Do differential payments for agri-environment schemes affect the environmental benefits? A case study in the North-Eastern Italy

Abstract Promoting sustainable agricultural systems, maintaining biodiversity, and establishing measures to counteract climate change are the clear objectives of the future Common Agricultural Policy (CAP); however, there is still uncertainty regarding its implementation. At the level of the European Union, the justification for the CAP appears increasingly linked to the translation of policy objectives into results-based measures. Accordingly, in this paper, we estimate a composite indicator to track changes at the farm level and assess the impacts of agri-environment climate schemes (AECSs) on the change in management intensity. As AECS payments are tailored to compensate for the costs and income forgone due to participation in environmentally friendly measures, we assume that any environmental benefits increase with the amount of payment received. We estimate the effects of differential payments on management intensity by applying a generalised propensity score approach to a case study comprising all AECSs implemented in the Veneto region (North-eastern Italy). We find that AECSs have a significant effect on the composite indicator of extensification, but the provision of environmental good differs among the varying levels of payments. Our results contribute in-depth reflections and a proposal for measuring the cost-effectiveness of AECSs to the ongoing debate on the post-2020 CAP regarding AECSs.