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Capturing the pharmaceutical value of biodiversity in a developing country

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  • Edward Barbier
  • Bruce Aylward

Abstract

The conservation of biodiversity is increasingly being defined as a process made up of three components—saving, studying and sustainably using biodiversity. If the conservation of process is expanded to incorporate the need for both the protection of biodiversity—either in situ or ex situ—and the generation of valuable information about biodiversity, an important issue is the correct balance of investment in these two types of activities. This paper explores this issue by focusing on efforts in a developing country to capture the pharmaceutical potential of biodiversity and species information. A model of biodiversity investment choice is developed, and an analysis of royalty returns to effort in biodiversity protection, taxonomic information and the collection of biotic samples is conducted based on data from Costa Rica. The results suggest that although a country can be adequately compensated for its investment in the generation of taxonomic information, it is unlikely that pharmaceutical prospecting alone will cover the high opportunity costs of biodiversity protection. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Edward Barbier & Bruce Aylward, 1996. "Capturing the pharmaceutical value of biodiversity in a developing country," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 8(2), pages 157-181, September.
    • Handle: RePEc:kap:enreec:v:8:y:1996:i:2:p:157-181
    DOI: 10.1007/BF00357362
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    References listed on IDEAS

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    1. DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G. & Lasagna, Louis, 1991. "Cost of innovation in the pharmaceutical industry," Journal of Health Economics, Elsevier, vol. 10(2), pages 107-142, July.
    2. Simpson, R David & Sedjo, Roger A & Reid, John W, 1996. "Valuing Biodiversity for Use in Pharmaceutical Research," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 163-185, February.
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    Cited by:

    1. Rausser, Gordon & Small, Arthur, 1997. "Bioprospecting with Prior Ecological Information," CUDARE Working Papers 198653, University of California, Berkeley, Department of Agricultural and Resource Economics.
    2. Henk Folmer & G. Cornelis van Kooten, 2006. "Deforestation," Working Papers 2006-06, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
      • Folmer, Henk & van Kooten, G. Cornelis, 2006. "Deforestation," Working Papers 37035, University of Victoria, Resource Economics and Policy.
    3. George B. Frisvold & Steven M. Moss & Andrea Hodgson & Mary E. Maxon, 2021. "Understanding the U.S. Bioeconomy: A New Definition and Landscape," Sustainability, MDPI, vol. 13(4), pages 1-24, February.
    4. Ramesh Govindaraj & Gnanaraj Chellaraj, 2002. "The Indian Pharmaceutical Sector : Issues and Options for Health Sector Reform," World Bank Publications - Books, The World Bank Group, number 15231, December.
    5. Artuso, Anthony, 2002. "Bioprospecting, Benefit Sharing, and Biotechnological Capacity Building," World Development, Elsevier, vol. 30(8), pages 1355-1368, August.
    6. Pagiola, Stefano & Zhang, Wei & Colom, Ale, 2009. "Can payments for watershed services help save biodiversity? A spatial analysis of highland Guatemala," MPRA Paper 13728, University Library of Munich, Germany.
    7. Onofri, Laura, 2014. "Material transfer agreements: An economic and econometric analysis," Ecological Economics, Elsevier, vol. 107(C), pages 422-430.
    8. Francisco Cabo & Guiomar Martín-Herrán, 2006. "North–South transfers vs biodiversity conservation: a trade differential game," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(2), pages 249-278, June.
    9. Frisvold, George B. & Condon, Peter T., 1998. "The convention on biological diversity and agriculture: Implications and unresolved debates1," World Development, Elsevier, vol. 26(4), pages 551-570, April.
    10. Sotelsek, Daniel F. & Azqueta Oyarzún, Diego, 1999. "Comparative advantages and the exploitation of environmental resources," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.

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