Opportunity Costs Of Conservation Research Articles

Conservation and livelihood outcomes of payment for ecosystem services in the Ecuadorian Andes: What is the potential for ‘win–win’?

Payment for ecosystem services programs are being implemented in a wide variety of settings, but whether and in what contexts such programs present ‘win–win’ scenarios that simultaneously improve human well-being and achieve conservation goals remains poorly understood. Based on semi-structured interviews with early program participants enrolling either collectively- or individually-held land, we evaluated whether and how SocioPáramo, a national-scale PES program targeting Ecuadorian Andean grasslands (páramos), has the potential to contribute to local livelihoods (financial, natural, social, human, and physical capital) and sustainable resource management. Low conservation opportunity costs associated with pre-existing constraints on land use and the existence of alternative livelihood options appeared to facilitate largely positive financial capital outcomes, although we found reduced financial capital among some smaller and medium-sized landholders who were required to eliminate burning and grazing. We found the greatest potential for improved social, financial, and natural capital among well-organized community participants enrolling collective land, while greater attention to building capacity of individual smaller landholders could improve outcomes for those participants. These results help fill a gap in knowledge by drawing on empirical data to demonstrate how divergent outcomes have begun to emerge among different groups of SocioPáramo participants, providing lessons for PES program design.

Policyscape—A Spatially Explicit Evaluation of Voluntary Conservation in a Policy Mix for Biodiversity Conservation in Norway

We use spatially explicit indicators for biodiversity conservation status and opportunity costs of conservation to evaluate the role of voluntary forest conservation in a mix of policy instruments distributed across a landscape. We define a spatially explicit evaluation of a policy mix as a “policyscape analysis.” A policyscape analysis includes a comparison of (1) actual spatial overlap of instruments, (2) “functional overlap” of instruments in a cost-effectiveness space, and (3) complementary spatial targeting of instruments as computed by reserve site selection models. To illustrate, we evaluate the actual spatial coverage in cost-effectiveness space of Norway's public protected areas and private voluntary forest conservation. We use proxies for conservation value and opportunity cost—a national Nature Index for forests and forest productivity classes. We conclude by discussing the empirical challenges of our “policyscape analysis.” These have bearing on future “return-on-investment” analysis and reserve site selection modeling in Norway.

Effective support for community resource management

A popular alternative to state-led resource management is community resource management. This decentralised approach is potentially more efficient, but is not necessarily stable. We study this issue using coalition theory, arguing that some of the conditions for effective community resource management may induce the formation of a coalition of community members – rather than the community as a whole – that cooperate in resource management. We employ a classical model specification from the literature on international environmental agreements to analyse the stability of such coalitions. A novel observation that we make in this paper is that coalitions may be the target of intervention in order to boost community conservation effort. To analyse this possibility, we extend the model with a payment to the coalition, which can be interpreted as a payment for the provision of ecosystem services. Our results show that such payments can stabilise larger and otherwise unstable coalitions, and thereby increase community conservation effort. Moreover, we solve the selection problem of optimal payment by an external agent and we show how this optimal payment relates to the communities' opportunity costs of conservation. These results are relevant for the theoretical literature on coalition theory, the empirical literature on community resource management, and the policy debate on the potential impact of incentive mechanisms for community-based conservation.

Sharing Future Conservation Costs—Response

In their letter, Sheil et al. appear to have misinterpreted several key points. Far from ignoring local opportunity costs, we assumed that for reasons of fairness and effectiveness, establishing new protected areas will require the full opportunity costs of conservation to be paid (Supplementary

Opportunity costs of providing crop diversity in organic and conventional farming: would targeted environmental policies make economic sense?

Targeted environmental policies for farmlands may improve the cost-efficiency of conservation programs if one can identify the farms that produce public goods, or environmental outputs, with the least cost. We derive shadow values of producing crop diversity on conventional and organic crop farms to examine their opportunity costs of conservation. Non-parametric distance functions are estimated by applying data envelopment analysis to a sample of Finnish crop farms for the period 1994 – 2002. Our results show that there is variation in the shadow values between farms and the technologies adopted. The extent of cost heterogeneity and farms’ potential for specialization in the production of environmental outputs determine whether voluntary programs such as auctions for conservation payments are economically reasonable.

