et al., 2003). Therefore, it will be evident that the adoption of a PES scheme that takes into account the real contribution of land users or owners in ecosystem services terms, is essential to address farmers to sustainable production. In this study we assessed the ecosystem services (ES) provided by agri-environmental measures (AEM) in terms of SOC stock increase in Sicilian vineyards. Based on these data we first evaluated the efficiency of agro-environmental payments according to an egalitarian criterion,
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according to which there is an equal distribution of incentives among all providers independently of the level of environmental service provision, and simulated the effects of the actual provision criterion adoption, where payments are differentiated according to the actual provision of the service. Secondly, a comparison between these two schemes was carried out to assess the potential of PES schemes in a Mediterranean agricultural setting. 2. Material and methods 2.1. Case study The study area is located in southern Sicily in a semiarid vineyard area. In a “utilized agricultural area” (UAA) of which 11,588 ha, 35.5% is devoted to vineyard cultivation, 32.2% is arable land, and 11.1% is planted with an olive grove. The mean annual precipitation is 516 mm. Rainfall is highest in October (monthly mean rainfall of 81 mm) and lowest in July (monthly mean rainfall of 2 mm). On average, 3% of the mean annual rainfall falls in summer (June, July, and August) while 42% falls in November, December, and January. The mean annual temperature is 18 °C; the hottest months are July and August (monthly means of 25 °C), and the coldest months are January and February (monthly means of 11 °C). Meteorological data from the Sciacca weather station were used. Vineyards in Sicily are commonly managed with conventional tillage (CT, at least five shallow tillages per year) to control weeds and reduce water competition. Recently, alternative soil management in vineyards is adopted by farmers thanks to agri-environmental measures (AEM) and coincide with the increasing interest of wine producers for more sustainable production in order to satisfy a growing demand for more sustainable wines (Giacomarra et al., 2016; Crescimanno et al., 2014; Crescimanno and Galati, 2014). The AEM management strategies usually implemented in Sicilian vineyards involve annual cover cropping using legumes like faba bean (Vicia faba) and vetch (Vicia sativa). Cover crops are disked into the soil in spring, and after that, vineyards are subjected to two shallow tillages to reduce soil water transpiration. 2.2. The agri-environmental payments The agri-environmental payments are one of the most important tools of the EU policies implemented in the rural development programs (RDP) of the EU member states in order to improve environmental sustainability. As reported in the Council Regulation (EC) No. 1698/ 2005, the purpose of the agri-environment payments is to ‘further encourage farmers and other land managers to serve society as a whole by introducing or continuing to apply agricultural production methods compatible with the protection and improvement of the environment, the landscape and its features, natural resources, the soil and genetic diversity’.1 In accordance with the provisions of article 15 of Regulation (EC) No. 1698/2005, the Rural Development Program (RDP) of Sicily for the period 2007–2013 was approved by the European Commission (Decision EC 735 of 18/02/2008). Axe 2 of the RDP 2007–2013 called “Improving the environment and the countryside” includes agricultural measure 214: “Agri-environment payments” addressed to ensure a sustainable use of agricultural land through the adoption of agricultural production methods and sustainable land management. The action 214/1A, one of the five actions included in the sub-measure 214/A, provides a premium, in the form of direct payment, for farms that adopt eco-sustainable methods. This is an equal payment per hectare independently of the level and costs of environmental service provided (egalitarian fairness criterion). The amount of the payment, which is 1 Recital 35 of Council Regulation (EC) No. 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJ L 277, 21.10.2005, p. 1).
