FYI. wil Dr. Wil Burns, Associate Director Master of Science - Energy Policy & Climate Program Johns Hopkins University 1717 Massachusetts Avenue, NW Room 104J Washington, DC 20036 650.281.9126 (Mobile) 202.452.8713 (Fax) [email protected] http://energy.jhu.edu SSRN site (selected publications): http://ssrn.com/author=240348
Skype ID: Wil.Burns Teaching Climate/Energy Law & Policy Blog: http://www.teachingclimatelaw.org EPC Facebook page: facebook.com/JHUEPC -----Original Message----- From: David Duthie [mailto:[email protected]] Sent: Tuesday, November 06, 2012 6:56 AM To: [email protected] Subject: Oxford Review of Economic Policy, Issue 28:1: Economics and Biodiversity Dear BIOPLANNERS, When I was last resident in Oxford (UK) - in 2000 - the prestigious Oxford Review of Economic Policy released thematic issues covering "labour markets"; "Japan's stagnant economy", "globalisation" and "macroeconomic modelling". So I was surprised to read - via IISD's BIODIVERSITY-L, so apologies for cross-posting - that the current issue of Oxford Review of Economic Policy, Issue 28:1: is on "Economics and Biodiversity" AND is open access for a limited period of time. The special issue can be accessed at http://www.oxfordjournals.org/page/4883/1 and I have pasted the abstracts of the nine article and their individual URL links below. I guess that this special issue could be considered a kind of mainstreaming of biodiversity into economics, and thus represent progress of one sort, but be warned, you will not find much "real" (specific) biodiversity on display in these articles, with the exception of the last article, where options for Homo economicus with respect to "tiger bones, bear bladders, ivory, and rhino horn" conclude that "banking on extinction" would be a rational policy option! Overall, these articles serve as a useful reminder of the continuing challenges to finding practical ways to utilise theoretically attractive (market) solutions to reverse global biodiversity loss. Best wishes David Duthie ********************************** 1. The economic analysis of biodiversity: an assessment. Dieter Helm and Cameron Hepburn Biodiversity is complex, difficult to define, difficult to measure, and often involves international and intergenerational considerations. Biodiversity loss presents significant economic challenges. A great deal of economics is required to understand the issues, but a simple and important observation is that most species and ecosystems are not traded in markets, so prices are often absent and biodiversity is under-provided. Despite the formidable obstacles to high-quality economic analysis, economics has plenty to offer to biodiversity policy. First, economic valuation techniques can be employed to roughly estimate the value of the benefits provided by biodiversity and ecosystems. Second, assessing the 'optimum' amount of biodiversity involves recognizing that the conversion of natural capital into manufactured and human capital has so far generated vast amounts of wealth. While there may have been 'too much biodiversity' in the past, economic analysis suggests that this is a difficult position to hold now. Third, econometric techniques and carefully designed policy studies can assist in determining what policies are most suited to different contexts to cost-effectively reduce biodiversity loss. Fourth, political economy is helpful because international coordination is often required-ecosystems do not respect national borders and many biodiverse ecosystems are in poorer countries. This paper synthesizes the issues and proposes a research agenda, which includes improving the measurement and accounting of natural capital, improving valuation techniques and theory to provide greater guidance as to the 'optimum' biodiversity, and developing our understanding of the merits of different alternatives for government intervention to reduce biodiversity loss. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 1-21 http://oxrep.oxfordjournals.org/content/28/1/1.abstract *********************************** 2. Recent advances in the valuation of ecosystem services and biodiversity. Giles Atkinson, Ian Bateman, and Susana Mourato Recent interest in the economics of biodiversity and wider ecosystem services has been given empirical expression through a focus upon economic valuation. This emphasis has been prompted by a growing recognition that the benefits and opportunity costs associated with such services are frequently given cursory consideration in policy analyses or even completely ignored. The valuation of biodiversity and ecosystem services is therefore increasingly seen as a crucial element of robust decision making and this has been reflected in a growing body of related research. We provide a critical review of some of this research, considering the valuation methods applied to date and focussing upon their limitations in respect to certain categories of ecosystem services (particularly cultural services) and the applicability of the extant literature to new settings. Substantial questions also remain at the interface of natural science and economics and we consider the potential contribution of the conceptualization of ecosystems as assets as a response to this challenge. As part of this review we also highlight the role which large scale 'ecosystem assessments' have played as an impetus to extending the valuation evidence base and the way in which frameworks and assessments of how ecosystems contribute to human wellbeing might be translated into policy thinking and decision analyses. