This document represents Deliverable 2.1 “Overview of regulatory and incentive instruments for biodiversity management on farms” within WP2 „Identifying incentives to promote biodiversity and ecosystem services in agricultural landscapes“ of the EU Horizon 2020 project SHOWCASE. It reports the outcomes of WP2 Task 2.1 “Evaluating regulatory and incentive instruments for biodiversity management on farms”.

In the 1st and 2nd chapter, the report gives a short introduction of the deliverable’s objectives, the tasks addressed, the report’s outline and the main focus of the literature review.

Chapter 3 gives an overview of the main laws governing biodiversity protection in the European Union. The main elements of the Birds and Habitats directives are presented, alongside other biodiversity laws and policies, with a focus on the obligations and requirements they set on agriculture in order to protect European native wildlife. Chapter 3 also covers the features of the EU’s Common Agricultural Policy that operate as a regulatory baseline for all beneficiaries of farm subsidies, i.e., cross-compliance and greening requirements under the current CAP and the new conditionality in the CAP 2023-2027.

Chapter 4 gives an overview of economic and non-economic approaches potentially promoting farmers’ pro-biodiversity behaviour. Whereas economically oriented approaches imply positive or negative monetary flows – compensation payments or rewards vs. penalties – to motivate farmers to implement biodiversity-friendly management practices or to prevent them from harming biodiversity, partnerships and networks steer farmers’ behaviour through agreeing on a common goal and working towards it by sharing resources, skills and risk. With regards to the agricultural focus of SHOWCASE, Chapter 4 looks in more detail at the incentives provided by the Common Agricultural Policy (CAP) of the European Union. This covers both the current and future CAP, with an overview of how the novel eco-schemes can provide new incentives for farmers to adopt biodiversity friendly practices.

Chapter 5 looks into how the combination of regulatory frameworks and incentives operate in practice for farmers in the EU. To this end, grey literature and European Commission publications related to farming for biodiversity have been reviewed. A specific focus is set on biodiversity-friendly farming in Natura 2000 sites, as central exemplary areas of continuous and long-lasting efforts in biodiversity conservation. This is followed by revising some of the main conclusions from very recent grey literature assessing the successes and failures of the CAP in relation to biodiversity.

Chapter 6 provides an overview of approaches that have already been implemented to incentivize farmers’ pro-biodiversity behaviour. Based on grey literature, various types of approaches – i. e. focusing on plot or farm level, land tenure or the entire value chain, building on organic farming or including market-based, value-based or measure-based mechanisms – were identified within the EBA countries, further EU member states and selected western countries outside the EU. In sum, 62 examples of pro-biodiversity schemes were included in the further analysis representing highly divergent incentivizing mechanisms and the most important agricultural systems of the EBAs as well as in consequence serving as an information platform for further EBA scheme design activities.

Based on the preceding chapters and their focus on result-based approaches, Chapter 7 casts a critical eye on their suitability with regards to various regulatory, policy, social and administrative contexts also considering potential national differences. On the international level, WTO requirements such as Green Box rules are a limiting factor with regards to result- based payment modalities and thus scheme design. On the national and regional level, issues to be considered include long-term availability of funding, guaranteeing additionality if requested, stakeholders’ and decision-makers’ attitudes towards agri-environment-climate measures in general as well as towards result-oriented approaches specifically, availability of suitable indicators and IT-systems, access to extension services and profound know-how of 

farmers and public authorities regarding the interlinkages between biodiversity and farming practices. On individual level, farmers’ trust in involved institutions and their willingness to participate are additionally discussed as highly relevant factors affecting the suitability of result- based approaches.

In Chapter 8 a structured overview on factors influencing farmers’ willingness to promote biodiversity by implementing voluntary biodiversity measures is presented. Based on the review of scientific literature, the chapter describes several determinants which have been identified along three scales, i.e. 1) society, community and landscape, 2) farm scale, and 3) farmers’ intrinsic factors. The main influencing factors at the first scale range from the design of policies, to economic aspects, to socio-cultural norms. The second scale encompasses relevant farm characteristics, such as farm type and size to field conditions. For the farmers’ intrinsic factors age, education, experience, and self-identity play an important role. However, it is important to make a distinction between farmers’ willingness to participate in schemes and their actual behaviour, because the latter is determined by their ability to do so.

Chapter 9 closes the Deliverable by giving an outlook on the further use of the results for scientific analyses within SHOWCASE, supporting mainly the work of designing interventions in WP1 and of developing surveys and model designs in WP2, as well as providing a basis for communication and policy recommendation material for WP4.