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explained in Annex 1 “Payment justification” of the RDP, is determined by taking into account the income loss resulting from the adoption of eco-sustainable practices which entail an increase of specific costs and a reduction in yields of crops. For the 2007–2013 period, the measure 214/1A was implemented on 35,889 ha in Sicily, of which 39.5% are areas under vines. In terms of expenditure for the whole period, in accordance with the system, public spending on integrated production (which includes the measure 214/1A) was 37.7 million euro, which equals 12.4% of public spending for agri-environmental measures, in addition to 12.2 million euro for new contracts (Regione Siciliana, RAE, 2014). The 214/1A measure provides a payment per hectare and per year, which is variable in relation to the crop type and ranges from 90 euro for forage crops to a maximum value of 600 euro for orchards. For vineyard areas, the payment is 450 euro per hectare per year. 2.3. Carbon budget for ecosystem service (ES) evaluation In order to evaluate the ecosystem services (ES) in terms of C sequestration an assessment of the changes in the C budget, following the application of AEM, was carried out. One hundred paired sites were chosen in the study area to compare the SOC increase and loss due to water erosion after 5 years of management with AEM vs. CT (Novara et al., 2012). The plots at each pair of sites (one plot per site) were similar with respect to soil type, slope, elevation, exposure, and drainage. V. faba was used as a cover crop in the AEM plots. The cover crop each year was seeded in October and plowed into the soil in April. Three soil samples were collected at 0–15 cm depth in each plot after 5 years since AEM application. The soil was dried and passed through a 2-mm sieve before SOC was measured according to the Walkley and Black (1934) method. The SOC content, measured as a percentage, was converted to Mg per hectare using the soil depth and the bulk density, which was measured using the volume of the collected sample and the weight of dry soil in the sample (Blake and Hartge, 1986). The loss of C through soil sediments (Closssediment) was estimated with the following linear relationship: Closssediment ¼ SE SOC
ð1Þ
where SOC is the content of organic C in soil (%), and SE is the soil erosion rate (Mg ha−1 year−1). The soil erosion (SE) (Mg ha− 1 year− 1) was estimated with the USLE equation: SE ¼ K R LS P
ð2Þ
where, K is the soil erodibility factor (Mg ha h MJ−1 ha−1 mm−1) calculated according Wischmeier and Smith (1978), R is the rainfall factor (MJ mm ha−1 h−1 year−1), LS is the topographic factor, P is the support practice and C is the C-factor. Data for soil texture and digital elevation model (DEM) were obtained from the regional government (Banca dati geografica dei suoli della Sicilia del Dipartimento Agricoltura dell'Assessorato Agricoltura, Sviluppo rurale e Pesca mediterranea — Regione Siciliana). 2.4. Agro-environmental payments efficiency in the case of the adoption of the egalitarian criterion The agro-environmental payments were distributed in the framework of the Sicilian rural development program for the period 2007– 2013 among beneficiaries using an egalitarian fairness criterion. These payments were evaluated through data acquisition on environmental benefits and the total budget invested in the study area. To calculate the efficiency (EPES) for a given farm we used the difference of SOC (ΔSOC) between AEM and CT after 5 years of AEM
application and the PES value (the amount of payments received by the farmers in 5 years). EPES ¼
PES ΔSOC
ð3Þ
EPES indicates the value of PES invested to sequester a unit of SOC (€ Mg C−1 ha−1). In the considered study area, the average efficiency (AEPES) is: AEPES ¼
Total Budget ΔSOCtot
ð4Þ
where ΔSOCtot is the provided ecosystem service in the study area and the total budget is the total of incentives invested by governmental region relative to the study area. The comparison among EPES of each farm and the AEPES provides information on the efficiency of the previous PES scheme, highlighting which farmers received higher or lower payments in relation to the real ES provided. 2.5. Redistribution of the total budget in relation to real ES According to the actual provision criterion, the new payment for each farm was designed taking into account the previous experience of the variation of SOC sequestration in relation to the environment and the original, pre-treatment SOC content under CT. New Payment ¼
EPES PES AEPES
ð5Þ
replacing EPES with Eq. (1) and AEPES with Eq. (2), follows: New Payment ¼
ΔSOC ΔSOCtot : Total Budget
ð6Þ
3. Results and discussion 3.1. Ecosystem service Five years after the application of AEM, on average (100 plots), the SOC stock increased in the AEM plots. The increase in SOC stock was significantly affected by the SOC content that was present in the soil when it was still under CT, decreasing in the case the CT soils had higher SOC values. The increase ranged between 0 Mg ha−1 in the plot with a SOC under CT higher than 25 Mg ha− 1 to 10.7 Mg ha− 1 in soil with 17 Mg ha−1 of SOC content under CT (Fig. 1). The C sequestration rate was low in comparison to other results recorded in a similar semiarid environment (Márquez-García et al., 2013; Ruiz-Colmenero et al., 2013). The OC losses were generally higher under CT due to higher erosion rates, with a lower C content in soil (Fig. 2). The highest erosion rates are mainly the result of poor land cover (c-factor) (Novara et al., 2011). The overall C budget (SOC–OC loss) increased in the five years of AEM treatment (Fig. 3). The C under AEM increased up to 90% in comparison to CT. However, there was no C increase recorded in the paired site where the original C values were higher than 26 Mg ha−1, which is indicated by the point where the logarithmic trend line in Fig. 3 crosses the x axis. This point can be considered the steady state limit of C accumulation, even when the site is under conservation practices. These results showed that the benefits of AEM measures are site specific and that in Mediterranean area C stock is not linearly correlated with input increase, but has a maximum steady state level to which the C stock can rise.
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Fig. 1. Soil organic carbon (SOC) after the application of the AEM measure. Each dot represents one paired site.
