Why and how to valuate public goods for policy design? Results from PROVIDE

Transcription

1 PROVIding smart DElivery of public goods by EU agriculture and forestry Why and how to valuate public goods for policy design? Results from Anastasio J. Villanueva and José A. Gómez-Limón Universidad de Córdoba (Spain) Final Conference Project. PROVIding smart DElivery of public goods by EU agriculture and forestry 27th June 2018 Foundation Universitaire, Brussels

2 Contents 1. Introduction: What and why to valuate? 2. Overview of methods (the how!) 3. results a) Demand-side: main results and heterogeneity b) Supply-side: main results and heterogeneity c) Transferability 4. Main policy-relevant lessons learnt 2

3 1. Introduction: What and why to valuate? The what Identification of public goods (PGs) provided by agricultural and forestry systems (AFS) Valuating PGs: valuing changes (in quantity and quality) in the natural and social environment - Produced by the farmers/foresters - Enjoyed by the society Depending on the change: costs of provision social benefits when the change results in a reduction of social welfare à public bads Non-market goods à valuation methods 3

4 1. Introduction: What and why to valuate? The why Why do we value PGBs provided by agriculture and forestry? 4

5 1. Introduction: What and why to valuate? Public goods valuated in Cluster CLU1. Intensive and mixed agriculture CLU2. Land abandonment CLU3. Urbanrural relation CLU4. Extensive agricultural systems CLU5. Forest landscapes Hot spot (HS) Code 1. Rural landscape (incl. recreation) 2. Farmland biodiversity 3. Water availability and quality 4. Air quality 5. Soil functionality 6. Climate stability 7. Resilience to flooding, landslide and wildfire 8. Rural vitality and cultural heritage 9. Food, energy and timber security and quality AT-1 X X X DE-1 X X X IT-2 X PL-1 X X UK-1 X X ES-1 X X X FR-1 X X X X X IT-1 X X X CZ-2 X X NL-1 X BG-1 X X X CZ-1 X FR-2 X X X RO-1 X X X EE-1 X FI-1 X X 10. Farm animal health/welfare 5

6 2. Overview of methods Main valuation methods available Ø Revealed preference methods Travel cost Hedonic pricing Ø Stated preference methods Contingent valuation Choice experiments Group valuation Ø Production function methods Ø Costs-based approaches Replacement/avoided/mitigation/restoration Ø Others: multicriteria analysis, experts based, etc. 6

7 2. Overview of methods Approaches used in The general objective calls for a compromise between results comparability and exploration of different methods, considering also the heterogeneity of hotspots (HSs) in terms of PGs Ø Demand-side CAP priorities assessment (EU level) Specific valuation exercises (CSR-regional level) Ø Supply-side Specific valuation exercises (CSR-regional level) 7

8 2. Overview of methods Demand-side: CAP priorities (EU level) Approach: EU-level assessment analysing CAP priorities related to the provision of PGBs by AFS Q1) Looking at the following list of public goods, can you indicate your priority in terms of which public good you would like to see more CAP money allocated to? Q2) Do you think that the current per household expenditure of 80 /year devoted to promote the provision of PGBs by agriculture and forestry is? 1-Too high 2-Fine 3-Too low If you think it is not fine, please provide the maximum amount you will be willing to pay for it. 8

9 2. Overview of methods Demand-side: Specific valuation exercise (CSR level) Approach: CSR-level assessment using stated preference methods Two options: Combination of Analytic Hierarchy Process (AHP) with Contingent Valuation (CV). Choice experiments (CE). 9

10 2. Overview of methods Demand-side: Specific valuation exercise (CSR level) Approach: CSR-level assessment using stated preference methods Two options: Combination of Analytic Hierarchy Process (AHP) with Contingent Valuation (CV). Choice experiments (CE). 10

