Biodiversity Conservation: Outline

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1 Biodiversity Conservation: Outline Introduction: Biodiversity values and conservation strategies Resource Allocation Principle for Protecting Biodiversity: Noah s Ark Pharmaceutical Values for Biodiversity Conservation Setting Aside Land to Protect Biodiversity Restricting Land Uses to Protect Biodiversity, ESA. Debt-for-Nature Swaps 6/5/2012 Biodiversity Slides 1

2 Biodiversity Conservation: Outline Introduction: Biodiversity values and conservation strategies Resource Allocation Principle for Protecting Biodiversity: Noah s Ark Pharmaceutical Values for Biodiversity Conservation Setting Aside Land to Protect Biodiversity Restricting Land Uses to Protect Biodiversity, ESA. Debt-for-Nature Swaps 6/5/2012 Biodiversity Slides 2

3 Model 1: Resource allocation problem (Noah s Ark) Several projects are proposed to conserve biodiversity. We can estimate all relevant parameters for each project. We have a limited budget. Which projects should be chosen? 6/5/2012 Biodiversity Slides 3

4 Notation: i = a specific project designed to protect a target species. B i = Biodiversity value of species protected by project i. U i = Use value of species protected by project i, if preserved. C i = Cost of project i. P i (0) and P i (1) indicate the probability that the species will survive without (0) and with (1) project i. P i = P i (1) - P i (0): Change in probability of survival caused by project i. 6/5/2012 Biodiversity Slides 4

5 Project i s payoff = (B i + U i ) P i. Allocation rule (Noah s Ark Principle): Rank projects in decreasing order of R i = {(B i + U i ) P i }/C i. Undertake projects for which R i >1, in this order, until funds are exhausted. 6/5/2012 Biodiversity Slides 5

6 Model 2: How to value the pharmaceuticals that biodiversity may yield? Large fraction of existing pharmaceuticals were derived from natural substances. Quinine from chinchona tree (malaria) Taxol from Pacific yew tree (cancer) Vincristine from rosy periwinkle (lukemia) Total gain from protecting all of this genetic information? Potentially huge. More relevant question for policy: What is the gain from protecting a marginal species, or a marginal acre of habitat? 6/5/2012 Biodiversity Slides 6

7 Estimating the value of biodiversity for pharmaceutical uses: Sample problem: Researchers are looking for a cure to a specific form of cancer. P = probability that a test of a random species is a success. R = value of a success, if discovered. C = cost of a test. 6/5/2012 Biodiversity Slides 7

8 Expected payoff from testing a single species for this cure: V(1) = (PR - C) Expected payoff from testing two species for this cure: V(2) = (PR - C) +(PR C)(1 P). 6/5/2012 Biodiversity Slides 8

9 Expected payoff from testing N species for this cure: V(N) = (PR - C) + (PR C)(1 P) + (PR - C)(1 - P) 2 + (PR - C)(1 - P) (PR - C) (1 - P) N-1. Marginal payoff from having the N th species available to test: MV(N) = (PR - C) (1 - P) N-1. Note: (PR - C) depends positively on P, (1-P) N-1 depends negatively on P. 6/5/2012 Biodiversity Slides 9

10 MV(N) C/R P* 1.0 P Determining most advantageous P, P*. 6/5/2012 Biodiversity Slides 10

11 Estimating MV(N) (from SSR, 1996): R = $450 million for a successful drug. C = $3,600 per test. N = 250,000 flowering plants. P* = Bottom line: Maximum pharmaceutical value for preserving a hectare of western Ecuador: $ /5/2012 Biodiversity Slides 11

12 Policy for protecting biodiversity: Creating protected areas Protected Area Area of land and/or sea especially dedicated to the protection and maintenance of biological diversity, and of natural and associated cultural resources, and managed through legal or other effective means. Source: UNEP and World Commission on Protected Areas (IUCN), World Database of Protected Areas. 6/5/2012 Biodiversity Slides 12

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18 Protected Area dedicated to the protection and maintenance of biological diversity, and of natural and associated cultural resources and managed through legal or other effective means. Source: UNEP and World Commission on Protected Areas (IUCN), World Database of Protected Areas. 6/5/2012 Biodiversity Slides 18

19 Social Determinants of PA Performance Competing Uses for Land and Resources (determinants) Resource extraction (density and value of timber, game, minerals, forage for animals; proximity to roads, rivers) Subsistence agriculture (poverty, income levels, population density; soil quality, rainfall, slope; proximity to roads, rivers) Permanent agriculture (soil quality, rainfall, slope; access to markets, e.g., proximity to roads, rivers, population centers) 6/5/2012 Biodiversity Slides 19

20 Social Determinants of PA Performance (cont.) Cost of Protection Cost of protection inputs (labor, capital) Remoteness PA Performance and Host Country Governance Presence or absence of corruption among managers/enforcers Adequacy of host government enabling policy Ability and incentive to commit to long-term conservation goals. 6/5/2012 Biodiversity Slides 20

21 Corruption and Illegal Logging Illegal logging Harvesting in protected areas Harvesting protected species Harvesting in excess of concessions False reporting of harvests 6/5/2012 Biodiversity Slides 21

22 Source: Tropical Forest Update, Vol. 12 (1) 2002, p. 4. 6/5/2012 Biodiversity Slides 22

23 6/5/2012 Biodiversity Slides 23

24 Restricting Land Uses to Protect Biodiversity, ESA. (Discussion in Field, pp ) Adopted without controversy in ESA Process FWS and NMFS rank species by endangerment risk Threatened/endangered. If listed, develop a recovery plan. Complaints about ESA approach Habitat plan approach land use options. Shoot, shovel and shut up response possible. 6/5/2012 Biodiversity Slides 24

25 Complaints, cont. Effectiveness: Of 1,664 plants and animals listed, < 700 have recovery plans. Only 11 have been removed from list. Few have showed improved population status. Selection of Species: Charismatic megafauna : bald eagles, wolves, whooping cranes,. Selection not related to scientific biodiversity values. More like zoo popularity. Should policy protect ecosystems, rather than individual species? 6/5/2012 Biodiversity Slides 25

26 Debt-for-Nature Swaps, an emerging form of environmental transaction Product transacted: protection of biodiversity, natural habitat. Buyers: Conservation NGOs. CI, TNC, WWF; Developed country agencies, US, Sweden, Netherlands. Sellers: Host country government agencies and NGOs: Costa Rican National Parks Foundation; Bolivian FONAMA (NGO); Ecuadoran Fundacion Natura. 6/5/2012 Biodiversity Slides 26

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