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The Biodiversity Bargaining Problem

Author

Listed:
  • Rupert Gatti

    ()

  • Timo Goeschl

    ()

  • Ben Groom

    ()

  • Timothy Swanson

    ()

Abstract

This paper describes global biodiversity conservation as a co-operative bargaining problem. We model an interdependent ‘technology rich’ North and a ‘gene rich’ South who must co-operate in the biotechnology sector in order to combine their unique and essential resources and maximise global surplus. Chief among the ideas presented here is that, in a manner similar to the ‘rational threats’ idea posited by Nash (1953), and in line with observations of pre-contractual bargaining over biodiversity conservation in Latin America (World Bank 2003), destruction of biological resources represents a real source of bargaining power to the South in determining the bargaining outcome. Not only this, but current institutional arrangements relevant to the biodiversity bargaining problem, namely the incremental cost approach enshrined in the CBD and IPRs for innovation enshrined in TRIPS, can be shown to offer a second-best solution. These arrangements may induce the strategic incentives in the game of surplus division.
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Suggested Citation

  • 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.
  • Handle: RePEc:kap:enreec:v:48:y:2011:i:4:p:609-628
    DOI: 10.1007/s10640-010-9416-z
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    References listed on IDEAS

    as
    1. 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.
    2. Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
    3. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    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. Timo Goeschl & Timothy Swanson, 2003. "Pests, Plagues, and Patents," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 561-575, 04/05.
    6. Timo Goeschl & Timothy Swanson, 2003. "On Biology and Technology: The Economics of Managing Biotechnologies," Working Papers 2003.42, Fondazione Eni Enrico Mattei.
    7. Susanne Droege & Birgit Soete, 2001. "Trade-Related Intellectual Property Rights, North-South Trade, and Biological Diversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(2), pages 149-163, June.
    8. Swanson, Timothy, 1996. "The reliance of northern economies on southern biodiversity: biodiversity as information," Ecological Economics, Elsevier, vol. 17(1), pages 1-8, April.
    9. Angelsen, Arild & Kaimowitz, David, 1999. "Rethinking the Causes of Deforestation: Lessons from Economic Models," World Bank Research Observer, World Bank Group, vol. 14(1), pages 73-98, February.
    10. Lutz-Alexander Bush & Shouyong Shi & Quan Wen, 1998. "Bargaining with Surplus Destruction," Canadian Journal of Economics, Canadian Economics Association, vol. 31(4), pages 915-932, November.
    11. King, K., 1994. "The Incremental Costs of Global Environmental Benefits," Papers 5, World Bank - Global Environment Facility.
    12. Polasky, Stephen & Costello, Christopher & McAusland, Carol, 2004. "On trade, land-use, and biodiversity," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 911-925, September.
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    Citations

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    Cited by:

    1. Faust, Heiko & Schwarze, Stefan & Beckert, Barbara & Brümmer, Bernhard & Dittrich, Christoph & Euler, Michael & Gatto, Marcel & Hauser-Schäublin, Brigitta & Hein, J. & Holtkamp, Anna Mareike & Ibanez-, 2013. "Assessment of socio-economic functions of tropical lowland transformation systems in Indonesia - sampling framework and methodological approach," EFForTS Discussion Paper Series 1, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    2. 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.
    3. Tapio Palokangas, 2017. "Regulation versus subsidies in conservation with a self-interested policy maker," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(1), pages 183-196, January.
    4. Alejandro Caparrós, 2016. "Bargaining and International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(1), pages 5-31, September.
    5. Winands, Sarah & Holm-Müller, Karin & Weikard, Hans-Peter, 2013. "The biodiversity conservation game with heterogeneous countries," Ecological Economics, Elsevier, vol. 89(C), pages 14-23.
    6. Figuieres, Charles & Leplay, Solenn & Midler, Estelle & Thoyer, Sophie, 2012. "The REDD Scheme to Curb Deforestation: A Well-designed System of Incentives?," Strategic Behavior and the Environment, now publishers, vol. 2(3), pages 239-257, September.
    7. repec:kap:enreec:v:68:y:2017:i:2:d:10.1007_s10640-016-0013-7 is not listed on IDEAS
    8. Alban Thomas & Vera Zaporozhets, 2017. "Bargaining Over Environmental Budgets: A Political Economy Model with Application to French Water Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(2), pages 227-248, October.

    More about this item

    Keywords

    Biodiversity; Incremental costs; International environmental agreements; Nash cooperative bargaining; North–south bargaining; Rational threats; Q15; Q16; Q21; O13; O34;

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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