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Who Cares about Biodiversity? Optimal Conservation and Transboundary Biodiversity Externalities

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Abstract

The Convention on Biological Diversity’s (2010) target to reduce the rate of biodiversity loss was achieved by very few countries. Why? We use the theory of conservation implicit in the Hotelling model of non-renewable resource pricing to analyze the problem, distinguishing between the benefits to countries where conservation takes place, and to other countries. We estimate models for three taxonomic groups, and find that while individual countries value conservation within their borders, in poor countries this effect is dominated by the negative impact of income growth. International concessional financial contributions to conservation in poor countries are found to be statistically insignificant. We conclude that countries care about the biodiversity within their national borders, but only when development priorities permit, and only when it becomes scarce enough that its value grows more rapidly than the return on alternative assets. There is little evidence that high income countries yet care sufficiently about biodiversity in the places where it is most threatened to affect conservation outcomes there.

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Perrings, C., Halkos, G. Who Cares about Biodiversity? Optimal Conservation and Transboundary Biodiversity Externalities. Environ Resource Econ 52, 585–608 (2012). https://doi.org/10.1007/s10640-012-9544-8

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