Conserving biodiversity in production landscapes

Alternative land uses make different contributions to the conservation of biodiversity and have different implementation and management costs. Conservation planning analyses to date have generally assumed that land is either protected or unprotected, and that the unprotected portion does not contribute to conservation goals. We develop and apply a new planning approach that explicitly accounts for the contribution of a diverse range of land uses to achieving conservation goals. Using East Kalimantan (Indonesian Borneo) as a case study, we prioritize investments in alternative conservation strategies and account for the relative contribution of land uses ranging from production forest to well-managed protected areas. We employ data on the distribution of mammals and assign species-specific conservation targets to achieve equitable protection by accounting for life history characteristics and home range sizes. The relative sensitivity of each species to forest degradation determines the contribution of each land use to achieving targets. We compare the cost effectiveness of our approach to a plan that considers only the contribution of protected areas to biodiversity conservation, and to a plan that assumes that the cost of conservation is represented by only the opportunity costs of conservation to the timber industry. Our preliminary results will require further development and substantial stakeholder engagement prior to implementation; nonetheless we reveal that, by accounting for the contribution of unprotected land, we can obtain more refined estimates of the costs of conservation. Using traditional planning approaches would overestimate the cost of achieving the conservation targets by an order of magnitude. Our approach reveals not only where to invest, but which strategies to invest in, in order to effectively and efficiently conserve biodiversity.

Assessing opportunity costs of conservation: Ingredients for protected area management in the Kakamega Forest, Western Kenya

The Kakamega Forest is the only remaining tropical rainforest fragment in Western Kenya and hosts large numbers of endemic animal and plant species. Protected areas were established decades ago in order to preserve the forest's unique biodiversity from being converted into agricultural land by the regions large number of small-scale farmers. Nonetheless, recent research shows that degradation continues at alarming rates. In this paper we address an important challenge faced by protected area management, namely, the design of a cost-effective incentive scheme that balances local demand for subsistence non-timber forest products against conservation interests. Using primary data collected from 369 randomly selected farm-households we combine a farm-household classification with mathematical programming in order to estimate the opportunity costs of conserving the Kakamega Forest and restricting access to non-timber forest product resources. We validate our model and analyze the impact of changes in major economic frame conditions on our results before we derive recommendations for an improved protected area management in the study region. Our findings suggest that a more flexible approach to determining the price of recently established forest product extraction permits would greatly enhance management efficiency without significantly compromising local wellbeing.

The orangutan–oil palm conflict: economic constraints and opportunities for conservation

The future of the orangutan (Pongo spp.) is far from secure despite the species’ high profile and media attention. The traditional threat to the orangutan has been widespread logging, but the continuing conversion of remaining habitat for oil palm (Elaeis guineensis) cultivation is hastening its extinction in the wild. This situation is driven by a robust global market for palm oil as a vegetable oil and biofuel. In tackling this conservation problem, therefore, economic factors cannot be overlooked. This article analyses these factors and how they curtail effective orangutan conservation. Of significance are the high opportunity costs of orangutan conservation and market failures associated with the public-goods nature of the orangutan’s forest habitat. Conservationists should consider these constraints when formulating remedial action. This article assesses strategies that reduce the opportunity cost of conserving habitat (via supply-side approaches that divert oil palm cultivation away from forests) and enhance the realisable value of orangutan habitat (by capitalising on the demand for non-market values such as carbon storage). It is concluded that the former group of strategies are likely to have limited effect on curtailing deforestation, but with the right institutional policies in place they can act as stopgaps while strategies involving carbon financing and payments for biodiversity develop sufficiently to render habitat retention financially competitive.

