Threshold effect and coordination of agri-environmental efforts

This paper deals with policy mechanism designs for agri-environnemental schemes when the bio-physical processes are characterized by threshold effects. There is a threshold effect when specified farming practices must be applied on a minimal share of an area of interest to trigger perceptible changes of the state of the natural environment. Schemes result in a pure economic loss if the induced agro-environmental efforts are not sufficient. Different situations are considered including the lack of information on farmers' characteristics or actions, uncertainty on the relationship between farming practices and environmental quality, and combined difficulties of scheme design.