3.2. Egalitarian versus actual provision criterion The volume of C sequestered in the soil after five years of AEM adoption has been linked with the value for each unit of C (€ per unit of ΔSOC), by calculating from the ratio between the total value of the payments obtained by the farmers in these five years (according to the 214/1A measure) and the volume of C sequestered (Eq. (4)). This ratio shows that between the two variables an exponential negative distribution exists (Fig. 4). The decrease of C values with increasing SOC stocks showed that the adoption of an egalitarian fairness criterion, like the one adopted in the Sicilian rural development program for agro-environmental payments, leads to an unfair distribution of premium. In other words, according to this criterion the premium did not depend on the provided ecosystem services. Indeed, land users that, through the adoption of an AEM, sequester larger amounts of C, will receive for each unit of C sequestered a much lower premium than the premium received by farmers who stored smaller amounts of SOC. This is due to the adoption of a constant value of the payments, independently of ES provided. In our case study, the C value (€ C Mg−1) ranged from 5170.6 € C Mg−1 for land users who produced low C sequestration levels (0.46 C Mg ha−1), to 406.7 € C Mg−1 for land users who produced
high C sequestration levels (5.6 C Mg ha−1) (Fig. 4). The wide variability of the C value was caused by the high range of C sequestered as a result of the variability of soil properties under a specific AEM strategy and specific location. However, the C value always had positive values because it was not calculated for farms which had reached the C saturation level. Hypothesizing the adoption of the actual provision criterion (Fig. 5), the premium is linearly correlated to the SOC sequestered (environmental service provision), showing that the higher the C sequestered is, the greater the premium paid to farmers that voluntarily intend to participate in AEM. If this criterion is adopted, the C value is constant and in our case study amounts to 646.52 € Mg−1. This value was estimated using previous experiences and therefore is determined by the average soil C sequestration rate in the study area and by the payment provided in the 2007–2013 RDP. The value is estimated taking into account the loss of income resulting from the adoption of the ecosustainable practices, which could entail an increase of specific costs and a reduction in yields of crops. Knowledge on potential soil C sequestration, which depends on the C initial content (C content under CT management) permits to calculate future payment in relation to the expected ecosystem service, according to Eq. (1) that takes the ability of
Fig. 2. Cumulative (5 years) organic carbon loss under AEM (red bullets) and CT (green bullets) soil management. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)
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Fig. 3. C sequestration of AEM soil management vs. CT. Each dot represents a paired site.
the soil to sequester carbon into account. Faced with the impossibility of determining the value of the C on the basis of volume sequestered, we can use the current international market value of C per tonne, or alternatively, the value of carbon obtained using a replacement cost method. In Fig. 5 the blue line shows a positive relationship between SOC sequestered, or ES provision, and value of payment provided by the land users. In particular, this premium ranged from 298.8€ with 0.46 Mg ha−1 C sequestered after five years of AEM adoption, to 3593.7€ with 5.6 Mg ha−1 of C sequestered. The red line, instead, identifies the total amount of agro-environmental payments as expected by the measure 214/1A using the egalitarian fairness criterion. The intersection of the two lines allows to distinguish clearly, on one hand, the land users who have benefited from a higher premium than their contribution, in terms of C sequestration (from 0.5 to 3.5 C Mg h−1), through the adoption of agro-environmental practice. On the other hand, land users who received a lower premium compared to their real contribution in terms of ecosystem service (from 3.5 to 5.5 of C sequestered in the soil). A comparison between the actual provision and the egalitarian criterion, with specific reference to the 214/1A measure of the Sicilian RDP
2007–2013, shows the unfairness of the agro-environmental payments among farmers in the studied area. 4. Conclusions and further research Our study aimed to verify the efficiency of the PES scheme adopted in the framework of rural development policy in Sicily. Our study focused on the agri-environmental measure 214/1A adopted by many entrepreneurs in the wine-growing Sicilian region, in terms of equitable distribution of financial resources. In particular, the study compares the criterion adopted (egalitarian criterion), with the actual provision criterion where the premium is linearly correlated to the environmental service provided. The payment scheme currently adopted in the framework of rural development policy provides an equal premium per hectare for land users independently by the ecosystem services provided (in terms of soil C sequestered). The results show that there is an inequitable distribution of agri-environmental payments, which could potentially be mitigated by a scheme such as actual provision. This study which is based
Fig. 4. Value of carbon in relation to the SOC sequestered.
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Fig. 5. Comparison between egalitarian and actual provision criteria.
on empirical data demonstrates that the adoption of an actual provision criterion leads to a greater efficiency in the distribution of financial resources among land users. It offers a higher premium to land users that by adopting an agro-environmental practice, contribute to increase soil C sequestration. When C steady state occurs, a specific payment should be considered in order to maintain the sequestered SOC stock. Such payment is aimed to avoid C loss due to erosion and therefore it could be assessed according to Galati et al. (2015). Our findings have some implication for both land users and decision makers. In the case of land users, one of the main problems related to the adoption of the proposed criterion in the rural development program and for agri-environmental payments in particular, is that the entrepreneurs who make a minimum contribution in terms of soil C sequestration will not have the interest to participate in this measure. This is because the initial C stock was high in the case of these farmers and because the adopted agro-environmental practice did not produce very positive further effects. This would mean a reduction of soil C sequestration in the area as a whole. However, in these cases, the adoption of a premium for the maintenance of C stocks in the soil could prevent a change in business decisions. From the point of view of the policy makers, the introduction of the ES approach and consequently the adoption of an actual provision criterion could contribute to rationalize the financial resources making them more equitable and justifiable, among European citizens. The empirical analysis of the efficiency of the distribution of agroenvironmental payments, as proposed in this paper should be accompanied by a direct survey addressing the land users aimed at acquiring information related to the minimum level of premium below which these land users would not be willing to participate in the measure. The main limitation of the study is the single agro-environmental measure studied. However, the proposed method could be adopted to other agro-environmental scenarios that involve C sequestration. From this point of view, it is desirable that regions determine the potential of C sequestration in their soils and under their climate conditions. These data can be used for a more equitable distribution of agrienvironmental payments and for an effective use of financial resources deployed in the framework of rural development policies.
