The efficiency of voluntary incentive policies for preventing biodiversity loss

Abstract

A B S T R A C THabitat loss is a primary cause of loss of biodiversity but conserving habitat for species presents challenges. Land parcels differ in their ability to produce returns for landowners and landowners may have private information about the value of the land to them. Land parcels also differ in the type and quality of habitat and the spatial pattern of land use across multiple landowners is important for determining the conservation value of parcels. This paper analyzes the relative efficiency of simple voluntary incentive-based policies in achieving biodiversity conservation objectives. This topic is important not just for biodiversity conservation but for any effort to provide a public good requiring coordination across multiple decision-makers who have some degree of private information. We develop a method that integrates spatially explicit data, an econometric model of private land-use decisions, landscape simulations, a biological model of biodiversity as a function of landscape pattern, and an algorithm that estimates the set of efficient solutions. These methods allow us to simulate landowner responses to policies, measure the consequences of these decisions for biodiversity conservation, and compare these outcomes to efficient outcomes to show the relative efficiency of various policy

The Impact of Land-Use Change on Ecosystem Services, Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

“…Some existing policies partially align private and social returns by paying landowners for conservation that increases ecosystem services (e.g., the Conservation Reserve Program of the U.S. Department of Agriculture). Further work evaluating both the theory and practice of payments for ecosystem services (e.g., Pagiola and Platais 2007;Jack et al 2008), responses to policy interventions and the resulting spatial pattern of land use (e.g., Andam et al 2008;Sánchez-Azofeifa et al 2007), and analysis of the impact of alternative policy design on the provision of ecosystem services at landscape scales (e.g., Lewis et al 2010;Nelson et al 2008) will help improve policy aimed at increasing the net social value of services from ecosystems. Designing policy to improve the efficiency of outcomes is not a simple task.…”

Implementing the optimal provision of ecosystem services

“…Lewis et al (10) apply such methods to a large-scale integer programming problem for the Willamette Basin of Oregon; they approximate the optimal solution under the assumption that the regulator has complete information about costs and evaluate a range of targeted PES policies under the assumption that the regulator knows only the cost distribution. Lewis et al (10) find that the net benefits under the (approximate) optimal solution are always larger-and typically much larger-than those generated by the targeted PES policies. These results suggest that the proposed auction mechanism will greatly outperform policies that are developed with incomplete information about costs.…”

Avoiding the loss of shade coffee plantations: how to derive conservation payments for risk-averse land-users

“…Price volatility is commonly used to model uncertainty associated with investments in agriculture, because farmers often decide to enter and exit a Lewis et al 2011). Following this criteria, we use price volatility to integrate risk into our modeling.…”