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Biodiversity conservation in a dynamic world may lead to inefficiencies due to lock-in effects and path dependence

Martin Drechsler () and Frank Wätzold

Ecological Economics, 2020, vol. 173, issue C

Abstract: Although biodiversity is generally diminishing, in some areas its conservation is expanding. However; the exact path of this expansion is uncertain. This can lead to problems of path-dependence and lock-in effects. Path dependence describes situations where history strongly influences present decisions and lock-in effects refer to situations where an earlier decision provides strong incentives to follow a particular path, even if more efficient alternatives are available later on. We develop a conceptual ecological-economic model to investigate which ecological and economic parameters favour the appearance of efficiency losses in biodiversity conservation due to path dependence and lock-in effects in a dynamic two-period two-region model. Generally we find that efficiency losses occur if there are signals that guide the first-period budget into a region that later turns out to be suboptimal if both time periods had been considered right from the beginning. To illustrate the conservation relevance of our findings, we present potential efficiency losses through path dependence in the hypothetical case of applying offsets to conserving the endangered Maculinea teleius butterfly near the city of Landau in Germany.

Keywords: Dynamic optimisation; Ecological-economic model; Ecological benefit; Economic cost; Efficiency; Resource allocation (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:173:y:2020:i:c:s0921800919316696

DOI: 10.1016/j.ecolecon.2020.106652

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