The Value of Learning about Natural History in Biodiversity Markets

Douglas J Bruggeman

PLOS ONE, 2015, vol. 10, issue 12, 1-21

Abstract: Markets for biodiversity have generated much controversy because of the often unstated and untested assumptions included in transactions rules. Simple trading rules are favored to reduce transaction costs, but others have argued that this leads to markets that favor development and erode biodiversity. Here, I describe how embracing complexity and uncertainty within a tradable credit system for the Red-cockaded Woodpecker (Picoides borealis) creates opportunities to achieve financial and conservation goals simultaneously. Reversing the effects of habitat fragmentation is one of the main reasons for developing markets. I include uncertainty in habitat fragmentation effects by evaluating market transactions using five alternative dispersal models that were able to approximate observed patterns of occupancy and movement. Further, because dispersal habitat is often not included in market transactions, I contrast how changes in breeding versus dispersal habitat affect credit values. I use an individually-based, spatially-explicit population model for the Red-cockaded Woodpecker (Picoides borealis) to predict spatial- and temporal- influences of landscape change on species occurrence and genetic diversity. Results indicated that the probability of no net loss of abundance and genetic diversity responded differently to the transient dynamics in breeding and dispersal habitat. Trades that do not violate the abundance cap may simultaneously violate the cap for the erosion of genetic diversity. To highlight how economic incentives may help reduce uncertainty, I demonstrate tradeoffs between the value of tradable credits and the value of information needed to predict the influence of habitat trades on population viability. For the trade with the greatest uncertainty regarding the change in habitat fragmentation, I estimate that the value of using 13-years of data to reduce uncertainty in dispersal behaviors is $6.2 million. Future guidance for biodiversity markets should at least encourage the use of spatially- and temporally-explicit techniques that include population genetic estimates and the influence of uncertainty.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0144047

DOI: 10.1371/journal.pone.0144047

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