Environmental service payments: Evaluating biodiversity conservation trade-offs and cost-efficiency in the Osa Conservation Area, Costa Rica

The cost-efficiency of payments for environmental services (PES) to private landowners in the Osa Conservation Area, Costa Rica, is evaluated in terms of the trade-off between biodiversity representation and opportunity costs of conservation to agricultural and forestry land-use. Using available GIS data and an ‘off-the-shelf’ software application called TARGET, we find that the PES allocation criteria applied by authorities in 2002–2003 were more than twice as cost-efficient as criteria applied during 1999–2001. Results show that a policy relevant assessment of the cost-effectiveness of PES relative to other conservation policies can be carried out at regional level using available studies and GIS data. However, there are a number of data and conceptual limitations to using heuristic optimisation algorithms in the analysis of the cost-efficiency of PES. Site specific data on probabilities of land-use change, and a detailed specification of opportunity costs of farm land, labour and capital are required to use algorithms such as TARGET for ranking individual sites based on cost-efficiency. Despite its conceptual soundness for regional conservation analysis, biodiversity complementarity presents a practical challenge as a criterion for PES eligibility at farm level because it varies depending on the set of areas under PES contracts at any one time.

Potential Cost-Effectiveness of Incentive Payment Programs for the Protection of Non-Industrial Private Forests

<i>This study assesses the potential cost-effectiveness of incentive payment programs relative to traditional, top-down regulatory programs for biological conservation. We develop site-level estimates of the opportunity cost and non-monetized biological benefits of protecting biodiversity hotspots in Finnish non-industrial private forests. We then use these estimates to contrast and compare the cost-effectiveness of alternative conservation programs. Our results suggest that incentive payment programs, which tacitly capitalize on landowners’ private knowledge about the opportunity costs of conservation, may be considerably more cost-effective than traditional, top-down regulatory programs.</i> (JEL Q23)

Assessing Ecosystem Services to Identify Conservation Priorities

Assessing Ecosystem Services to Identify Conservation Priorities

Mapping the Economic Costs and Benefits of Conservation

Resources for biodiversity conservation are severely limited, requiring strategic investment. Understanding both the economic benefits and costs of conserving ecosystems will help to allocate scarce dollars most efficiently. However, although cost-benefit analyses are common in many areas of policy, they are not typically used in conservation planning. We conducted a spatial evaluation of the costs and benefits of conservation for a landscape in the Atlantic forests of Paraguay. We considered five ecosystem services (i.e., sustainable bushmeat harvest, sustainable timber harvest, bioprospecting for pharmaceutical products, existence value, and carbon storage in aboveground biomass) and compared them to estimates of the opportunity costs of conservation. We found a high degree of spatial variability in both costs and benefits over this relatively small (~3,000 km2) landscape. Benefits exceeded costs in some areas, with carbon storage dominating the ecosystem service values and swamping opportunity costs. Other benefits associated with conservation were more modest and exceeded costs only in protected areas and indigenous reserves. We used this cost-benefit information to show that one potential corridor between two large forest patches had net benefits that were three times greater than two otherwise similar alternatives. Spatial cost-benefit analysis can powerfully inform conservation planning, even though the availability of relevant data may be limited, as was the case in our study area. It can help us understand the synergies between biodiversity conservation and economic development when the two are indeed aligned and to clearly understand the trade-offs when they are not.

The Efficiency of Payments for Environmental Services in Tropical Conservation

Payments for environmental services (PES) represent a new, more direct way to promote conservation. They explicitly recognize the need to address difficult trade-offs by bridging the interests of landowners and external actors through compensations. Theoretical assessments praise the advantages of PES over indirect approaches, but in the tropics PES application has remained incipient. Here I aim to demystify PES and clarify its scope for application as a tool for tropical conservation. I focus on the supply side of PES (i.e., how to convert PES funding into effective conservation on the ground), which until now has been widely neglected. I reviewed the PES literature for developing countries and combined these findings with observations from my own field studies in Latin America and Asia. A PES scheme, simply stated, is a voluntary, conditional agreement between at least one "seller" and one "buyer" over a well-defined environmental service--or a land use presumed to produce that service. Major obstacles to effective PES include demand-side limitations and a lack of supply-side know-how regarding implementation. The design of PES programs can be improved by explicitly outlining baselines, calculating conservation opportunity costs, customizing payment modalities, and targeting agents with credible land claims and threats to conservation. Expansion of PES can occur if schemes can demonstrate clear additionality (i.e., incremental conservation effects vis-à-vis predefined baselines), if PES recipients' livelihood dynamics are better understood, and if efficiency goals are balanced with considerations of fairness. PES are arguably best suited to scenarios of moderate conservation opportunity costs on marginal lands and in settings with emerging, not-yet realized threats. Actors who represent credible threats to the environment will more likely receive PES than those already living in harmony with nature. A PES scheme can thus benefit both buyers and sellers while improving the resource base, but it is unlikely to fully replace other conservation instruments.

