International Review of Environmental and Resource Economics > Vol 12 > Issue 1

Identifying the Causes of Low Participation Rates in Conservation Tenders

John Rolfe, School of Business and Law, Central Queensland University, Australia, j.rolfe@cqu.edu.au Steve Schilizzi, UWA School of Agriculture and Environment, The University of Western Australia, Australia, Peter Boxall, Department of Resource Economics & Environmental Sociology, University of Alberta, Canada, Uwe Latacz-Lohmann, Department of Agricultural Management and Production Economics, University of Kiel, Germany, Sayed Iftekhar, UWA School of Agriculture and Environment, The University of Western Australia, Australia, Megan Star, School of Business and Law, Central Queensland University, Australia, Patrick O'Connor, Centre for Global Food and Resources, University of Adelaide, Australia,
 
Suggested Citation
John Rolfe, Steve Schilizzi, Peter Boxall, Uwe Latacz-Lohmann, Sayed Iftekhar, Megan Star and Patrick O'Connor (2018), "Identifying the Causes of Low Participation Rates in Conservation Tenders", International Review of Environmental and Resource Economics: Vol. 12: No. 1, pp 1-45. http://dx.doi.org/10.1561/101.00000098

Published: 06 Nov 2018
© 2018 J. Rolfe, S. Schilizzi, P. Boxall, U. Latacz-Lohmann, S. Iftekhar, M. Star and P. O'Connor
 
Subjects
Environmental Economics:Market-based Policy Instruments
 
Keywords
JEL Codes: Q18Q52Q26
Conservation tendersreverse auctionsparticipationlandholders
 

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In this article:
1. Introduction
2. Participation Rates in Conservation Tenders
3. Drivers of Participation: The Adoption Perspective
4. Drivers of Participation: The Complexity of the Auction Process
5. Models of Participation
6. Discussion and Conclusions
References

Abstract

Conservation tenders are being used as a policy mechanism to deliver environmental benefits through changes in land, water and biodiversity management. While these mechanisms can potentially be more efficient than other agri-environmental and payment for ecosystem service schemes, a key limitation in practice is that participation rates from eligible landholders are often low, limiting both efficiency and effectiveness. In this paper we document and review potential causes of low participation in two categories: those that treat participation as an adoption issue focused on searching for the landholder, farm or practice characteristics that limit participation; and those that treat it as an auction design issue, looking for the different auction, contract or transaction cost elements that limit landholder interest in participation. We then model how landholders make choices to engage and bid in a tender, making three important contributions to the literature on this topic. First, we document the low participation rates in conservation tenders, mostly across developed countries, an issue that has received little attention to date. Second, we explain that a decision to participate in a conservation tender involves three simultaneous decisions about whether to change a management practice, whether to be involved in a public or private program with contractual obligations, and how to set a price or bid. Third, we explain that there are a number of factors that affect each stage of the decision process with some, such as landholder attitudes and risk considerations, relevant to all three. Our findings suggest that decisions to participate in a conservation tender are more complex than simple adoption decisions, involving optimisation challenges over a number of potentially offsetting factors.

DOI:10.1561/101.00000098