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Ecological compensation: How much and where?

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  • Gastineau, Pascal
  • Mossay, Pascal
  • Taugourdeau, Emmanuelle

Abstract

We develop a normative approach to optimal environmental compensation in a spatial framework. We determine both the location and the level of compensation that minimize the total cost of restoration while maintaining the social welfare unchanged. In our framework, the policy maker implements a No Net Loss policy that meets the No Worse-Off principle as well as a location constraint on the offset. We describe the additional ecological cost induced by the No Worse-Off principle and how the spatial distribution of individuals, the environment and land costs affect the compensation location. The location constraint is shown to give rise to a trade-off between the compensation cost and the inequality among individuals induced by the policy.

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  • Gastineau, Pascal & Mossay, Pascal & Taugourdeau, Emmanuelle, 2021. "Ecological compensation: How much and where?," Ecological Economics, Elsevier, vol. 190(C).
    • Handle: RePEc:eee:ecolec:v:190:y:2021:i:c:s0921800921002500
    DOI: 10.1016/j.ecolecon.2021.107191
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    14. Richert, Claire & Rogers, Abbie & Burton, Michael, 2015. "Measuring the extent of a Social License to Operate: The influence of marine biodiversity offsets in the oil and gas sector in Western Australia," Resources Policy, Elsevier, vol. 43(C), pages 121-129.
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    Cited by:

    1. Rebotier, Julien, 2023. "Oil offsets in Esmeraldas (Ecuador) When the promotion of development shores up unequal risk situations," Ecological Economics, Elsevier, vol. 213(C).
    2. Barral, Stéphanie & Guillet, Fanny, 2023. "Preserving peri-urban land through biodiversity offsets: Between market transactions and planning regulations," Land Use Policy, Elsevier, vol. 127(C).
    3. Xue, Jibin & Lang, Jiahui & Guan, Yanjun & Lu, Shibao, 2023. "Design and measurement of small-scale regional ecological compensation model," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1392-1405.
    4. Zhidong Li & Boru Su & Moucheng Liu, 2022. "Research Progress on the Theory and Practice of Grassland Eco-Compensation in China," Agriculture, MDPI, vol. 12(5), pages 1-16, May.
    5. Li, Meng & Lu, Shibao & Li, Wei, 2022. "Stakeholders′ ecological-economic compensation of river basin: A multi-stage dynamic game analysis," Resources Policy, Elsevier, vol. 79(C).

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    More about this item

    Keywords

    Ecological compensation; No net loss policy; Welfare; Inequality;
    All these keywords.

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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