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Bringing the economics of biodiversity into policy and decision-making: A target and cost-based approach to pricing biodiversity

Author

Listed:
  • Ben Groom
  • Joseph Lowe
  • Sophus zu Ermgassen
  • E. J. Milner-Gulland
  • Thomas Atkins
  • Ben Balmford
  • Amy Binner
  • Amber Butler
  • Brett Day
  • Natalie Duffus
  • Rosie Hails
  • Hannah Maier-Peveling
  • Mattia Mancini
  • Sarah Meier
  • Hannah Nicholas
  • Daniele Rinaldo
  • Robin Smale
  • Pat Snowdon
  • Frank Venmans
  • Ian J. Bateman

Abstract

Given ongoing, human-induced, loss of wild species we propose the Target and Cost Analysis (TCA) approach as a means of incorporating biodiversity within government appraisals of public spending. Influenced by how carbon is priced in countries around the world, the resulting biodiversity shadow price reflects the marginal cost of meeting government targets while avoiding disagreements on the use of willingness to pay measures to value biodiversity. Examples of how to operationalize TCA are developed at different scales and for alternative biodiversity metrics, including extinction risk for Europe and species richness in the UK. Pricing biodiversity according to agreed targets allows trade-offs with other wellbeing-enhancing uses of public funds to be sensibly undertaken without jeopardizing those targets, and is compatible with international guidelines on Cost Benefit Analysis.

Suggested Citation

  • Ben Groom & Joseph Lowe & Sophus zu Ermgassen & E. J. Milner-Gulland & Thomas Atkins & Ben Balmford & Amy Binner & Amber Butler & Brett Day & Natalie Duffus & Rosie Hails & Hannah Maier-Peveling & Mat, 2026. "Bringing the economics of biodiversity into policy and decision-making: A target and cost-based approach to pricing biodiversity," Papers 2601.16801, arXiv.org.
    • Handle: RePEc:arx:papers:2601.16801
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    References listed on IDEAS

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    1. François Keck & Tianna Peller & Roman Alther & Cécilia Barouillet & Rosetta Blackman & Eric Capo & Teofana Chonova & Marjorie Couton & Lena Fehlinger & Dominik Kirschner & Mara Knüsel & Lucile Muneret, 2025. "The global human impact on biodiversity," Nature, Nature, vol. 641(8062), pages 395-400, May.
    2. David Leclère & Michael Obersteiner & Mike Barrett & Stuart H. M. Butchart & Abhishek Chaudhary & Adriana Palma & Fabrice A. J. DeClerck & Moreno Marco & Jonathan C. Doelman & Martina Dürauer & Robin , 2020. "Bending the curve of terrestrial biodiversity needs an integrated strategy," Nature, Nature, vol. 585(7826), pages 551-556, September.
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