Policies should offer the highest incentives for conserving and enhancing the most ecologically beneficial sites in a landscape.

No abstract

Most programmes which incentivise the supply of public goods such as biodiversity conservation on private land in Europe are financed through the public purse. However, new ideas for how to fund biodiversity conservation are urgently needed, given recent reviews of the poor state of global biodiversity. In this paper, we investigate the use of private funding for biodiversity conservation through an offset market. The environmental objective is to increase some measure of biodiversity in a region (‘net gain’) despite the loss of land for new housing. Farmers create biodiversity credits by changing their land management, then sell these credits to housing developers who are required to more-than offset the impacts of new housing development on a specific indicator of biodiversity. Combining an economic model of market operation with an ecological model linking land management to bird populations, we examine the operation, costs and biodiversity impacts of such a (hypothetical) market as the target level of net gain is increased. A general result is established for the impacts on price and quantity in the offset market as the net gain target is made more ambitious. For a case study site in Scotland, we find that as the net gain target is increased, the number of offsets traded in equilibrium falls, as does the market clearing offset price. Changes in the spatial pattern of gains and losses in our biodiversity index also occur as the net gain target is raised.

Biodiversity offset markets can incentivize private landowners to take actions that benefit biodiversity. A spatially explicit integrated ecological-economic model is developed and employed for a UK region where offset buyers (house developers) and sellers (farmers) interact through trading offset credits. We simulate how changes in the ecological metric and geographic scale affects the performance of the offset market. Results show that the choice of the metric has a significant effect on market liquidity and the spatial distribution of gains and losses in the target species. The results also consistentl reveal relativel higher potential welfare gains for developers than for farmers.

Recent events around the world have revealed varying degrees of public support for climate change and environmental regulation. Applying a latent class logit model, this study investigates Norwegian and Scottish publics economic support for proposed deep sea management policies for novel attributes and identifies the presence of preference heterogeneity. Marine litter and health of fish stocks were the attributes with the highest values in absolute terms. This was followed by the size of the protected area coverage, whilst the creation of jobs was the least valued. The results highlight public support for the further collective action required by the EU in moving beyond the 2020 objective of achieving good environmental status of Europe's seas, even after considering the low WTP values of the minority classes in each country.