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Contents lists available at ScienceDirect
Agricultural Systems journal homepage: www.elsevier.com/locate/agsy
Actual provision as an alternative criterion to improve the efficiency of payments for ecosystem services for C sequestration in semiarid vineyards Antonino Galati a, Maria Crescimanno a, Luciano Gristina a, Saskia Keesstra b, Agata Novara a,⁎ a b
Department of Agricultural and Forest Sciences, University of Palermo, Viale delle Scienze, Building 4, 90128 Palermo, Italy Soil Physics and Land Management Group, Wageningen University, Droevendaalsesteeg 4, 6708PB Wageningen, The Netherlands
a r t i c l e
i n f o
Article history: Received 21 December 2015 Received in revised form 3 February 2016 Accepted 9 February 2016 Available online xxxx Keywords: Soil carbon stock Ecosystem service payments criteria Mediterranean environment Agro-environmental measures
a b s t r a c t The aim of this paper is to evaluate the efficiency of the PES scheme actually used in the Sicilian rural development program, based on an egalitarian criterion, and proposing an alternative scheme in order to guarantee a greater equity and fairness of premium distribution in relation to soil carbon (C) sequestration potential. We, first, assessed the ecosystem services (ES) provided by agri-environmental measures (AEM) in terms of SOC stock increase in Sicilian vineyards. Based on these data we evaluated the efficiency of agro-environmental payments according to an egalitarian criterion and simulated the effects of the actual provision criterion adoption. Results showed that the adoption of an egalitarian criterion generates an inequitable distribution of agri-environmental payments, which could potentially be mitigated by a scheme such as actual provision. The latter, indeed, leads to a greater efficiency in the distribution of financial resources among land users and offers a higher premium to land users that, by adopting an agroenvironmental practice, contribute to increase soil C sequestration. © 2016 Elsevier Ltd. All rights reserved.
1. Introduction Over the last few years, payments for ecosystem services (PES) have increasingly attracted attention among academics and stakeholders as efficient tools to improve the development of environmental conservation (Papanastasis et al., 2015; Smith et al., 2015; Zhang et al., 2013). PES are a market-based instrument to internalize the benefits provided by natural capital, creating a market for these environmental services (a reasonable price for the services offered) or at least to cover the potential costs associated with land management changes, providing the same environmental services (Pascual et al., 2010; Kemkes et al., 2010; Pagiola and Platais, 2007). The rationale for the PES scheme can be based on two complementary arguments that are related, respectively, to (i) the benefits, that owners lose as a result of unsustainable use of land, and (ii) proactive conservation activities, needed to maintain a steady flow of one or more environmental services (García-Amado et al., 2011; Engel et al., 2008; Wunder, 2005). Among PES definitions in economic literature, the most popular has been proposed by Wunder (2005) according to which it is a voluntary transaction in which a well-defined environmental service (or a land use likely to secure that service) is being ‘bought’ by a (minimum of one) buyer from (a minimum of one) provider, if and only if the ⁎ Corresponding author. E-mail addresses: [email protected] (A. Galati), [email protected] (M. Crescimanno), [email protected] (L. Gristina), [email protected] (S. Keesstra), [email protected] (A. Novara).
http://dx.doi.org/10.1016/j.agsy.2016.02.004 0308-521X/© 2016 Elsevier Ltd. All rights reserved.
