Managing risk and uncertainty in systematic conservation planning with insufficient information

Abstract

1. Recent advances in systematic conservation planning make use of modern portfolio theory (MPT)-a framework to construct and select optimal allocation of assets-to address the challenges posed by climate change uncertainty. However, these methods are difficult to implement for fine-scale conservation planning when the information on future climate scenarios is insufficient. Insufficient information makes the estimators of the key inputs in the optimisation procedure unreliable leading to technical problems for the construction of optimal asset allocation.2. We identify three statistical methods-constant correlation model, the Ledoit-Wolf approach and the weighted non-negative least-squares approach-that can overcome the lack of sufficient information and enable the use of MPT for finescale conservation planning.3. We illustrate the use of the three methods for identifying efficient portfolio allocation strategies, that is, strategies that give minimum amount of risk for a chosen level of return or maximum return for a chosen level of risk, using case studies of wetland conservation planning in North America and coastal conservation planning in Australia. We compare conservation planning strategies with complete information using standard portfolio theory and with insufficient information using the three methods to highlight their advantages and disadvantages. We find the Ledoit-Wolf and weighted non-negative least-squares approaches perform well and can identify risk-return outcomes that are close to those identified with complete information.4. The methods presented in this study broaden the range of cases where the application of MPT is possible in conservation planning to enhance its uptake and lead to more efficient allocation of conservation resources.

Balancing Rare Species Conservation with Extractive Industries

“…Our results do not suggest that conservation planning frameworks that incorporate financial cost, risk, and real-world limiting factor (i.e., land tenure) will ever produce a truly "perfect" scenario [63,64]. Spatial conservation prioritization provides opportunities for us to maximize outcomes among conflicting objectives to create a "best" scenario to our knowledge and modeling parameters, but we lack the ability to fully represent reality when examining the interactions among nature and society.…”

Systematic nature positive markets

“…First, a key principle underpinning ∑α‐irreplaceability market offsets is that losses to development would not be sanctioned if they cannot be replaced. It is key that the market represents as many asset types as possible, even if their distribution is uncertain, to avoid unintentional losses of biodiversity being permitted because those features were absent from ∑α calculation (Popov et al., 2022). In this study, the wide variation in outcomes for different subsets of taxa illustrated the risks associated with conservation policies reliant on small numbers of indicator species whose suitability to represent the conservation needs of biodiversity and ecosystem processes is unknown (Yong et al., 2018).…”

“…Firstly, a key principle underpinning ∑α-irreplaceability market offsets is that losses to development are not sanctioned if they cannot be replaced. It is key the market should represent as many asset types as possible, even if their distribution is uncertain, to avoid unintentional losses of biodiversity being permitted because those features were absent from ∑α calculation (Popov et al 2022). In this context the value of ecological monitoring data gains new meaning.…”

Systematic Nature Positive Markets

“…Monitoring will be fundamental to the success of any financial market intended to support the recovery of Nature. It is key the market should represent as many asset types as possible, even if their distribution is uncertain, to avoid unintentional losses of biodiversity being permitted because those features were absent from α sum calculation (39). Rather than rating performance according to the resources or finance committed, irreplaceability should reward landowners able to deliver ecological outcomes at low cost (34).…”