Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308586 
Year of Publication: 
2022
Citation: 
[Journal:] Environmental and Resource Economics [ISSN:] 1573-1502 [Volume:] 82 [Issue:] 2 [Publisher:] Springer Netherlands [Place:] Dordrecht [Year:] 2022 [Pages:] 437-459
Publisher: 
Springer Netherlands, Dordrecht
Abstract: 
Tradable permits, or offsetting schemes, are increasingly used as an instrument for the conservation of biodiversity on private lands. Since the restoration of degraded land often involves uncertainties and time lags, conservation biologists have strongly recommended that credits in conservation offset schemes should be awarded only with the completion of the restoration process. Otherwise, the instrument is claimed to fail on the objective of no net loss in species habitat and biodiversity. What is ignored in these arguments, however, is that such a scheme design may incur higher economic costs than a design in which credits are already awarded at the initiation of the restoration process. In the present paper a generic agent-based ecological-economic simulation model is developed to explore different pros and cons of the two scheme designs, in particular their cost-effectiveness. The model considers spatially heterogeneous and dynamic conservation costs, risk aversion and time preferences in the landowners, as well as uncertainty in the duration and the success of the restoration process. It turns out that, especially under fast change of the conservation costs, awarding credits at the initiation of restoration can be more cost-effective than awarding them with completion of restoration.
Subjects: 
Agent-based model
Conservation offsets
Ecological-economic model
Habitat restoration
Uncertainty
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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