provider continuously secures the provision of the service (conditionality). The definition proposed by Wunder has been widely criticized both for being too narrow and thus excluding many payment schemes that do not comply with these criteria (Schomers and Matzdorf, 2013) and for the several shortcomings arising from the attempt to implement the Coase theorem in PES (Muradian et al., 2010). Considering the public nature of most PES, Muradian et al. (2010) redefine PES as a transfer of resources among social actors, which aims to create incentives to align individual and/or collective land use decisions with the social interest in the management of natural resources. More recently, Tacconi (2012) elaborated a definition of a PES scheme that as suggested by the same author is more broader than Wunder's and more specific than that suggested by Muradian et al. (2010). It takes into account the criteria of conditionality, additionality and transparency. In particular, the authors define the PES scheme as a transparent system for additional provision of environmental services through conditional payments to voluntary providers. The two most often discussed issues regarding the PES are their efficiency and equity, although these issues have been treated almost exclusively from a theoretical and conceptual point of view. As suggested by Engel et al. (2008), a fundamental condition for PES to be considered efficient is that buyers, especially if they are service users, pay the opportunity cost of the lost benefits, being otherwise socially inefficient (Engel et al., 2008; García-Amado et al., 2011). However, as noted by Pascual et al. (2010) the PES efficiency is not easy to measure or demonstrate, because the contexts in which the PES scheme operates are characterized by high uncertainty in environmental additionality (the
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real contribution in terms of ecosystem benefits brought through the implementation of this market instrument). An additional complicating factor is that the ecosystem services result from complex ecological processes and are a function of many biotic and abiotic components over a wide range of spatial–temporal scales. In addition, the evaluation of the efficiency of a PES should imply a comparison between alternative policy instruments in order to compare the costs of achieving the same results using the two approaches (Ferraro and Simpson, 2002). As demonstrated by Pascual et al. (2010) the efficiency of PES is closely interdependent with the equity effects meant both as procedural justice and as distributive justice (Corbera et al., 2007). With specific reference to the latter, Konow (2003) states that the accountability principles should guide the choice of a fair distribution of the PES. According to this principle the premium should be distributed in accordance with a recipient's inputs in order to ensure equity. A wide variety of payment schemes and fairness criteria have been implemented to provide ecosystem services. Pascual et al. (2010) identify seven fairness criteria for PES programs (compensation, common goods, egalitarian, maximin, actual provision, expected provision, status quo) all equally justified in ethical and operational terms, in relation to the context in which they are applied. Studies on PES have mainly focused on either the impact of PES schemes implemented in the rural development programs, analyzing specific case studies, or on general discussions on theoretical and conceptual approaches. Our study aims to overtake this gap evaluating the efficiency of the PES scheme actually used in the Sicilian rural development program and proposing an alternative scheme for agro-environmental payments in order to guarantee a greater equity and fairness in the distribution of the premium in relation to soil carbon (C) sequestration potential. To validate the proposed approach we consider the case of direct payments provided by the Rural Development Program 2007–2013, Axe 2, Action 214/1A “Eco-sustainable management methods” to Sicilian farmers who decided to voluntarily adopt production methods that are more respectful of natural resources. In particular, this measure was adopted with the aim of encouraging soil protection from erosion and degradation, as well as the prevention of organic matter decline. As we all know, one of the main problems of unsustainable agricultural production systems is soil degradation due to the loss of organic matter. The loss of soil organic carbon (SOC) is affected by soil and climatic characteristics, management practices, land use and (Novara et al., 2013, 2014; Lal, 2004) entails a decrease of soil fertility, water retention and plant production in terrestrial ecosystems. Consequently, changes in land use and in particular the adoption of soil management practices that reduce soil disturbance and increase the input and stabilization of organic matter can contribute to increase the amount of SOC stored and with that control the level of CO2 fluxes to the atmosphere (Behera and Shukla, 2015; Bruun et al., 2015; de Moraes Sá et al., 2015; Parras-Alcántara et al., 2015; Batjes, 2014; Debasish et al., 2014; Jaiarree et al., 2014; Fialho and Zinn, 2014; Lozano-García and Parras-Alcántara, 2014; Srinivasarao et al., 2014; Antle et al., 2007; Pendell et al., 2007; Lal, 2004; Sperow et al., 2003; Paustian et al., 2001). In the global C context, SOC sequestration in soils may play a significant role, in mitigation of greenhouse gas (GHC) emissions (Bruce et al., 1999; Sperow et al., 2003) and soil fertility improvement. Furthermore, the potential of soil to sequester C depends on biogeochemical aspects including evapotranspiration, vegetation cover and the soil's ability to retain organic carbon (Grace et al., 2012; Lal et al., 2007; Grace et al., 2006; Tschakert, 2004; VandenBygaart et al., 2003). Therefore, it will be evident that the adoption of a PES scheme that takes into account the real contribution of land users or owners in ecosystem services terms, is essential to address farmers to sustainable production. In this study we assessed the ecosystem services (ES) provided by agri-environmental measures (AEM) in terms of SOC stock increase in Sicilian vineyards. Based on these data we first evaluated the efficiency of agro-environmental payments according to an egalitarian criterion,
