Applying tradable permits to biodiversity conservation: effects of space-dependent ecological benefits and cost heterogeneity on habitat allocation

Martin Drechsler () and Frank Wätzold

No 1/2007, UFZ Discussion Papers from Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS)

Abstract: This paper is concerned with the cost-effective allocation of habitat for endangered species under spatio-temporally heterogeneous economic development. To address the dynamic dimension of the problem we consider tradable development rights (TDR) as the instrument of choice. A particular challenge in applying TDR is that the ecological benefit of an individual habitat patch depends on its spatial relationship with other habitats and thus is an emergent rather than a fixed property. We analyse the spatial and temporal dynamics of habitats in a region under a TDR market that takes spatial interaction of habitats explicitly into account. We show that depending on the levels of spatial interaction and cost heterogeneity, two different outcomes may emerge: an "ordered" structure where habitats are clustered in space and stable over time, and a "disordered" structure where habitats are scattered in space and subject to high turnover of destruction and recreation.

Keywords: ecological-economic model; cost heterogeneity; phase transition; spatial interaction; tradable development rights (search for similar items in EconPapers)
JEL-codes: Q24 Q28 Q57 (search for similar items in EconPapers)
Date: 2007
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ufzdps:12007

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