Creating markets for habitat conservation when habitats are heterogeneous

Kenneth M. Chomitz, Timothy Thomas and Antonio Salazar Brandao

No 3429, Policy Research Working Paper Series from The World Bank

Abstract: A tradable development rights (TDR) program focusing on biodiversity conservation faces a crucial problem defining which areas of habitat should be considered equivalent. Restricting the trading domain to a narrow area could boost the range of biodiversity conserved but could increase the opportunity cost of conservation. The issue is relevant to Brazil, where TDR-like programs are emerging. Current regulations require each rural property to maintain a forest reserve of at least 20 percent, but nascent policies allow some tradability of this obligation. The authors use a simple, spatially explicit model to simulate a hypothetical state-level program. They find that wider trading domains drastically reduce landholder costs of complying with this regulation and result in environmentally preferable landscapes.

Keywords: Wetlands; Environmental Economics&Policies; Banks&Banking Reform; Water Conservation; Climate Change; Forestry; Environmental Economics&Policies; Wetlands; Climate Change; Banks&Banking Reform (search for similar items in EconPapers)
Date: 2004-10-01
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Citations: View citations in EconPapers (3)

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