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according to which there is an equal distribution of incentives among all providers independently of the level of environmental service provision, and simulated the effects of the actual provision criterion adoption, where payments are differentiated according to the actual provision of the service. Secondly, a comparison between these two schemes was carried out to assess the potential of PES schemes in a Mediterranean agricultural setting. 2. Material and methods 2.1. Case study The study area is located in southern Sicily in a semiarid vineyard area. In a “utilized agricultural area” (UAA) of which 11,588 ha, 35.5% is devoted to vineyard cultivation, 32.2% is arable land, and 11.1% is planted with an olive grove. The mean annual precipitation is 516 mm. Rainfall is highest in October (monthly mean rainfall of 81 mm) and lowest in July (monthly mean rainfall of 2 mm). On average, 3% of the mean annual rainfall falls in summer (June, July, and August) while 42% falls in November, December, and January. The mean annual temperature is 18 °C; the hottest months are July and August (monthly means of 25 °C), and the coldest months are January and February (monthly means of 11 °C). Meteorological data from the Sciacca weather station were used. Vineyards in Sicily are commonly managed with conventional tillage (CT, at least five shallow tillages per year) to control weeds and reduce water competition. Recently, alternative soil management in vineyards is adopted by farmers thanks to agri-environmental measures (AEM) and coincide with the increasing interest of wine producers for more sustainable production in order to satisfy a growing demand for more sustainable wines (Giacomarra et al., 2016; Crescimanno et al., 2014; Crescimanno and Galati, 2014). The AEM management strategies usually implemented in Sicilian vineyards involve annual cover cropping using legumes like faba bean (Vicia faba) and vetch (Vicia sativa). Cover crops are disked into the soil in spring, and after that, vineyards are subjected to two shallow tillages to reduce soil water transpiration. 2.2. The agri-environmental payments The agri-environmental payments are one of the most important tools of the EU policies implemented in the rural development programs (RDP) of the EU member states in order to improve environmental sustainability. As reported in the Council Regulation (EC) No. 1698/ 2005, the purpose of the agri-environment payments is to ‘further encourage farmers and other land managers to serve society as a whole by introducing or continuing to apply agricultural production methods compatible with the protection and improvement of the environment, the landscape and its features, natural resources, the soil and genetic diversity’.1 In accordance with the provisions of article 15 of Regulation (EC) No. 1698/2005, the Rural Development Program (RDP) of Sicily for the period 2007–2013 was approved by the European Commission (Decision EC 735 of 18/02/2008). Axe 2 of the RDP 2007–2013 called “Improving the environment and the countryside” includes agricultural measure 214: “Agri-environment payments” addressed to ensure a sustainable use of agricultural land through the adoption of agricultural production methods and sustainable land management. The action 214/1A, one of the five actions included in the sub-measure 214/A, provides a premium, in the form of direct payment, for farms that adopt eco-sustainable methods. This is an equal payment per hectare independently of the level and costs of environmental service provided (egalitarian fairness criterion). The amount of the payment, which is 1 Recital 35 of Council Regulation (EC) No. 1698/2005 of 20 September 2005 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) (OJ L 277, 21.10.2005, p. 1).
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explained in Annex 1 “Payment justification” of the RDP, is determined by taking into account the income loss resulting from the adoption of eco-sustainable practices which entail an increase of specific costs and a reduction in yields of crops. For the 2007–2013 period, the measure 214/1A was implemented on 35,889 ha in Sicily, of which 39.5% are areas under vines. In terms of expenditure for the whole period, in accordance with the system, public spending on integrated production (which includes the measure 214/1A) was 37.7 million euro, which equals 12.4% of public spending for agri-environmental measures, in addition to 12.2 million euro for new contracts (Regione Siciliana, RAE, 2014). The 214/1A measure provides a payment per hectare and per year, which is variable in relation to the crop type and ranges from 90 euro for forage crops to a maximum value of 600 euro for orchards. For vineyard areas, the payment is 450 euro per hectare per year. 2.3. Carbon budget for ecosystem service (ES) evaluation In order to evaluate the ecosystem services (ES) in terms of C sequestration an assessment of the changes in the C budget, following the application of AEM, was carried out. One hundred paired sites were chosen in the study area to compare the SOC increase and loss due to water erosion after 5 years of management with AEM vs. CT (Novara et al., 2012). The plots at each pair of sites (one plot per site) were similar with respect to soil type, slope, elevation, exposure, and drainage. V. faba was used as a cover crop in the AEM plots. The cover crop each year was seeded in October and plowed into the soil in April. Three soil samples were collected at 0–15 cm depth in each plot after 5 years since AEM application. The soil was dried and passed through a 2-mm sieve before SOC was measured according to the Walkley and Black (1934) method. The SOC content, measured as a percentage, was converted to Mg per hectare using the soil depth and the bulk density, which was measured using the volume of the collected sample and the weight of dry soil in the sample (Blake and Hartge, 1986). The loss of C through soil sediments (Closssediment) was estimated with the following linear relationship: Closssediment ¼ SE SOC
ð1Þ
where SOC is the content of organic C in soil (%), and SE is the soil erosion rate (Mg ha−1 year−1). The soil erosion (SE) (Mg ha− 1 year− 1) was estimated with the USLE equation: SE ¼ K R LS P
ð2Þ