Modeling Opportunity Costs of Conservation in Transitional Landscapes

Conservation scientists recognize the urgency of incorporating opportunity costs into conservation planning. Despite this, applications to date have been limited, perhaps partly because of the difficulty in determining costs in regions with limited data on land prices and ownership. We present methods for estimating opportunity costs of land preservation in landscapes or ecoregions that are a changing mix of agriculture and natural habitat. Our approach derives from the literature on estimating land values as opportunity costs of alternate land uses and takes advantage of general availability of necessary data, even in relatively data-poor regions. The methods integrate probabilities of habitat conversion with region-wide estimates of economic benefits from agricultural land uses and estimate land values with a discount rate to convert annual values into net present values. We applied our method in a landscape undergoing agricultural conversion in Paraguay. Our model of opportunity costs predicted an independent data set of land values and was consistent with implicit discount rates of 15-25%. Model-generated land values were strongly correlated with actual land values even after correcting for the effect of property size and proportion of property that was forested. We used the model to produce a map of opportunity costs and to estimate the costs of conserving forest within two proposed corridors in the landscape. This method can be applied to conservation planning in situations where natural habitat is currently being converted to market-oriented land uses. Incorporating not only biological attributes but also socioeconomic data can help in the design of efficient networks of protected areas that represent biodiversity at minimum costs.

The economic and environmental impact of trade in forest reserve obligations: a simulation analysis of options for dealing with habitat heterogeneity

A tradeable development rights (TDR) program focusing on biodiversity conservation faces a crucial problem: defining which areas of habitat should be considered equivalent. Restricting the trading scope to a narrow area could boost the range of biodiversity conserved but could increase the opportunity cost of conservation. The issue is relevant to Brazil, where TDR-like policies are emerging. Long-standing laws require each rural property to maintain a legal forest reserve (reserva legal) of at least 20%, but emerging policies allow some tradeability of this obligation. This paper uses a simple, spatially explicit model to simulate a hypothetical state-level program. We find that wider trading scopes drastically reduce landholder costs of complying with this regulation and result in environmentally preferable landscapes.

Importance, cause and effect of bushmeat hunting in the Udzungwa Mountains, Tanzania: Implications for community based wildlife management

Community Based Wildlife Management (CBWM) has been suggested as a conservation strategy in response to bushmeat hunting in the Udzungwa Mountains within the Eastern Afromontane biodiversity hotspot. The feasibility of CBWM based on meat cropping was therefore evaluated in New Dabaga/Ulangambi Forest Reserve (NDUFR). Comparison of relative wildlife densities with West Kilombero Scarp Forest Reserve, which is subject to only low hunting pressure, indicate that most relevant populations are severely depleted ( Cephalophus monticola, C. harveyi and C. spadix, Potamochoerus larvatus) and hence that sustainable harvesting currently is not possible in NDUFR. Records of catch from hunters in the villages surrounding NDUFR indicate that bushmeat is of relatively low importance in terms of use and contribution to protein intake. Proximity to NDUFR and secondarily population size in the different villages is positively correlated with hunting intensity and depletion of wildlife. Comparisons between hunters and non-hunters in terms of wealth measures show that hunting is linked to poverty and low protein intake. An estimation of maximum sustainable harvest in NDUFR reveals that CBWM only has limited capacity to reduce these causes of hunting, maintain the communities’ interest and offset the opportunity costs of conservation. Results of this study suggest that conservation efforts in NDUFR should focus on protecting wildlife against exploitation instead of encouraging use and dependence through CBWM. Supporting efforts should attempt to facilitate a complete shift to domestic sources of meat, by increasing the number of domestic animals in the poorest part of the population.

