Who should benefit from environmental policies? Social preferences and nonmarket values for the distribution of environmental improvements

Abstract

AbstractThe literature is replete with valuations of the costs and benefits of environmental change, yet the issue of where those impacts fall across society is rarely considered. This is a significant knowledge gap given clear evidence of social preferences regarding distributional effects reflected in both policy and protest. As an initial contribution, we examine preferences regarding projects designed to more than offset the biodiversity impacts of housing developments in England, as mandated under the UK's Net Gain legislation. Employing a nationally representative sample, a Discrete Choice Experiment values options for alternative characteristics and location of both development and offset sites, including their situation relative to both the respondent's home and neighborhoods of different socio‐economic status. This defines sets of “winners” and “losers” varying across wealth levels. Results show that respondents did not necessarily prefer that the communities losing biodiversity due to development must also be the beneficiaries of the biodiversity enhancement under Net Gain rules. This is particularly the case where the communities losing biodiversity are located far from the respondent and are high wealth. Instead, our findings show that respondents are willing to pay more for Net Gain policies delivering biodiversity improvements to low or average (rather than high) wealth communities. These results highlight the importance of considering distributional concerns when measuring the welfare impacts of environmental policies and the potential role of such policies as redistributive tools to reduce social inequalities.