FROM LOCAL RELUCTANCE TO GLOBAL VALUATION: ECONOMIC PERSPECTIVES ON AFFORESTATION AND BIODIVERSITY

Abstract

Afforestation is central to global strategies for mitigating climate change and restoring biodiversity, yet participation by private landowners remains persistently low despite decades of generous public incentives. This thesis investigates the economic, behavioural, and institutional foundations of this paradox through the case of Ireland a country combining favourable biophysical conditions, sustained policy support, and chronically low planting rates. It asks: How can economic theory and valuation methods inform the design of effective policies to incentivise long-term afforestation and biodiversity provision under conditions of landowner reluctance? The research adopts a sequential mixed-methods design integrating three analytical components. First, a Discrete Choice Experiment (n = 150) quantifies Irish farmers' willingness to accept compensation for alternative afforestation contract attributes. Results reveal that preferences are driven less by payment levels than by contractual flexibility, security, and duration. Farmers strongly oppose mandatory replanting obligations, value longer-term or permanent payments, and favour native woodlands over spruce plantations, reflecting both economic consideration and environmental awareness. Second, a Real Options Theory-informed qualitative analysis of 24 farmer interviews interprets reluctance as a rational response to irreversibility, uncertainty, and the appeal of more flexible land uses rather than as attitudinal resistance. Farmers assign high 'option value' to waiting until policy, market, and ecological uncertainties are reduced, underscoring the need for more flexible, credible, and risk-sharing policy instruments. Third, a Systematic Literature Review and Meta-Analysis of 93 studies complements Chapters 2-3 by shifting from the question of whether current payments are attractive to farmers to the question of what those payments should include. Focusing on biodiversity -the key public good differentiating native woodlands from monoculture plantations-the review synthesises how biodiversity is defined and monetised, highlights the trade-off between scientific rigor and public comprehensibility, and identifies standards needed to price biodiversity credibly in policy and markets. This links the Irish case to payment design: biodiversity values belong inside the payment envelope, particularly for longer-rotation native forests. Together, the studies demonstrate that the persistent failure to meet afforestation targets — despite seemingly generous financial incentives — stems not from inadequate compensation but from deeper systemic gaps in valuation and decision-making. The thesis advances both theory and practice by integrating behavioural realism into economic analysis, extending Real Options Theory into socio-institutional contexts, and providing empirically grounded guidance for designing flexible, credible, and performance-based afforestation policies.