Enforcement Aspects of Conservation Policies: Compensation Payments versus Reserves

This model explicitly incorporates thedynamic aspects of conservation programs withincomplete compliance and it allows landholders’behaviour to change over time. We find that incompleteand instrument-specific enforcement can have asignificant impact on the choice between subsidyschemes and reserves for conservation policies. Theresults suggest that it is useless to design a conservationscheme for landholders if the regulator is not preparedto explicitly back the program with a monitoring andenforcement policy. In general, the regulator will preferto use compensation payments, if the cost of usinggovernment revenues is sufficiently low, theenvironmental benefits are equal, and the cost efficiencybenefits exceed the (possible) increase in inspectioncosts. If the use of government funds is too costly, thereserve-type instruments will be socially beneficial.