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The Biodiversity Bargaining Problem

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Author Info

  • Rupert Gatti

    ()

  • Timo Goeschl

    ()

  • Ben Groom

    ()

  • Timothy Swanson

    ()

Abstract

This paper describes global biodiversity conservation as a co-operative bargaining problem. We model an interdependent ‘technology rich’ North and a ‘gene rich’ South who must co-operate in the biotechnology sector in order to combine their unique and essential resources and maximise global surplus. Chief among the ideas presented here is that, in a manner similar to the ‘rational threats’ idea posited by Nash (1953), and in line with observations of pre-contractual bargaining over biodiversity conservation in Latin America (World Bank 2003), destruction of biological resources represents a real source of bargaining power to the South in determining the bargaining outcome. Not only this, but current institutional arrangements relevant to the biodiversity bargaining problem, namely the incremental cost approach enshrined in the CBD and IPRs for innovation enshrined in TRIPS, can be shown to offer a second-best solution. These arrangements may induce the strategic incentives in the game of surplus division.

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 48 (2011)
Issue (Month): 4 (April)
Pages: 609-628

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Handle: RePEc:kap:enreec:v:48:y:2011:i:4:p:609-628

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Biodiversity; Incremental costs; International environmental agreements; Nash cooperative bargaining; North–south bargaining; Rational threats; Q15; Q16; Q21; O13; O34;

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References

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  1. Ilhem Kassar & Pierre Lasserre, 2002. "Species Preservation and Biodiversity Value: A Real Options Approach," CIRANO Working Papers 2002s-82, CIRANO.
  2. Angelsen, Arild & Kaimowitz, David, 1999. "Rethinking the Causes of Deforestation: Lessons from Economic Models," World Bank Research Observer, World Bank Group, vol. 14(1), pages 73-98, February.
  3. Lutz-Alexander Bush & Shouyong Shi & Quan Wen, 1998. "Bargaining with Surplus Destruction," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 915-932, November.
  4. Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers.
  5. Timo Goeschl & Timothy Swanson, 2003. "Pests, Plagues, and Patents," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 561-575, 04/05.
  6. Polasky, Stephen & Costello, Christopher & McAusland, Carol, 2004. "On trade, land-use, and biodiversity," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 911-925, September.
  7. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
  8. King, K., 1994. "The Incremental Costs of Global Environmental Benefits," Papers 5, World Bank - Global Environment Facility.
  9. Timo Goeschl & Timothy Swanson, 2002. "The Social Value of Biodiversity for R&D," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(4), pages 477-504, August.
  10. Scott Barrett, 1994. "The biodiversity supergame," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(1), pages 111-122, February.
  11. Susanne Droege & Birgit Soete, 2001. "Trade-Related Intellectual Property Rights, North-South Trade, and Biological Diversity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 19(2), pages 149-163, June.
  12. Swanson, Timothy, 1996. "The reliance of northern economies on southern biodiversity: biodiversity as information," Ecological Economics, Elsevier, vol. 17(1), pages 1-8, April.
  13. Timo Goeschl & Timothy Swanson, 2003. "On Biology and Technology: The Economics of Managing Biotechnologies," Working Papers 2003.42, Fondazione Eni Enrico Mattei.
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Citations

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Cited by:
  1. Tim Swanson & Ben Groom, 2012. "Regulating Global Biodiversity: What is the Problem?," Working Papers 2012.31, Fondazione Eni Enrico Mattei.
  2. Winands, Sarah & Holm-Müller, Karin & Weikard, Hans-Peter, 2013. "The biodiversity conservation game with heterogeneous countries," Ecological Economics, Elsevier, vol. 89(C), pages 14-23.
  3. Charles Figuières & Solenn Leplay & Estelle Midler & Sophie Thoyer, 2010. "The REDD scheme to curb deforestation: A well-designed system of incentives?," Working Papers 10-06, LAMETA, Universtiy of Montpellier, revised Jun 2010.
  4. Oliver Deke, 2004. "Financing National Protected Area Networks Internationally � The Global Environment Facility as a Multilateral Mechanism of Transfer," Kiel Working Papers 1227, Kiel Institute for the World Economy.

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