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The Social Value of Biodiversity for R&D

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  • Timo Goeschl

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  • Timothy Swanson

Abstract

The value of genetic resources for use in research and development (R&D)activities has been the subject of a literature modelling the activity as onewhere individual firms engage in optimal search. Here we develop a moregeneralised framework in which genetic resources are used in R&D at thebase of an industry that addresses recurring problems of resistance, as inthe pharmaceutical or plant breeding industries. The R&D process is onein which firms are engaging in a continuing contest of innovation againsta background of both creative destruction (Schumpeterian competition) andadaptive destruction (natural selection and adaptation). This frameworkdemonstrates that the search model is conceptually inadequate because itfails to incorporate the important dynamic characteristics of biologicalphenomena. We then demonstrate the important differences between firm-based valuation of genetic resources and the social value of geneticresources for use in this contest of innovation. There are six externalitiesin private patent-based genetic resource valuation, and five of theseindicate that private valuations will under-estimate social values. Copyright Kluwer Academic Publishers 2002

Suggested Citation

  • Timo Goeschl & Timothy Swanson, 2002. "The Social Value of Biodiversity for R&D," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(4), pages 477-504, August.
  • Handle: RePEc:kap:enreec:v:22:y:2002:i:4:p:477-504 DOI: 10.1023/A:1019869119754
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    References listed on IDEAS

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    1. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    2. Barrett, Scott, 1992. "Economic growth and environmental preservation," Journal of Environmental Economics and Management, Elsevier, vol. 23(3), pages 289-300, November.
    3. Kamien,Morton I. & Schwartz,Nancy L., 1982. "Market Structure and Innovation," Cambridge Books, Cambridge University Press, number 9780521293853, March.
    4. Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, vol. 57(3), pages 369-391, July.
    5. Martin L. Weitzman, 2000. "Economic Profitability Versus Ecological Entropy," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 237-263.
    6. Mason, Robin & Swanson, Timothy, 2002. "The costs of uncoordinated regulation," European Economic Review, Elsevier, vol. 46(1), pages 143-167, January.
    7. Amy Craft & R. Simpson, 2001. "The Value of Biodiversity in Pharmaceutical Research with Differentiated Products," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(1), pages 1-17, January.
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    Cited by:

    1. Groth, Christian & Ricci, Francesco, 2011. "Optimal growth when environmental quality is a research asset," Research in Economics, Elsevier, pages 340-352.
    2. Rupert Gatti & Timo Goeschl & Ben Groom & Timothy Swanson, 2011. "The Biodiversity Bargaining Problem," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(4), pages 609-628, April.
    3. Tim Swanson & Ben Groom, 2012. "Regulating global biodiversity: what is the problem?," Oxford Review of Economic Policy, Oxford University Press, vol. 28(1), pages 114-138, Spring.
    4. Kassar, Ilhem & Lasserre, Pierre, 2004. "Species preservation and biodiversity value: a real options approach," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 857-879, September.
    5. Sarr, Mare & Goeschl, Timo & Swanson, Tim, 2008. "The value of conserving genetic resources for R&D: A survey," Ecological Economics, Elsevier, vol. 67(2), pages 184-193, September.
    6. Damodaran, A., 2009. "Risk management instruments for debt driven conservation efforts: The case of India's Project Tiger," Ecological Economics, Elsevier, vol. 68(3), pages 625-633, January.
    7. Salvatore Di Falco & Jean-Paul Chavas, 2008. "Rainfall Shocks, Resilience, and the Effects of Crop Biodiversity on Agroecosystem Productivity," Land Economics, University of Wisconsin Press, vol. 84(1), pages 83-96.

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