Authors: Drechsler, Martin;

Conservation offsets are increasingly used as an instrument for biodiversity conservation on private lands. Since the restoration of degraded land often involves uncertainties and time lags, conservation biologists have recommended that credits in conservation offset schemes be awarded only with the completion of the restoration process. What is ignored in these arguments, however, is that such a scheme design may incur higher economic costs than a design in which credits are already awarded at the initiation of the restoration process. A generic agent-based ecological-economic simulation model is developed to explore different pros and cons of the two scheme designs, in particular their cost-effectiveness. The economic model compartment considers spatially heterogeneous and dynamic conservation costs, risk aversion and time preferences in the landowners. The ecological compartment considers uncertainty in the duration and the success of restoration, and the metapopulation dynamics of a species described by rates of local population extinction and the colonisation of empty habitat patches. It turns out that whether credits should be awarded at the initiation or with completion of restoration depends on the ecological and economic circumstances, such as the dynamics of the conservation costs and the restoration uncertainty.