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Implementing efficient conservation portfolio design

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  • Mallory, Mindy L.
  • Ando, Amy W.

Abstract

Modern tools for cost-effective conservation reserve site planning require the planner to have information about spatial distributions of conservation costs and benefits. Climate change creates unprecedented uncertainty about future land values and species habitat ranges, such that conservation scientists cannot map costs and benefits with certainty anymore. This paper contributes to the literature on the economics of conservation in the face of climate change uncertainty. It advances a new method for using modern portfolio theory to choose lands to protect that yield total conservation returns with less uncertainty. It explores the implications for portfolio recommendations of variation in the correlations between ecological and land-value responses to climate change. It also tests the robustness of the method to shortcuts that might be taken to simplify analysis, identifying problems that arise if conservation costs are ignored in portfolio analysis and demonstrating when portfolio recommendations are sensitive to how ecological benefits are quantified.

Suggested Citation

  • Mallory, Mindy L. & Ando, Amy W., 2014. "Implementing efficient conservation portfolio design," Resource and Energy Economics, Elsevier, vol. 38(C), pages 1-18.
  • Handle: RePEc:eee:resene:v:38:y:2014:i:c:p:1-18
    DOI: 10.1016/j.reseneeco.2014.05.001
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    Cited by:

    1. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Sturm, Astrid & Wätzold, Frank, 2022. "Time to consider the timing of conservation measures: designing cost-effective agri-environment schemes under climate change," MPRA Paper 113877, University Library of Munich, Germany.
    2. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Leins, Johannes A. & Radtke, Kai & Schulz, Björn & Sturm, Astrid & Wätzold, Frank, 2021. "Cost-effective conservation in the face of climate change: combining ecological-economic modelling and climate science for the cost-effective spatio-temporal allocation of conservation measures in agr," MPRA Paper 105608, University Library of Munich, Germany.
    3. Sierra-Altamiranda, Alvaro & Charkhgard, Hadi & Eaton, Mitchell & Martin, Julien & Yurek, Simeon & Udell, Bradley J., 2020. "Spatial conservation planning under uncertainty using modern portfolio theory and Nash bargaining solution," Ecological Modelling, Elsevier, vol. 423(C).
    4. Vinent, Orencio Duran & Johnston, Robert J. & Kirwan, Matthew L. & Leroux, Anke D. & Martin, Vance L., 2019. "Coastal dynamics and adaptation to uncertain sea level rise: Optimal portfolios for salt marsh migration," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    5. Oliver Schöttker & Frank Wätzold, 2022. "Climate Change and the Cost-Effective Governance Mode for Biodiversity Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(2), pages 409-436, June.
    6. Adrian A. Lopes & Shady S. Atallah, 2020. "Worshipping the Tiger: Modeling Non-use Existence Values of Wildlife Spiritual Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(1), pages 69-90, May.
    7. Elofsson, Katarina & Hiron, Matthew & Kačergytė, Ineta & Pärt, Tomas, 2023. "Ecological compensation of stochastic wetland biodiversity: National or regional policy schemes?," Ecological Economics, Elsevier, vol. 204(PA).
    8. Seong-Hoon Cho & Bijay P. Sharma, 2020. "Optimal spatial budget distribution of forest carbon payments that balances the returns and risks associated with conservation costs," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7239-7267, December.
    9. Qiuzhuo Ma & Krishna P Paudel & Liting Gu & Xiaowei Wen, 2018. "An application of a cardinality-constrained multiple benchmark tracking error model on a plant enterprise selection problem," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(5), pages 677-721.
    10. Fraschini, Filippo & Hunt, Alistair & Zoboli, Roberto, 2022. "Decision tools for adaptation to climate change: Portfolio analysis of tea plantation investments in Rwanda," Ecological Economics, Elsevier, vol. 200(C).
    11. Gerling, Charlotte & Wätzold, Frank, 2019. "Evaluating policy instruments for the conservation of biodiversity in a changing climate," MPRA Paper 95512, University Library of Munich, Germany.
    12. Alvarez, Sergio & Larkin, Sherry L. & Ropicki, Andrew, 2017. "Optimizing provision of ecosystem services using modern portfolio theory," Ecosystem Services, Elsevier, vol. 27(PA), pages 25-37.
    13. Gerling, Charlotte & Drechsler, Martin & Keuler, Klaus & Leins, Johannes A. & Radtke, Kai & Schulz, Björn & Sturm, Astrid & Wätzold, Frank, 2021. "Modelling the cost-effective spatio-temporal allocation of conservation measures in agricultural landscapes facing climate change," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242352, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Conservation; Reserve-site selection; Climate change; Uncertainty; Portfolio; Risk; Spatial; Prairie Pothole Region;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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