Opportunity costs of conservation in a biodiversity hotspot: the case of southern Bahia

Biodiversity 'hotspot' areas, which are characterized by concentrations of endemic species and severe anthropogenic loss of natural habitat, might be thought ∗ Corresponding author. The property survey was carried out by IESB under a grant from PROBlO, which supported also the interpretation of the land cover data by E.C. Landau and colleagues. The World Bank's Research Support Board supported the data analysis reported here, compilation of the vegetation maps by W. Wayt Thomas and AndrM.de Carvalho, and (with supplementary funding from the Rain Forest Trust) supported digitization of the land capabilities data. We are grateful to IBGE for making those data available and to David Stoms at the Institute for Computational Earth Sciences, University of California, Santa Barbara, for undertaking digitization. Conservation International digitized the vegetation maps and contributed to data integration and analysis. Preparation of the paper was supported by the Norwegian Trust Fund for the World Development Report 2003, for which an earlier version served as a background paper. The findings and interpretations do not necessarily reflect the views of the World Bank, its Executive Board of Directors, or the countries they represent.

Economic considerations in the optimal size and number of reserve sites

The debate among ecologists on the optimal number of reserve sites under a fixed maximum total reserve area—the single large or several small (SLOSS) problem—has so far neglected the economic aspects of the problem. This paper argues that economic considerations can affect the optimal number and size of reserve sites and should therefore be taken into consideration in the SLOSS discussion. The paper presents a tractable analytical model to determine the socially optimal number of reserve sites to be allocated in a farming area under a fixed total reserve area, taking the opportunity costs of nature conservation (in this case, agricultural profits) into consideration. Furthermore, the effect of land trade and related transaction costs on the socially optimal number of reserve sites is analyzed. The analysis suggests that in the presence of diminishing returns to farming area, the socially optimal number of reserve sites (which maximizes social welfare) is generally larger than the ecologically optimal number (which maximizes an ecological objective such as population viability). When the opportunity costs of conservation can be offset by land transactions, however, the socially optimal number of reserve sites might be closer to the ecological optimum.

Testing alternative indicators for biodiversity conservation in old-growth boreal forests: ecology and economics

In this study, the performance of biodiversity indicators used in the selection of boreal old-growth forest reserves is assessed. The indicators include beetles, birds, vascular plants, wood-inhabiting fungi, and a specified subgroup of assumed indicator species. Our site selection procedure includes information both on ecological variables and on the economic costs incurred from the ecological survey and the opportunity costs of conservation. Complementarity and scoring procedures in site selection are compared. We show that the use of indicators likely results in a loss of species, and therefore, a complete inventory of biodiversity is necessary if the goal is to maintain all species in the landscape. However, the use of indicators seems to be an economically more efficient practice than to execute a large biodiversity survey for habitat protection in our case study. In general, birds and vascular plants seem better indicators than other taxa. A scoring approach performs better than a complementarity approach for indicator taxa containing a small number of species.

Who should pay for tropical conservation, and how could the costs be met?

While conservation activities are underfunded almost everywhere, the gap between current expenditure and what is needed is particularly extreme in the tropics where threatened species and habitats are most concentrated. We examine how to bridge this funding gap. Firstly, we try to identify who in principle should pay, by comparing the spatial distribution of the costs and the benefits of tropical conservation. The immediate opportunity costs of conservation often exceed its more obvious, management-related costs, and are borne largely by local communities. Conversely, we argue that the greatest benefits of conservation derive from ecological services, and from option, existence, and bequest values; these are often widely dispersed and enjoyed in large part by wealthier national and global beneficiaries. We conclude that the gap in funding tropical conservation should be borne largely by national and especially global communities, who receive most benefit but currently pay least cost. In the second part of the paper we review recent developments in order to examine how in practice increased funding may be raised. There are many growing and novel sources of support: private philanthropy, premium pricing for biodiversity-related goods via certification schemes, and the development of entirely new markets for environmental services. Despite their potential, we conclude that the principal route for meeting the unmet costs of tropical conservation will have to be via governments, and will inevitably require the transfer of substantial resources from north to south. This will be enormously difficult, both politically and logistically, but without it we believe that much of what remains of tropical nature will be lost.