Action-based payments that compensate farmers for adopting land-management measures to preserve and enhance the environment have been criticized for being ineffective. The root of the problem is that farmers are not paid for achieving a desired environmental benefit, but compensated for their costs of management. There is growing interest in formulating result-based economic incentives.

Biodiversity offsets seek to counterbalance loss of biodiversity due to major developments by generating equivalent biodiversity benefits elsewhere, resulting, at least in theory, in ‘no net loss’ (or even a ‘net positive gain’) in biodiversity. While local costs of major developments themselves receive significant attention, the local costs of associated biodiversity offsets have not.

The restoration and improvement of natural capital (NC) in rural areas represents one of the main objectives of the EU’s rural development policy (RDP). In addition to creating environmental and biodiversity benefits, NC represents an important territorial asset and a basis to generate socio-economic second-order effects for economic competitiveness and rural viability. However, the regional capability to valorise NC depends on the specific regional context, needs and potentials, as well as targeted policy support.