Landowners’ ability to leverage in negotiations over habitat conservation

Abstract

Voluntary conservation agreements are commonly used to stem the impact of habitat destruction and degradation on terrestrial biodiversity. Past studies that aim to inform how resources for conservation should be allocated across land parcels have assumed the costs of securing conservation on sites can be estimated solely on the basis of the value of alternative land uses. However, in a voluntary negotiation, a landowner could hold-out for a higher payment based on a conservation group or agency's willingnessto-pay by leveraging the value of biodiversity on the property. We examine landowners' ability to leverage and the consequences for conservation planning. To explore this, we first use an analytical approximation that simplifies the situation to one where a conservation group prioritizes one site for acquisition. Landowners' ability to hold-out for higher payments in this situation ranges from approximately 17% to 55% of the value of alternative land uses on the site. We show that landowners' ability to hold-out for higher payments is more sensitive to variance in the value of alternative land uses than variance in the biodiversity value across Electronic supplementary material The online version of this article (properties and is highest when the two factors negatively covary. Next, we consider multi-site selection decisions accounting for community complementarity across parcels. We find that leverage potential can be significantly higher in this context, with a maximum increase of 237% of the value of alternative land uses, and that community irreplaceability is correlated with landowners' ability to leverage. If one landowner holds out for a higher payment, it has implications for what other parcels should be priorities for protection.

Inclusion of costs in conservation planning depends on limited datasets and hopeful assumptions

“…As has been found in other applications of conservation planning, we might expect that these rankings of smaller numbers of choices will be more robust to uncertainty in the underlying data than will absolute benefit–cost ratios. However, in the specific context of acquiring parcels for protection, this thinning in the choice set can introduce other issues and concerns (see Lennox et al . and Lennox and Armsworth).…”

“…However, when it comes to acquisition costs, there may not be one unique value that is relevant. Instead, there can be an interval of possible acquisition costs for any given parcel, one bounded below by the current landowners’ willingness to accept (WTA) the terms of an acquisition deal and one bounded above by the conservation organization's willingness to pay (WTP) to acquire the property . A landowner's WTA will depend on their valuation of possible alternative uses of the land and the transaction costs they would face to get an agreement in place.…”

The Ability of Landowners and Their Cooperatives to Leverage Payments Greater Than Opportunity Costs from Conservation Contracts

“…a & d). In our previous analysis of these issues (Lennox et al ), we found that site complementarity increases the leverage potential of landowners when compared with situations in which sites are substitutes, such as maximizing species occurrences. Taken alongside the fact that site complementarity allowed cooperatives to gain substantial amounts of surplus, it appears that recognizing complementarity can result in negative economic consequences for conservation groups.…”

“…We began to investigate these ideas in Lennox et al (), where we modeled the situation in which a conservation group prioritizes one site for protection. We then determined the maximum amount the landowner of this site could demand above her or his WTA, a value we termed the landowner's leverage potential.…”

Buying spatially-coordinated ecosystem services: An experiment on the role of auction format and communication

“…It is nearly impossible to purchase B6 under Uniform prices -because of its high production value, even a modest price markup would require all plots (not adjacent to the NP) to be purchased at a very high price. This is similar to the "hold out" problem considered by Lennox et al (2012). Thus, just one high-PV plot essentially excludes complete corridors in given row.…”