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The efficiency of voluntary incentive policies for preventing biodiversity loss

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  • Lewis, David J.
  • Plantinga, Andrew J.
  • Nelson, Erik
  • Polasky, Stephen

Abstract

Habitat loss is a primary cause of loss of biodiversity but conserving habitat for species presents challenges. Land parcels differ in their ability to produce returns for landowners and landowners may have private information about the value of the land to them. Land parcels also differ in the type and quality of habitat and the spatial pattern of land use across multiple landowners is important for determining the conservation value of parcels. This paper analyzes the relative efficiency of simple voluntary incentive-based policies in achieving biodiversity conservation objectives. This topic is important not just for biodiversity conservation but for any effort to provide a public good requiring coordination across multiple decision-makers who have some degree of private information. We develop a method that integrates spatially explicit data, an econometric model of private land-use decisions, landscape simulations, a biological model of biodiversity as a function of landscape pattern, and an algorithm that estimates the set of efficient solutions. These methods allow us to simulate landowner responses to policies, measure the consequences of these decisions for biodiversity conservation, and compare these outcomes to efficient outcomes to show the relative efficiency of various policy approaches. We find substantial differences in biodiversity conservation scores generated by simple voluntary 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.

Suggested Citation

  • Lewis, David J. & Plantinga, Andrew J. & Nelson, Erik & Polasky, Stephen, 2011. "The efficiency of voluntary incentive policies for preventing biodiversity loss," Resource and Energy Economics, Elsevier, vol. 33(1), pages 192-211, January.
  • Handle: RePEc:eee:resene:v:33:y:2011:i:1:p:192-211
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    Cited by:

    1. Duke, Joshua M. & Dundas, Steven J. & Johnston, Robert J. & Messer, Kent D., 2014. "Prioritizing payment for environmental services: Using nonmarket benefits and costs for optimal selection," Ecological Economics, Elsevier, vol. 105(C), pages 319-329.
    2. 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.
    3. van Benthem, Arthur A. & Kerr, Suzi, 2010. "Optimizing Voluntary Deforestation Policy in the Face of Adverse Selection and Costly Transfers," 2010 Conference, August 26-27, 2010, Nelson, New Zealand 96813, New Zealand Agricultural and Resource Economics Society.
    4. Jiang, Yong & Swallow, Stephen K., 2017. "Impact Fees Coupled With Conservation Payments to Sustain Ecosystem Structure: A Conceptual and Numerical Application at the Urban-Rural Fringe," Ecological Economics, Elsevier, vol. 136(C), pages 136-147.
    5. repec:eee:jeeman:v:86:y:2017:i:c:p:8-28 is not listed on IDEAS
    6. Gaaff, Aris & Reinhard, Stijn, 2012. "Incorporating the value of ecological networks into cost–benefit analysis to improve spatially explicit land-use planning," Ecological Economics, Elsevier, vol. 73(C), pages 66-74.
    7. Jean-Sauveur Ay & Raja Chakir & Luc Doyen & Frédéric Jiguet & Paul Leadley, 2014. "Integrated models, scenarios and dynamics of climate, land use and common birds," Climatic Change, Springer, vol. 126(1), pages 13-30, September.
    8. Michael Brady & Elena Irwin, 2011. "Accounting for Spatial Effects in Economic Models of Land Use: Recent Developments and Challenges Ahead," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(3), pages 487-509, March.
    9. Bamière, Laure & David, Maia & Vermont, Bruno, 2013. "Agri-environmental policies for biodiversity when the spatial pattern of the reserve matters," Ecological Economics, Elsevier, vol. 85(C), pages 97-104.
    10. Mallory, Mindy L. & Ando, Amy W., 2014. "Implementing efficient conservation portfolio design," Resource and Energy Economics, Elsevier, vol. 38(C), pages 1-18.
    11. Gregory M. Parkhurst & Jason F. Shogren & Thomas Crocker, 2016. "Tradable Set-Aside Requirements (TSARs): Conserving Spatially Dependent Environmental Amenities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 719-744, April.
    12. 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, Springer;European Association of Environmental and Resource Economists, vol. 48(2), pages 219-242, February.
    13. 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.
    14. repec:oup:renvpo:v:12:y:2018:i:1:p:69-91. is not listed on IDEAS
    15. Katharine Sims, 2014. "Do Protected Areas Reduce Forest Fragmentation? A Microlandscapes Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(2), pages 303-333, June.
    16. Wätzold, Frank & Drechsler, Martin, 2014. "Agglomeration payment, agglomeration bonus or homogeneous payment?," Resource and Energy Economics, Elsevier, vol. 37(C), pages 85-101.
    17. Catherine L. Kling & Raymond W. Arritt & Gray Calhoun & David A. Keiser & et al., 2016. "Research Needs and Challenges in the FEW System: Coupling Economic Models with Agronomic, Hydrologic, and Bioenergy Models for Sustainable Food, Energy, and Water Systems," Center for Agricultural and Rural Development (CARD) Publications 16-wp563, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    18. Connor, Jeffery D. & Kandulu, John M. & Bark, Rosalind H., 2014. "Irrigation revenue loss in Murray–Darling Basin drought: An econometric assessment," Agricultural Water Management, Elsevier, vol. 145(C), pages 163-170.
    19. Walls, Margaret & Riddle, Anne, 2012. "Biodiversity, Ecosystem Services, and Land Use: Comparing Three Federal Policies," Discussion Papers dp-12-08, Resources For the Future.
    20. repec:eee:ecolec:v:139:y:2017:i:c:p:75-90 is not listed on IDEAS
    21. Bamiére, 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.
    22. Zhang, Wendong & Na, Chen & Irwin, Elena G. & Martin, Jay F. & Gebremariam, Seyoum Y. & Gildow, Marie, 2014. "A Coupled Spatial Economic-Hydrological Model of Cropland Transitions and Environmental Impacts," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170599, Agricultural and Applied Economics Association.
    23. repec:eee:ecolec:v:141:y:2017:i:c:p:127-135 is not listed on IDEAS
    24. 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.
    25. 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.

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