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The Efficiency of Voluntary Incentive Policies for Preventing Biodiversity Loss

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  • Lewis, David J.

    (University of Wisconsin)

  • Plantinga, Andrew J.

    (Oregon State University)

  • Nelson, Erik

    (Natural Capital Project, Stanford University)

  • Polasky, Stephen

    (University of Minnesota)

Abstract

In this paper we analyze the efficiency of voluntary incentive-based land-use policies for biodiversity conservation. Two factors combine to make it difficult to achieve an efficient result. First, the spatial pattern of habitat across multiple landowners is important for determining biodiversity conservation results. Second, the willingness of private landowners to accept a payment in exchange for enrolling in a conservation program is private information. Therefore, a conservation agency cannot easily control the spatial pattern of voluntary enrollment in conservation programs. We begin by showing how the distribution of a landowner's willingness-to-accept a conservation payment can be derived from a parcel-scale land-use change model. Next we combine the econometric land-use model with spatial data and ecological models to simulate the effects of various conservation program designs on biodiversity conservation outcomes. We compare these results to an estimate of the efficiency frontier that maximizes biodiversity conservation at each level of cost. The frontier mimics the regulator's solution to the biodiversity conservation problem when she has perfect information on landowner willingness-to-accept. Results indicate that there are substantial differences in biodiversity conservation scores generated by the incentive-based policies and efficient solutions. The performance of incentive-based policies is particularly poor at low levels of the conservation budget where spatial fragmentation of conserved parcels is a large concern. Performance can be improved by encouraging agglomeration of conserved habitat and by incorporating basic biological information, such as that on rare habitats, into the selection criteria.

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Bibliographic Info

Paper provided by University of Wisconsin, Agricultural and Applied Economics in its series Staff Paper Series with number 533.

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Date of creation: Mar 2009
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Handle: RePEc:ecl:wisagr:533

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Citations

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Cited by:
  1. Arthur van Benthem & Suzi Kerr, 2010. "Optimizing Voluntary Deforestation Policy in the Face of Adverse Selection and Costly Transfers," Working Papers 10_04, Motu Economic and Public Policy Research.
  2. Katharine Sims, 2014. "Do Protected Areas Reduce Forest Fragmentation? A Microlandscapes Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 58(2), pages 303-333, June.
  3. Lauriane MOUYSSET & Luc DOYEN & Jean-Christophe PEREAU & Fréderic JIGUET, 2013. "A double benefit of biodiversity in agriculture," Cahiers du GREThA 2013-04, Groupe de Recherche en Economie Théorique et Appliquée.
  4. Drechsler, Martin & Wätzold, Frank & Johst, Karin & Shogren, Jason F., 2010. "An agglomeration payment for cost-effective biodiversity conservation in spatially structured landscapes," Resource and Energy Economics, Elsevier, vol. 32(2), pages 261-275, April.
  5. Bamiere, Laure & David, Maia & Vermont, Bruno, 2011. "Agri-Environmental Policies When the Spatial Pattern of Biodiversity Reserves Matters," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114239, European Association of Agricultural Economists.
  6. Elena G. Irwin, 2010. "New Directions For Urban Economic Models Of Land Use Change: Incorporating Spatial Dynamics And Heterogeneity," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 65-91.
  7. Michael Brady & Elena Irwin, 2011. "Accounting for Spatial Effects in Economic Models of Land Use: Recent Developments and Challenges Ahead," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(3), pages 487-509, March.
  8. Francisco Candel-Sánchez, 2012. "Pigouvian taxes and the Varian’s mechanism in dynamic settings," Journal of Regulatory Economics, Springer, vol. 42(1), pages 39-51, August.
  9. Stephen Polasky & Erik Nelson & Derric Pennington & Kris Johnson, 2011. "The Impact of Land-Use Change on Ecosystem Services, Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(2), pages 219-242, February.
  10. Walls, Margaret & Riddle, Anne, 2012. "Biodiversity, Ecosystem Services, and Land Use: Comparing Three Federal Policies," Discussion Papers dp-12-08, Resources For the Future.

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