11 2. Overview of methods Demand-side: Methods used by partners Cluster HS CAP priorities Specific valuation exercises (CSR level) (EU level) AHP+CV CE Others Others: description AT-1 X X CLU1 DE-1 X IT-2 X X Literature and experts judgement UK-1 X X ES-1 X X X CLU2 FR-1 X Benefit transfer and hedonic pricing for housing IT-1 X X CZ-2 X Hedonic pricing for housing CLU3 NL-1 X Revealed (travel-cost), stated preference methods and social media analysis BG-1 X X X ANP CLU4 FR-2 X Avoided cost method RO-1 X X CLU5 EE-1 X FI-1 X X CV model (kind of) combined with AHP 2,400 interviews in surveys carried out in 10 different countries 11

12 2. Overview of methods Supply-side: Summary of methods used Cluster CLU1 CLU2 CLU3 HS AT-1 DE-1 IT-2 PL-1 UK-1 ES-1 FR-1 IT-1 CZ-2 NL-1 Contingent valuation Discrete choice experiments X X X Revealed preferences Cost accounting BG-1 X X CLU4 FR-2 X RO-1 CLU5 EE-1 X X FI-1 X X X X Others 2,000* interviews in surveys carried out in 7 different countries X X X X

13 2. Overview of methods Supply-side: Example of valuation exercise Ø ES example: Farmers preferences towards participation in AES 13

14 2. Overview of methods Critical points to be highlighted Trade-off between accuracy and costs Defining and communicating PGBs under study: - How to be measured (indicators)? - What is the current provision of PGBs (availability of information)? - What are the targeted provision levels (AFS knowledge lack of)? What is the most suitable scope for the demand-side (targeted population)? What is the most suitable scale for the supply-side (delimiting AFS/area)? Partners Valuation decision frame on (e.g. this payment very much vehicle) relied on stakeholders (STK) knowledge gathered in previous activities of the project 14

15 2. Overview of methods Method adaptation: active role of stakeholders Previous tasks Hotspot/s selection within the Case Study Regions (CSR) Main PGBs provided in the HS/s Designing the valuation assessments (indicators, provision levels, issues, etc.) Carrying out valuation assessments 1 st Results: Estimates of benefits and costs of provision of PGBs 2 nd Results: Analysis of determinants and transferability of value Lessons learnt and messages for policymaking STAKEHOLDERS 15

16 3. Valuation results Demand-side: CAP priorities (EU level) Partners: AT, BG, ES, DE, EE, FI, IT, NL, RO, and UK. High level of priority to the provision of PGs within the CAP: more than 80% of respondents find all the PGs to have medium or high priority. PGs more highly ranked: water availability and quality, and air quality, followed by resilience to flooding, landslides and wildfire, climate stability, soil functionality, supply of food, energy and timber, and farm animal welfare. Around 60% of the respondents agreed with the current CAP expenditure devoted to promote the provision of PGs by AFS (23% think it s too low). Evidences of joint demand: water-air quality; climate stabilityresilience to flooding; rural viability-food, energy and timber security and quality; or food security-animal welfare. 16

17 3. Valuation results Demand-side: Specific valuation exercises (CSR level) Using CE/AHP+CV: AT, UK, ES, IT, BG, and RO. While different PGBs and context: high intensity of preferences (e.g. UK: 12-25m for biodiversity and 27-59m for water quality). More accurate assessments at regional and local level and more specific as well. Examples of comparisons: o o o o Water quality: AT: 60/household year for potable groundwater without treatment; UK: /person year for good status. Rural landscape: AT: 1.3/household year for 100ha of additional hedges and flower strips; RO: 0.5/person year for 100ha of additional forest areas. Biodiversity: UK: 24,9/person year for maintaining current level of farmland bird species; ES: for improvements of approx. +50% and +100% in the level of level of farmland bird species. Intra-case comparison: ES: Moderate and significant improvements for biodiversity ( 3.5 and 4.9) and soil functionality ( 0 and 4.4). 17

