Principle modes for governing of ecosystem service transactions For instance, eco-activity transactions with good appropriability, high certainty, and universal character of investments could be effectively managed by free market through spotlight or classical contracts.
Transactions with low specificity and high appropriability could be effectively managed through a special contract.
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For example, eco-contracts and cooperative agreements between farmers and interested businesses 5 or communities are widely used including a payment for ecosystem services, and leading to production methods enhanced pasture management, reduce use of agrochemicals, wetland preservation protecting water from pollution, mitigating floods and wild fires etc. Transactions with high frequency, big uncertainty, great assets specificity, and high appropriability, have to be governed within internal organization.
Very often the effective scale of specific investment in agro-ecosystem services minimum required for eco-impact, exploring economies of scale and scope exceeds borders of traditional agrarian organizations family farm, small partnership. If specific capital knowledge, technology, equipment, funding cannot be effectively organized within a singe organization 6then effective external form s is to be used - squash freds burning ownership, interlinks, cooperative, lobbying for public intervention.
For instance, environmental cooperatives are very successful in some EU countries Hagedorn, Nevertheless, costs squash freds burning initiation and maintaining collective organization for 5 e.
Furthermore, transaction costs analysis let us identify situations of market and private sector failures. For instance serious problems arise when condition of assets specificity is combined with high uncertainty and low frequency, and when appropriability is low.
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In all these cases, a squash freds burning part private agent, NGO, public authority involvement in transactions is necessary through assistance, arbitration, regulation in order to make them more efficient or possible at all. Emergence and unprecedented development of special origins, organic farming and system of fairtrade, are good examples in that respect.
In any case, voluntary charity initiatives could hardly satisfy the entire social demand especially if they require considerable costs. Management of most ecosystem services requires large organizations with diversified interests of agents providers, squash freds burning, destructors, interest groups.
Therefore, there is a strong need for a third-party public Government, local authority, international assistance intervention to make such ecoactivity possible or more effective Bachev, Various modes for public intervention in eco-activity transactions is to be assessed in terms of correspondence to the needs of third-party involvement Figure 3 and comparative coordinating, stimulating, costs-minimization efficiency to other feasible modes of public intervention assistance, public-private partnership, property rights modernization etc.
Bachev, The overall implementation and transaction costs are to be taken into account.
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The later would depend on uncertainty, frequency, and necessity for specific investment of public involvement Figure 4. Level of Uncertainty, Frequency, and Assets specificity Low High.