Andrew J. Plantinga Bren School of Environmental Science and Management University of California, Santa Barbara

Transcription

1 Andrew J. Plantinga Bren School of Environmental Science and Management University of California, Santa Barbara Research Question How can incentives be designed for the provision of public goods from the landscape? Motivation Landscapes provide a variety of public goods (climate, water quality, aesthetics, biodiversity, etc.) Land-use change is the leading driver of biodiversity loss in terrestrial ecosystems Public lands can play a larger role Only about 6% of land globally is designated as wilderness area, national park, national monument, or wildlife refuge Much of the important for biodiversity conservation occurs on privately-owned land 7% of species listed under the Endangered Species Act depend on private land for the majority of their (Natural Heritage Data Center Network, 1993)

2 Framing the Problem How can incentives be designed for the provision of public goods from the landscape? Four important factors to consider Ownership: public or private? Information: conservation costs known by government agency, uncertainty over future costs, asymmetric information? Policy: regulation, market-based incentives, voluntary or mandatory? Benefits: spatially-dependent or spatially-independent? The Focus of this Address Ownership: Landscape is managed by a large and diverse group of profit-maximizing private landowners Information: Private landowners know the cost of conserving their land parcel. The government agency at most knows the distribution over landowner costs. Policy: voluntary, market-based incentives Benefits: spatially-dependent or spatially-independent Prominent U.S. examples: Conservation Reserve Program, Wildlife Habitat Incentives Program, conservation easements

3 Outline for this Address My goal is to provide an overview of my past research (with collaborators) on land use and public goods provision, emphasizing the important ideas and findings Costs and benefits of conservation Empirical approach Analysis of incentives for spatially-independent benefits Analysis of incentives for spatially-dependent benefits Uniform vs. targeted payments How good are voluntary incentive payments? The Whole Enchilada Incentive design Directions for future work What has been learned Costs of Conservation Measured by foregone profits when conservation is undertaken Planting trees on crop land: loss of crop profits, possibly offset by value of future timber harvests Asymmetric information: landowners know the cost of undertaking a conservation activity on their land. Government agency at most knows the distribution over conservation costs. Landowners are likely to have private knowledge about characteristics of their land, how they manage their land, and the particular skills they possess If the conservation payment depends on costs, landowners have an incentive not to disclose their costs to the government agency Conservation cost distribution for crop land ($/acre/year)

4 Benefits of Conservation Benefits may depend on the spatial configuration of conserved lands Spatially-independent benefits 1 1 Parcel A Parcel B Parcel A Parcel B Spatially-dependent benefits 1 1 Parcel A Parcel B Parcel A Parcel B Benefits of Conservation Spatially-independent benefits Carbon sequestration in forests Spatially-dependent benefits Open space is often more valuable if large blocks of land are conserved Quality of wildlife often increases if conserved lands are contiguous

5 Habitat Fragmentation Empirical approach Estimate an econometric land-use model that explains private land-use decisions in terms of profits earned by landowners Key advantage of the econometric approach is that it measures how landowners have actually responded to the economic incentives they face Simulate market-based incentives for conservation by modifying profits Example: raise the relative return to forest to encourage afforestation or avoid deforestation Measure benefits and costs of the policy Benefits: convert changes in land use into changes in wildlife species, carbon storage, etc. Costs: opportunity cost of policy are the foregone profits from conserved lands

6 Carbon Sequestration Lubowski, Plantinga, and Stavins (26) Six major land uses: forest, crop, pasture, range, urban, and Conservation Reserve Program Detailed micro-data is used in a comprehensive analysis of the United States The National Resources Inventory (NRI) provides 844, plot-level observations at four points in time between 1982 and 1997 Land-use transitions explained in terms of average profits from each use and plot-level measures of land quality Policy Simulations A subsidy for Area of land by use after 2 years afforestation and tax on deforestation is introduced which raises the relative return to forestry Leakage effects: the policy affects the supply of commodities, commodity prices, and therefore profits from each use. Lubowski et al. 26

7 Measure Benefits and Costs of the Policy Lubowski et al. 26 Marginal Costs of Carbon Sequestration 3 3 This study 2 2 M anne and Richels / Glo bal Go ulder $/ton 1 Harvesting No Harvesting $/ton 1 Jo rgenson and Wilcoxen / DGEM OECD / GREEN 1 1 Fitted abatement co st curve This study (partially linear) Carbon (million tons per year) Carbon (million tons per year) Lubowski et al. 26

8 Spatially-Dependent Benefits Now benefits of the policy depend on where land-use changes occur in relation to each other Landscape simulations using econometric land-use models Start with an initial land cover or land use map Use the econometric results to define rules governing land-use changes at the scale of land parcels U.S. Land Cover Map 26 Simulating Conservation Incentives Use GIS layers to identify spatially distinct parcels according to land attributes. Use the econometric results to define land-use transition probabilities for each parcel. agriculture forest urban agriculture forest..8.1 urban.. 1.

