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Regulation versus subsidies in conservation with a self-interested policy maker

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  • Tapio Palokangas

    (University of Helsinki)

Abstract

This article examines the following case. A set of countries produce goods from labor, government input and natural resources. Because the conservation of natural resources in any country yields utility (e.g., through biodiversity) in every country, and because there is no benevolent international government, a resident of the countries is chosen as the regulator to whom conservation policy is delegated. The countries influence the regulator by their political contributions. In this common agency setup, the following result is proven: as long as the minimum conservation standards are implemented, conservation subsidies are welfare decreasing, involving excessive conservation. This suggests that there should be no “co-financing” for designated conservation sites in the EU NATURA 2000 project.

Suggested Citation

  • Tapio Palokangas, 2017. "Regulation versus subsidies in conservation with a self-interested policy maker," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(1), pages 183-196, January.
    • Handle: RePEc:spr:envpol:v:19:y:2017:i:1:d:10.1007_s10018-016-0143-8
    DOI: 10.1007/s10018-016-0143-8
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    References listed on IDEAS

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    1. Jesús Crespo Cuaresma & Tapio Palokangas & Alexander Tarasyev (ed.), 2013. "Green Growth and Sustainable Development," Dynamic Modeling and Econometrics in Economics and Finance, Springer, edition 127, number 978-3-642-34354-4, July-Dece.
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    More about this item

    Keywords

    Ecological habitats; Biodiversity; Regulation; Conservation subsidies; NATURA 2000 project;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • F15 - International Economics - - Trade - - - Economic Integration
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land

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