Buying Ecological Services: Fragmented Reserves, Core and Periphery National Park Structure, and the Agricultural Extensification Debate

Growing demand for cropland products has placed intense pressure on the abilityof land resources to support nature, straining public budgets to purchase environmental goods.Fixing overall agricultural output, two environmental policy options are whether to a) promotemore agricultural extensification and nature friendly farming practices or b) produce intensivelyon some land and leave the rest wild. Microeconomic models of the topic have not accounted forwidely recognized spatial externalities regarding fragmented reserves. This article does so, usingWirtinger's inequality to also identify a third policy possibility. This is that ecological servicescan follow a smoothly varying spatial path chararacterized by harmonic functions. We use theresults to rationalize the core and periphery National Park structure put in place around theworld, i.e., versions of our third policy possibility have been implemented.