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Regulating Global Biodiversity: What is the Problem?

  • Tim Swanson

    (Andre Hoffmann Chair of Environmental Economics, Graduate Institute- Geneva, and Director of the Centre for International Environmental Studies)

  • Ben Groom

    (School for Oriental and Asian Studies, University of London)

We distinguish between local problems of biodiversity loss and global ones, where international cooperation is required. Global biodiversity regulation involves choosing the optimal stopping rule regarding global land conversions, in order to ensure that some areas of unconverted natural reserves remain to support the production sector that exists on converted lands. The basic difficulty with implementing a solution to this global problem lies in the asymmetry in endowments between those states that have previously converted, and those that have not. We demonstrate that the fundamental problem of global biodiversity regulation is similar to the bargaining problem analysed by Nash, Rubinstein and others. There are benefits from global land conversion, and there must be agreement on their distribution before the conversion process can be halted. Since the institutions addressing global biodiversity problems are either highly ineffectual (benefit sharing agreements, prior informed consent clauses) or very extreme (incremental cost contracts), the biodiversity bargaining problem remains unresolved. For this reason we anticipate that suboptimal conversions will continue to occur, as a way of protesting the ineffective and unfair approaches employed in addressing this problem to date.

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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2012.31.

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Date of creation: May 2012
Date of revision:
Handle: RePEc:fem:femwpa:2012.31
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  1. Daan van Soest & Robert Lensink, 2000. "Foreign Transfers and Tropical Deforestation: What Terms of Conditionality?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 389-399.
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