9 Two Simulated Landscapes Effects of a forest subsidy on interior forest 2 m Frequency distribution for percent interior forest.18 Interior forest Baseline Uniform subsidy % Landscape Lewis and Plantinga (27)

10 Targeted Policies With a uniform incentive, all landowners are offered the same payment per acre A more effective strategy may be to restrict the payments to subsets of landowners (i.e., target the payments) Agglomeration bonus payment is available only if the neighboring parcel also conserves Only parcels with certain characteristics (e.g., minimum size) are eligible for payments Parcels can ranked according to a benefit to expected cost ratio and targeted accordingly Targeting can involve a tradeoff between benefits and costs Uniform vs. Targeted Payments Marginal Costs of Increasing Interior Forest $ Acres Lewis and Plantinga (27) Uniform Policy ST 1 Policy ST 3 Policy Uniform payment: all landowners offered the same per-acre subsidy for afforestation ST1: a landowner is eligible for the payment only if his parcel is adjacent to one existing forest parcel ST3: a landowner is eligible for the payment only if his parcel is adjacent to three existing forest parcels

11 Scoring Landscapes for Biodiversity Following Polasky et al. (2, 28), we derive a biodiversity score for each simulated landscape. The score measures the likelihood of survival for a group of species and accounts for: Habitat requirements for particular species Size of patches Connectivity of patches The expected number of breeding pairs How Good are Voluntary Incentive Policies? Lewis et al. (211)

12 The Whole Enchilada Lawler et al. (213) Effects on Ecosystem Services Examine changes in food and timber production, carbon storage, and for four types of wildlife species Main findings: Ecosystem services greatly affected by projected landuse trends. Tradeoffs between different types of ecosystem services Even aggressive policies can have relatively small effects Kilocalories x1 13 Number of species b) food production Difference between conservation policy scenarios and 199s Trends as of 21-1% 4% -4% Kcals f) strong interactors (N=81) g) game species (N=34) h) declining birds (N=47) 1 2 lose >1% of Forest Incentives Natural Habitat Urban Containment Megagrams x1 8 little/no change in c) carbon storage 8% gain > 1% of 2% biomass soil lose >1% of Cubic feet x1 7 Hectares x1 6 d) timber production little/no change in 18% % timber -% -11% -24% -6% crop pasture forest urban range gain > 1% of 4% -4% a) land cover -14% Number of species 3% % 3% e) amphibians (N=6) lose >1% of lose >1% of % little/no change in little/no change in 1% gain > 1% of gain > 1% of Lawler et al. (213)

13 Incentive Design Voluntary incentives may be extremely costly for the government if many landowners would have conserved their land in the absence of a payment Due to asymmetric information, the government cannot determine which landowners provide additional conservation. In Mason and Plantinga (213), we analyze contracts that minimize government expenditures and identify which landowners provide additional carbon sequestration. We conduct a national scale simulation of these contracts. Mason and Plantinga (213) Incentive Design Is there a way to overcome the asymmetric information problem and get to the frontier? This is a hard problem when benefits are spatially dependent. We show in new paper (Polasky et al. 213) that we can implement the optimal landscape with a two-stage Vickrey auction and Pigouvian subsidy.

14 Directions for Future Research Identify and analyze policies that overcome practical challenges for conservation agencies Additionality Allocation of conservation funds with a budget constraint Conservation incentives over time Conservation under climate change Developing econometric land-use models with spatially-explicit data Better predictions of where conservation activities are likely to occur on the landscape What Has Been Learned As more of a landscape is conserved, the costs of additional conservation benefits may decline. Asymmetric information is a significant challenge for voluntary incentive policies Even when key groups of landowners are targeted, these policies may achieve a small percentage of the potential benefits Landowners have an incentive not to disclose cost information, especially if payments depend on it. With spatially-dependent benefits, the government agency needs cost information to identify and implement the optimal solution. Innovative incentive design is needed to mitigate information problems Underlying forces in the land market are difficult to overcome, even with aggressive policies. Regulation may be the only effective way to curb urbanization.

15 References Lawler, J., Lewis, D., Nelson, E., Plantinga, A.J., Polasky, S., Withey, J., Helmers, D., Martinuzzi, S., and V. Radeloff Projected land-use change impacts on US ecosystem services and biodiversity. Mason, C.F., and A.J. Plantinga The Additionality Problem with Offsets: Optimal Contracts for Carbon Sequestration in Forests. Journal of Environmental Economics and Management 66:1-14. Polasky, S., Lewis, D.J., Plantinga, A.J., and E. Nelson Optimal Conservation with Spatially- Dependent Benefits and Asymmetric Information. Lewis, D.J., Plantinga, A.J., Nelson, E., and S. Polasky The Efficiency of Voluntary Incentive Policies for Preventing Biodiversity Loss. Resource and Energy Economics 33(1): Polasky, S., Nelson, E., Camm, J., Csuti, B., Fackler, P., Lonsdorf, E., White, D., Arthur, J., Garber- Yonts, B., Haight, R., Kagan, J., Montgomery, C., Starfield, A., Tobalske, C., 28. Where to put things? Spatial land management to sustain biodiversity and economic production. Biological Conservation 141 (6), Lewis, D.J., and A.J. Plantinga. 27. Policies for Habitat Fragmentation: Combining Econometrics with GIS-Based Landscape Simulations. Land Economics 83(2): Lubowski, R.N., Plantinga, A.J., and R.N. Stavins. 26. Land-Use Change and Carbon Sinks: Econometric Estimation of the Carbon Sequestration Supply Function. Journal of Environmental Economics and Management 1(2):13-2. Polasky, S., Nelson, E., Lonsdorf, E., Fackler, P., Starfield, A., 2. Conserving species in a working landscape: land use with biological and economic objectives. Ecological Applications 1, More information at: