The Efficiency of Voluntary Incentive Policies for Preventing Biodiversity Loss

Habitat 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 * Corresponding author. Tel.: +1 253 879 3553. E-mail addresses: [email protected] (D.J. Lewis), [email protected] (A.J. Plantinga), [email protected] (E. Nelson), [email protected] (S. Polasky). 1 Tel.: +1 541 737 1423. 2 Tel.: +1 612 624 6260. 3 Tel.: +1 612 625 9213.