where, K is the soil erodibility factor (Mg ha h MJ−1 ha−1 mm−1) calculated according Wischmeier and Smith (1978), R is the rainfall factor (MJ mm ha−1 h−1 year−1), LS is the topographic factor, P is the support practice and C is the C-factor. Data for soil texture and digital elevation model (DEM) were obtained from the regional government (Banca dati geografica dei suoli della Sicilia del Dipartimento Agricoltura dell'Assessorato Agricoltura, Sviluppo rurale e Pesca mediterranea — Regione Siciliana). 2.4. Agro-environmental payments efficiency in the case of the adoption of the egalitarian criterion The agro-environmental payments were distributed in the framework of the Sicilian rural development program for the period 2007– 2013 among beneficiaries using an egalitarian fairness criterion. These payments were evaluated through data acquisition on environmental benefits and the total budget invested in the study area. To calculate the efficiency (EPES) for a given farm we used the difference of SOC (ΔSOC) between AEM and CT after 5 years of AEM
application and the PES value (the amount of payments received by the farmers in 5 years). EPES ¼
PES ΔSOC
ð3Þ
EPES indicates the value of PES invested to sequester a unit of SOC (€ Mg C−1 ha−1). In the considered study area, the average efficiency (AEPES) is: AEPES ¼
Total Budget ΔSOCtot
ð4Þ
where ΔSOCtot is the provided ecosystem service in the study area and the total budget is the total of incentives invested by governmental region relative to the study area. The comparison among EPES of each farm and the AEPES provides information on the efficiency of the previous PES scheme, highlighting which farmers received higher or lower payments in relation to the real ES provided. 2.5. Redistribution of the total budget in relation to real ES According to the actual provision criterion, the new payment for each farm was designed taking into account the previous experience of the variation of SOC sequestration in relation to the environment and the original, pre-treatment SOC content under CT. New Payment ¼
EPES PES AEPES
ð5Þ
replacing EPES with Eq. (1) and AEPES with Eq. (2), follows: New Payment ¼
ΔSOC ΔSOCtot : Total Budget
ð6Þ
3. Results and discussion 3.1. Ecosystem service Five years after the application of AEM, on average (100 plots), the SOC stock increased in the AEM plots. The increase in SOC stock was significantly affected by the SOC content that was present in the soil when it was still under CT, decreasing in the case the CT soils had higher SOC values. The increase ranged between 0 Mg ha−1 in the plot with a SOC under CT higher than 25 Mg ha− 1 to 10.7 Mg ha− 1 in soil with 17 Mg ha−1 of SOC content under CT (Fig. 1). The C sequestration rate was low in comparison to other results recorded in a similar semiarid environment (Márquez-García et al., 2013; Ruiz-Colmenero et al., 2013). The OC losses were generally higher under CT due to higher erosion rates, with a lower C content in soil (Fig. 2). The highest erosion rates are mainly the result of poor land cover (c-factor) (Novara et al., 2011). The overall C budget (SOC–OC loss) increased in the five years of AEM treatment (Fig. 3). The C under AEM increased up to 90% in comparison to CT. However, there was no C increase recorded in the paired site where the original C values were higher than 26 Mg ha−1, which is indicated by the point where the logarithmic trend line in Fig. 3 crosses the x axis. This point can be considered the steady state limit of C accumulation, even when the site is under conservation practices. These results showed that the benefits of AEM measures are site specific and that in Mediterranean area C stock is not linearly correlated with input increase, but has a maximum steady state level to which the C stock can rise.
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Fig. 1. Soil organic carbon (SOC) after the application of the AEM measure. Each dot represents one paired site.
3.2. Egalitarian versus actual provision criterion The volume of C sequestered in the soil after five years of AEM adoption has been linked with the value for each unit of C (€ per unit of ΔSOC), by calculating from the ratio between the total value of the payments obtained by the farmers in these five years (according to the 214/1A measure) and the volume of C sequestered (Eq. (4)). This ratio shows that between the two variables an exponential negative distribution exists (Fig. 4). The decrease of C values with increasing SOC stocks showed that the adoption of an egalitarian fairness criterion, like the one adopted in the Sicilian rural development program for agro-environmental payments, leads to an unfair distribution of premium. In other words, according to this criterion the premium did not depend on the provided ecosystem services. Indeed, land users that, through the adoption of an AEM, sequester larger amounts of C, will receive for each unit of C sequestered a much lower premium than the premium received by farmers who stored smaller amounts of SOC. This is due to the adoption of a constant value of the payments, independently of ES provided. In our case study, the C value (€ C Mg−1) ranged from 5170.6 € C Mg−1 for land users who produced low C sequestration levels (0.46 C Mg ha−1), to 406.7 € C Mg−1 for land users who produced
high C sequestration levels (5.6 C Mg ha−1) (Fig. 4). The wide variability of the C value was caused by the high range of C sequestered as a result of the variability of soil properties under a specific AEM strategy and specific location. However, the C value always had positive values because it was not calculated for farms which had reached the C saturation level. Hypothesizing the adoption of the actual provision criterion (Fig. 5), the premium is linearly correlated to the SOC sequestered (environmental service provision), showing that the higher the C sequestered is, the greater the premium paid to farmers that voluntarily intend to participate in AEM. If this criterion is adopted, the C value is constant and in our case study amounts to 646.52 € Mg−1. This value was estimated using previous experiences and therefore is determined by the average soil C sequestration rate in the study area and by the payment provided in the 2007–2013 RDP. The value is estimated taking into account the loss of income resulting from the adoption of the ecosustainable practices, which could entail an increase of specific costs and a reduction in yields of crops. Knowledge on potential soil C sequestration, which depends on the C initial content (C content under CT management) permits to calculate future payment in relation to the expected ecosystem service, according to Eq. (1) that takes the ability of
Fig. 2. Cumulative (5 years) organic carbon loss under AEM (red bullets) and CT (green bullets) soil management. (For interpretation of the references to color in this figure legend, the reader is referred to the web version of this article.)