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 22-47 http://oxrep.oxfordjournals.org/content/28/1/22.abstract ********************************* 3. Biodiversity, poverty, and development. Charles Palmer and Salvatore Di Falco Biodiversity is crucial for the production of a range of marketed and non-marketed ecosystem goods and services. This paper reviews the empirical evidence for the role of terrestrial biodiversity and biodiversity conservation in economic development and poverty, at both the macro (e.g. country) and micro (e.g. farm) scales. It first examines general relationships between biodiversity and economic development before showing how biodiversity influences ecosystem services. Second, future scenarios and challenges for biodiversity and development are examined, given projections for further changes in global population, economic growth, and consumption. Third, the relationship between biodiversity protection and incomes is investigated. Two specific policies, protected areas and bioprospecting, are reviewed with respect to their impacts on the welfare of the resource-dependent poor. In conclusion, improvements in policy design and implementation could help minimize the possibility of earth's sixth mass extinction event, at least within a few generations, while ensuring that the poor are not made worse off as a result of policy implementation. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 48-68 http://oxrep.oxfordjournals.org/content/28/1/48.abstract ********************************* 4. Evaluation of biodiversity policy instruments: what works and what doesn't? Daniela A Miteva, Subhrendu K Pattanayak, and Paul J. Ferraro We review and confirm the claim that credible evaluations of common conservation instruments continue to be rare. The limited set of rigorous studies suggests that protected areas cause modest reductions in deforestation; however, the evidence base for payments for ecosystem services, decentralization policies and other interventions is much weaker. Thus, we renew our urgent call for more evaluations from many more biodiversity-relevant locations. Specifically, we call for a programme of research-Conservation Evaluation 2.0-that seeks to measure how programme impacts vary by socio-political and bio-physical context, to track economic and environmental impacts jointly, to identify spatial spillover effects to untargeted areas, and to use theories of change to characterize causal mechanisms that can guide the collection of data and the interpretation of results. Only then can we usefully contribute to the debate over how to protect biodiversity in developing countries. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 69-92 http://oxrep.oxfordjournals.org/content/28/1/69.abstract ********************************* 5. How should we incentivize private landowners to 'produce' more biodiversity? Nick Hanley, Simanti Banerjee, Gareth D Lennox, and Paul R Armsworth Globally, much biodiversity is found on private land. Acting to conserve such biodiversity thus requires the design of policies which influence the decision-making of farmers and foresters. In this paper, we outline the economic characteristics of this problem, before reviewing a number of policy options, such as conservation auctions and conservation easements. We then discuss a number of policy design problems, such as the need for spatial coordination and the choice between paying for outcomes rather than actions, before summarizing what the evidence and theory developed to date tell us about those aspects of biodiversity policy design which need careful attention from policy-makers and environmental regulators. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 93-113 http://oxrep.oxfordjournals.org/content/28/1/93.abstract ********************************* 6. Regulating global biodiversity: what is the problem? Tim Swanson and Ben Groom We distinguish between local problems of biodiversity loss and global ones, where international cooperation is required. Global biodiversity regulation involves choosing the optimal stopping rule regarding global land conversions, in order to ensure that some areas of unconverted natural reserves remain to support the production sector that exists on converted lands. The basic difficulty with implementing a solution to this global problem lies in the asymmetry in endowments between those states that have previously converted, and those that have not. We demonstrate that the fundamental problem of global biodiversity regulation is similar to the bargaining problem analysed by Nash, Rubinstein, and others. There are benefits from global land conversion, and there must be agreement on their distribution before the conversion process can be halted. Since the institutions addressing global biodiversity problems are either highly ineffectual (benefit-sharing agreements, prior informed-consent clauses) or very extreme (incremental cost contracts), the biodiversity bargaining problem remains unresolved. For this reason we anticipate that suboptimal conversions will continue to occur, as a way of protesting the ineffective and unfair approaches employed in addressing this problem to date. