Danish reverse auctioning scheme on the road to success

The Danish case study on a reverse auctioning scheme for the ecosystem service of biodiversity production and protection passed a major milestone this spring when the auction was finally launched on the website of Danish Forest Association. Forest owners from the test region were invited to place their bids using a special online platform created for the purpose.

We received in total 25 bids for biodiversity actions in private forests during the auctioning period, which lasted for about 2 months. There were a large and varying number of high quality and creative projects among the pool of bids, showing the effectiveness of the process and platform in attracting interest.

Figure 1. Members of the field team

Finding the hidden gems

The bids received through the auction and their proposed biodiversity actions have a cost 3 times the amount of budget available for distribution, which makes it possible to test our payment model and selection procedure in practice. Thus, work has since ensued on incrementally narrowing the total pool of projects that are competing for funds through a methodical process.

With a very diverse pool of proposed projects to evaluate from a biodiversity cost-benefit analysis perspective, field visits have been necessary to evaluate each preliminarily chosen project and its potential.

As of time of writing, it is still an ongoing process to determine how to evaluate the bids and choose the final winners.

The main challenge so far has been to find a credible way to assess the long-term potential of each project and its impact on key threatened and vulnerable species by evaluating both the current composition and future likely development of its host forest plots. After a ranking of the different projects based on their  potential biodiversity benefits, the next step will be to include the price offers from the project bidders to estimate the projects that provide the highest level of biodiversity protection for the spend value.

To solve the biodiversity assessment challenge, the project group visited each of the initially chosen forest project plots during a couple of intense hiking days in mid-September, bringing along with us a nationally renowned forest biodiversity expert. So far, this has brought us the expected clarity needed to continue with selection and concept development procedure.

2020-09-29T12:56:28+00:00 September 29th, 2020|Tags: , , , |0 Comments

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