18 3. Valuation results Demand-side: Specific valuation exercises (CSR level) Using other methods: Lower comparability among results but enriched valuation approaches (variety of methods): o o o Use of qualitative-quantitative approach to account for interrelationships (e.g. BG: use of ANP). Quantitative approach based on private benefits stemmed from PGBs provision (FI: focus on tourism-based companies; CZ: hedonic prices on housing). Spatial analysis considering heterogeneous users (NL). Heterogeneity of benefits. Main factors: age, education level, children, etc. (-/+) à context specific! 18

19 3. Valuation results Supply-side: Specific valuation exercises (CSR level) Much lower comparability among results: specific joint production characterizing AFS The improved provision of PGBs generally imply extra costs for farmers and forestersà the higher the effort, the higher cost High heterogeneity of results (hinting at many factors influencing costs of provision of PGBs) Important factors influencing costs of provision: level of intensification (-), farm size (+), farm specialisation (-/+), previous experience in GM (+), among others Some situations entailing negligible extra-costs (e.g. AT, ES): win-win solutions 19

20 3. Valuation results Supply-side: Specific valuation exercises (CSR level) Farmers Ø ES example: Adoption curves (in terms of farms) for different AES scenarios and payment levels 100 % 80% 60% 40% 20% 0% Payment ( /ha) Int egra ted Int egra ted p lus Organ ic Organ ic plus Pu blic goods pr ovision 20

21 3. Valuation results Integrating demand- and supply-side results Ø ES example: Costs and benefits curves of biodiversity in Andalusian mountain olive groves (MOG) (AES implementation) Available in: toolbox ( 21

22 4. Main policy-relevant lessons learnt General lessons Useful results from the policy-making perspective, as they provide information on who benefits the most/least from PGBs provided by AFS and who provides such PGBs at lower/higher costs By knowing the benefits, policy-maker can more clearly follow the principle public money for [highly demanded] public goods By knowing the costs, more efficient design of governance mechanisms can be achieved By integrating both types of information, we can identify those solutions that yield net social gains 22

23 4. Main policy-relevant lessons learnt More specific lessons In general, the higher the provision of PGBs by AFS, the higher the benefits (demand-side) and the costs for farmers and foresters (supply-side) Heterogeneity of benefits and costs depending on PGBs and socioeconomic factors This contests the use of benefit transfer, mainly for supply-side Some method-wise lessons: o Careful selection of indicators to measure level of PGBs provision à options for use of the same indicators for valuation and evaluation o Stakeholders involvement very useful (identification of issues, etc.) o Little room for common approaches (as AFS, PGBs, levels of provision differ), especially for supply-side assessments o Variety of valuation methods: the higher accuracy, the higher cost 23

24 4. Main policy-relevant lessons learnt Ideas for debate To be approved, any relevant policy aimed at promoting the provision of PGs by AFS should include an assessment of benefits and costs derived from it? (bearing in mind that they can be costly and should be specifically -regionally- implemented) Because there is high heterogeneity: As some groups of population enjoy higher benefits than others: Shall the policy-maker take into account equity issues? Some farmers/foresters are more competitive (lower production costs) in the provision of PGs than others: Shall the governance mechanisms be focused just on them? 24

25 More in-detailed information s scientific production (deliverables/papers) Deliverables describing s valuation results: o o o o Deliverable D4.1. Selection of valuation tools and guidelines ( Deliverable D4.2. Report on valuation results ( Deliverable D4.3. Report on value determinants and transferability ( Deliverable D4.4. Report on lessons learnt and valuation guidelines ( Several scientific papers published and others are on their way (particularly to be included in two Special Issues). 25

26 PROVIding smart DElivery of public goods by EU agriculture and forestry Thanks!!!

27 PROVIding smart DElivery of public goods by EU agriculture and forestry Why and how to valuate public goods for policy design? Results from Anastasio J. Villanueva and José A. Gómez-Limón Universidad de Córdoba (Spain) Final Conference Project. PROVIding smart DElivery of public goods by EU agriculture and forestry 27th June 2018 Foundation Universitaire, Brussels