Financial incentives often fail to reconcile agricultural productivity and pro-conservation behavior

Many environmental challenges involve balancing agricultural production with conservation goals. A common approach is to provide direct payments to resource users to incentivize pro-environmental practices. However, the effectiveness of this approach is debated. This research addresses the question of whether payments can effectively encourage pro-environmental practices that also benefit agricultural production, particularly in situations where the conservation practice has potential private benefits. The study uses a novel approach, synthesizing data from a series of dynamic game experiments conducted across diverse geographical and socio-economic contexts to examine the effectiveness of payment mechanisms in diverse scenarios. The games model different collective action dilemmas in conservation, including the replacement of pesticides with insect-based ecosystem services, sharing damage control costs for pest animal species, and equitable sharing of production and fallowing in open-access agricultural land. This comprehensive approach provides a broader understanding of the interplay between payments, production, and conservation than would be possible from individual studies.

Existing literature on payments for environmental services (PES) programs shows mixed results regarding their effectiveness in aligning conservation with development goals. The effectiveness depends heavily on the context, design, and implementation of the programs. Many PES programs focus on achieving environmental goals at the expense of production, but many conservation challenges involve shifting behaviors to better use ecosystem services without necessarily reducing production. Studies on conservation agriculture demonstrate the potential for aligning production and environmental goals through practices like cover cropping and minimal tillage. While evidence regarding the role of payments in such contexts is accumulating, it is scarce and full-scale field trials are often expensive and time-consuming. Experimental games offer a valuable alternative for exploring resource users' responses to interventions.

This study utilizes data from three dynamic spatial games: NonCropShare, GooseBump, and SharedSpace. These games were implemented using NetLogo, a multi-agent modeling software, and played across seven countries (Cambodia, Vietnam, Orkney, Gabon, Tanzania, Kenya, and Madagascar). The games were designed to represent distinct conservation dilemmas related to pesticide use, pest animal management, and land-use management. Each game had varying designs and scenarios, but all included a treatment where payments were given for pro-conservation actions. The researchers collected data on agricultural production, pro-conservation practices (varying by game), and the joint product of both. In addition, a questionnaire was used to gather data on participants' beliefs about government, community, and conservation, as well as context variables such as perceptions of the game, choices made, and relationship strength among players. The data were analyzed using statistical methods to identify the relationships between payments, group characteristics, beliefs, and outcomes (production, conservation, and joint outcomes). The study pooled data across the games, standardizing variables across datasets to facilitate comparison. The analysis focuses on identifying factors that explain variations in the relative success of different groups, rather than making point estimates. The unit of analysis was the game round.

The key finding is that payments for pro-conservation actions do not generally lead to win-win outcomes for both production and conservation. While payments usually improved conservation outcomes, they consistently reduced agricultural production across different games, except in the NonCropShare game under specific conditions. The study found that higher production and joint production-environment outcomes were associated with higher education levels, better female representation in groups, and greater gender diversity. Stronger relationships among participants were also associated with greater pro-conservation practices, but at the expense of production. The study also observed that participants' beliefs about the roles of government and community in shaping livelihoods and the environment played a significant role in predicting conservation and production outcomes. This was comparable to the explanatory power of observable characteristics like age and gender. The degree to which conservation and production goals are in tension varies across different dilemmas, influencing the potential for win-win solutions. Where environmental benefits also deliver private benefits, payments can be more effective. However, in situations with less obvious connections between environmental goods and private gains, payments alone may not be sufficient. The study also highlights the importance of considering potential unintended consequences that might occur at other spatial scales and emphasizes that programs should consider both people and the environment in their designs.

The findings challenge the simplistic assumption that direct payments are always effective in achieving joint production-conservation outcomes. The results underscore the complex interplay between financial incentives, social dynamics, and ecological contexts. The impact of payments depends greatly on the specific nature of the conservation challenge, the design of incentive programs, and socio-economic characteristics of the participating groups. The significant role of group characteristics such as education, gender diversity, and relationship strength highlight the need to consider social factors in designing interventions. The study’s findings reinforce the importance of considering potential tradeoffs and unintended consequences at various scales when designing conservation programs. The study also indicates that interventions should adopt a more holistic approach, integrating financial incentives with other support mechanisms such as technical assistance, community building and insurance schemes.

This study demonstrates the limitations of relying solely on financial incentives for achieving simultaneous improvements in agricultural productivity and conservation outcomes. The effectiveness of payment mechanisms depends significantly on contextual factors, including the nature of the conservation challenge, group characteristics, and social dynamics. Future research should explore more integrated and context-specific interventions that consider both economic and social factors to promote sustainable outcomes. More research into innovative incentive programs that jointly target conservation outcomes and production is warranted. Further investigation into the impact of different types of payment mechanisms and the role of social capital is also needed.

The study relies on experimental game data, which may not perfectly reflect real-world complexities. The games, while designed to capture key features of human-environment interactions, are stylized representations of real-world scenarios. Generalizability to other contexts may be limited by differences in socio-economic conditions, institutional settings, and cultural norms. The sample of participants may not be fully representative of all rural agricultural communities, although efforts were made to ensure diverse representation. Although questionnaire data gathered information on beliefs and attitudes, it does not fully capture the depth and complexity of those beliefs and attitudes.