Paying for the conservation of endangered ecosystems: a comparison of direct and indirect approaches*

R. David Simpson and Roger A. Sedjo

Environment and Development Economics, 1996, vol. 1, issue 2, 241-257

Abstract: A number of international conservation donors support efforts to encourage conservation indirectly by subsidizing commercial activities. Such plans beg two questions. First, if commercial ventures are expected to be profitable, why is external financing necessary for their initiation? Second, if commercial ventures are not expected to be profitable, could not greater incentives for conservation be generated by making direct payments? We examine these questions in detail. While we find that the practical impediments to instituting a direct payment programme may be substantial, the practical impediments to instituting any effective conservation programme may be substantial. On balance, there is a strong case to be made for greater experimentation with direct payment schemes than heretofore.

Date: 1996
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