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 114-138 http://oxrep.oxfordjournals.org/content/28/1/114.abstract ****************************************************************** 7. Are investments to promote biodiversity conservation and ecosystem services aligned? Stephen Polasky, Kris Johnson, Bonnie Keeler, Kent Kovacs, Erik Nelson, Derric Pennington, Andrew J Plantinga, and John Withey The conservation community is divided over the proper objective for conservation, with one faction focused on ecosystem services that contribute to human well-being and another faction focused on the intrinsic value of biodiversity. Despite the underlying difference in philosophy, it is not clear that this divide matters in a practical sense of guiding what a conservation organization should do in terms of investing in conservation. In this paper we address the degree of alignment between ecosystem services and biodiversity conservation strategies, using data from the state of Minnesota, USA. Minnesota voters recently passed an initiative that provides approximately $171m annually in dedicated funding for conservation. We find a high degree of alignment between investing conservation funds to target the value of ecosystem services and investing them to target biodiversity conservation. Targeting one of these two objectives generates 47-70 per cent of the maximum score of the other objective. We also find that benefits of conservation far exceed the costs, with a return on investment of between 2 to 1 and 3 to 1 in our base-case analysis. In general, investing in conservation to increase the value of ecosystem services is also beneficial for biodiversity conservation, and vice-versa. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 139-163 http://oxrep.oxfordjournals.org/content/28/1/139.abstract ********************************* 8. Protecting forests, biodiversity, and the climate: predicting policy impact to improve policy choice. Alexander Pfaff and Juan Robalino Policies must balance forest conservation's local costs with its benefits-local to global-in terms of biodiversity, the mitigation of climate change, and other eco-services such as water quality. The trade-offs with development vary across forest locations. We argue that considering location in three ways helps to predict policy impact and improve policy choice: (i) policy impacts vary by location because baseline deforestation varies with characteristics (market distances, slopes, soils, etc.) of locations in a landscape; (ii) different mixes of political-economic pressures drive the location of different policies; and (iii) policies can trigger 'second-order' or 'spillover' effects likely to differ by location. We provide empirical evidence that suggests the importance of all three considerations, by reviewing high-quality evaluations of the impact of conservation and development on forest. Impacts of well-enforced conservation rise with private clearing pressure, supporting (i). Protection types (e.g. federal/state) differ in locations and thus in impacts, supporting (ii). Differences in development process explain different signs for spillovers, supporting (iii). Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 164-179 http://oxrep.oxfordjournals.org/content/28/1/164.abstract ********************************* 9. Banking on extinction: endangered species and speculation. Charles F Mason, Erwin H Bulte, and Richard D. Horan Many wildlife commodities, such as tiger bones, bear bladders, ivory, and rhino horn, have been stockpiled in large quantities by speculators who expect that future price increases justify forgoing the interest income associated with current sales. When supply from private stores competes with supply from 'wild populations' (in nature) and when speculators are able to collude, it may be optimal to coordinate on an extinction strategy. We analyse the behaviour of a speculator who has access to a large initial store, and finds that it is optimal to deter poachers' entry either by depressing prices (carefully timing own supply) or by depressing wild stocks. Which strategy maximizes profits critically depends on the initial wildlife stock and initial speculative stores. We apply the model to the case of black rhino conservation, and conclude it is likely that 'banking on extinction' is profitable if current speculators are able to collude. Contrary to conventional wisdom, we also find that extinction is favoured by such factors as low discount rates or high growth rates. Oxford Review of Economic Policy, 2012 vol. 28 (1) pp. 180-192 http://oxrep.oxfordjournals.org/content/28/1/180.abstract ================= Bioplan is a list server run jointly by UNDP and UNEP. To join / leave bioplan, email: [email protected] with "subscribe" or "unsubscribe" in the subject line. 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