Value for Money: Protecting Endangered Species on Danish Heathland

Biodiversity policies in the European Union (EU) are mainly implemented through the Birds and Habitats Directives as well as the establishment of Natura 2000, a network of protected areas throughout the EU. Considerable resources must be allocated for fulfilling the Directives and the question of optimal allocation is as important as it is difficult. In general, economic evaluations of conservation targets at most consider the costs and seldom the welfare economic benefits. In the present study, we use welfare economic benefit estimates concerning the willingness-to-pay for preserving endangered species and for the aggregate area of heathland preserved in Denmark. Similarly, we obtain estimates of the welfare economic cost of habitat restoration and maintenance. Combining these welfare economic measures with expected species coverage, we are able to estimate the potential welfare economic contribution of a conservation network. We compare three simple nonprobabilistic strategies likely to be used in day-to-day policy implementation: i) a maximum selected area strategy, ii) a hotspot selection strategy, and iii) a minimizing cost strategy, and two more advanced and informed probabilistic strategies: i) a maximum expected coverage strategy and ii) a strategy for maximum expected welfare economic gain. We show that the welfare economic performance of the strategies differ considerably. The comparison between the expected coverage and expected welfare shows that for the case considered, one may identify an optimal protection level above which additional coverage only comes at increasing welfare economic loss.