Market-Based Policies to Reduce Forest Fragmentation and Risks to Interior-Forest Birds

Forest fragmentation occurs when a contiguous patch of forest is transformed into disjunct patches. This reduces the quality of habitat for bird species of ecological and recreational importance, and is considered to be a primary cause of declines in the populations of many migratory songbirds. In this paper, we analyze the effects of market-based policies on forest fragmentation in the coastal plain region of South Carolina. Our approach integrates an econometric model of land use with simulations that predict the spatial pattern of land-use change. The spatial configuration of each simulated landscapes is summarized with fragmentation indices (average forest patch size, area of core forest, etc.) shown in the ecology literature to be indicators of habitat quality. We analyze how subsidies for afforestation affect distributions defined over the fragmentation metrics and derive the marginal costs of increasing the indices. We examine spatially uniform and spatially-targeted policies. We find that the costs of reducing forest fragmentation vary greatly with initial landscape conditions and that a simple uniform subsidy appears to perform well relative to more complicated spatially-targeted policies.