Economic analysis and market-based instruments for biodiversity conservation
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Vic Adamowicz's presentation from SARA at 10 Years conference
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Economic analysis and market-based instruments for biodiversity conservation
- 1. Economic analysis and market based instruments for biodiversity / species conservation Vic Adamowicz REES and Alberta Land Institute University of Alberta
- 2. Outline • Economic analysis – A Case Study – Setting the stage for Market Based Instruments (MBIs) • MBIs and Habitat / Biodiversity Conservation – Description – Canadian Examples – Advantages and Drawbacks • Another case study • Conclusions
- 3. A Case Study (Entem et al 2012) Milk River Watershed in SW Saskatchewan • 14,923 km2 • Located in the southwest corner of Saskatchewan – Bounded to the west by Alberta and the south by Montana • The primary land uses: – Agriculture • Ranches, Farms and Mixed Farms – Oil and Gas
- 4. Historical Range Maps for a Subset of Species (Entem et al 2012)
- 5. Conservation Activities Agriculture‐related activities considered: – Conservation easements – Reduced stocking rates – Conversion of hay/tame pasture and crops into native grassland – Shelterbelts in hay/tame pasture and crop fields – Retaining uncut strips in hay fields – Planting native grassland buffers around crop fields *Also considered oil and gas values in the region (Entem et al 2012)
- 6. Spatial Distribution of Costs (Entem et al 2012)
- 7. Cost‐effectiveness Analysis: Cost Curves for Provision of Species at Risk (Entem et al 2012)
- 8. Cost Effectiveness of Multi Species Plans (Entem et al 2012)
- 9. Alternative Programs (Entem et al 2012)
- 10. Market Based Instruments (MBIs) • MBIs for Conservation – Market Friction • e.g. Certification – Price Based • e.g. Payments for Ecosystem Services (DU Reverse Auction) – Quantity Based • e.g. Cap and Trade Systems (TDRs), Offsets (AB Grasslands, ACA ) • Why? – Achieve environmental goal at least cost – Incentives for conservation – Potential economies of scale, technological change? – Mechanism for stakeholder involvement
- 12. Offsets (Coggan et al, 2010; Weber et al 2011, Sustainable Prosperity 2011) • Voluntary versus Mandatory • Evaluation of offset – Equivalence or more? Ratios? • Definition of the baseline – Additionality? Avoided disturbance? • Spatial aspects • Temporal aspects – Timing of impacts and outcomes – Permanence? • Risk • Monitoring • Banking provisions • Public versus Private Lands • Crowding out?
- 14. Alberta Situation • Alberta Land Stewardship Act – Setting targets, using market based instruments to achieve targets • Voluntary Offsets • Offset Pilots • Other mechanisms being investigated – Lease swapping – Transferable Disturbance Rights
- 16. Case Study 2 ‐ Caribou • Cost effectiveness analysis (Hauer, et al 2012) • Implications for Offsets?
- 17. Woodland Caribou in Alberta ASRD and ACA 2010 http://environment.gov.ab.ca/info/library/ 8042.pdf
- 19. Costs per Self Sustaining Herd Percent of Net Present Value 1.6 1.4 1.2 1 Percent 100 0.8 75 0.6 50 40 0.4 0.2 0 0 2 4 6 8 10 12 14 16 Self Sustaining Herds
- 20. Caribou Case • Objectives – Habitat? – Population / Density? • Predator control? • Accelerated reclamation? – By when? • Potential for Offsets – Reclamation / regeneration (“slow”) – Avoided disturbance (declining baseline?) – Predator control, etc. (?) – Combinations?
- 22. Conclusions • Economic analysis can be used to provide information on cost‐effectiveness, identify approaches to provide incentives for conservation. • Market based instruments for biodiversity / species conservation in Canada – Relatively little experience – Considerable potential • Market design is critical