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Fig. 3. C sequestration of AEM soil management vs. CT. Each dot represents a paired site.
the soil to sequester carbon into account. Faced with the impossibility of determining the value of the C on the basis of volume sequestered, we can use the current international market value of C per tonne, or alternatively, the value of carbon obtained using a replacement cost method. In Fig. 5 the blue line shows a positive relationship between SOC sequestered, or ES provision, and value of payment provided by the land users. In particular, this premium ranged from 298.8€ with 0.46 Mg ha−1 C sequestered after five years of AEM adoption, to 3593.7€ with 5.6 Mg ha−1 of C sequestered. The red line, instead, identifies the total amount of agro-environmental payments as expected by the measure 214/1A using the egalitarian fairness criterion. The intersection of the two lines allows to distinguish clearly, on one hand, the land users who have benefited from a higher premium than their contribution, in terms of C sequestration (from 0.5 to 3.5 C Mg h−1), through the adoption of agro-environmental practice. On the other hand, land users who received a lower premium compared to their real contribution in terms of ecosystem service (from 3.5 to 5.5 of C sequestered in the soil). A comparison between the actual provision and the egalitarian criterion, with specific reference to the 214/1A measure of the Sicilian RDP
2007–2013, shows the unfairness of the agro-environmental payments among farmers in the studied area. 4. Conclusions and further research Our study aimed to verify the efficiency of the PES scheme adopted in the framework of rural development policy in Sicily. Our study focused on the agri-environmental measure 214/1A adopted by many entrepreneurs in the wine-growing Sicilian region, in terms of equitable distribution of financial resources. In particular, the study compares the criterion adopted (egalitarian criterion), with the actual provision criterion where the premium is linearly correlated to the environmental service provided. The payment scheme currently adopted in the framework of rural development policy provides an equal premium per hectare for land users independently by the ecosystem services provided (in terms of soil C sequestered). The results show that there is an inequitable distribution of agri-environmental payments, which could potentially be mitigated by a scheme such as actual provision. This study which is based
Fig. 4. Value of carbon in relation to the SOC sequestered.
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Fig. 5. Comparison between egalitarian and actual provision criteria.
on empirical data demonstrates that the adoption of an actual provision criterion leads to a greater efficiency in the distribution of financial resources among land users. It offers a higher premium to land users that by adopting an agro-environmental practice, contribute to increase soil C sequestration. When C steady state occurs, a specific payment should be considered in order to maintain the sequestered SOC stock. Such payment is aimed to avoid C loss due to erosion and therefore it could be assessed according to Galati et al. (2015). Our findings have some implication for both land users and decision makers. In the case of land users, one of the main problems related to the adoption of the proposed criterion in the rural development program and for agri-environmental payments in particular, is that the entrepreneurs who make a minimum contribution in terms of soil C sequestration will not have the interest to participate in this measure. This is because the initial C stock was high in the case of these farmers and because the adopted agro-environmental practice did not produce very positive further effects. This would mean a reduction of soil C sequestration in the area as a whole. However, in these cases, the adoption of a premium for the maintenance of C stocks in the soil could prevent a change in business decisions. From the point of view of the policy makers, the introduction of the ES approach and consequently the adoption of an actual provision criterion could contribute to rationalize the financial resources making them more equitable and justifiable, among European citizens. The empirical analysis of the efficiency of the distribution of agroenvironmental payments, as proposed in this paper should be accompanied by a direct survey addressing the land users aimed at acquiring information related to the minimum level of premium below which these land users would not be willing to participate in the measure. The main limitation of the study is the single agro-environmental measure studied. However, the proposed method could be adopted to other agro-environmental scenarios that involve C sequestration. From this point of view, it is desirable that regions determine the potential of C sequestration in their soils and under their climate conditions. These data can be used for a more equitable distribution of agrienvironmental payments and for an effective use of financial resources deployed in the framework of rural development policies.
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