Conservation Conservation Economics, Science, and Policy Charles Perrings and Ann Kinzig 1 3 Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries. Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America. © Oxford University Press 2021 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above. You must not circulate this work in any other form and you must impose this same condition on any acquirer. Library of Congress Cataloging-i n- Publication Data Names: Perrings, Charles, author. | Kinzig, Ann P. (Ann Patricia) author. Title: Conservation : economics, science, and policy / Charles Perrings and Ann Kinzig, Tempe, Arizona. Description: New York : Oxford University Press, 2021. | Includes bibliographical references and index. Identifiers: LCCN 2020046931 (print) | LCCN 2020046932 (ebook) | ISBN 9780190613600 (hardback) | ISBN 9780190613617 (paperback) | ISBN 9780190613631 (epub) Subjects: LCSH: Conservation of natural resources. | Conservation of natural resources—Decision making. Classification: LCC S936.P47 2020 (print) | LCC S936 (ebook) | DDC 333.72—dc23 LC record available at https://lccn.loc.gov/2020046931 LC ebook record available at https://lccn.loc.gov/2020046932 DOI: 10.1093/ oso/ 9780190613600.001.0001 1 3 5 7 9 8 6 4 2 Paperback printed by LSC Communications, United States of America Hardback printed by Bridgeport National Bindery, Inc., United States of America In memory of Georgina Mace (1953–2 020) and Karl-G öran Mäler (1939–2 020) two wonderful people whose enduring contributions to science have influenced much of our thinking Contents Preface  xi List of Figures  xv List of Tables  xix List of Abbreviations  xxi 1 Environmental Conservation and Environmental Change  1 1.1 Introduction  1 1.2 The biological record  7 1.3 Implications for conservation  10 1.4 Plan of the book  19 PART I THE ECONOMIC THEORY OF CONSERVATION 2 The Decision Problem  27 2.1 Introduction  27 2.2 Elements of the decision problem  29 2.3 A numerical example: the wine storage problem  41 2.4 Summary and conclusions  44 3 Hotelling Conservation  47 3.1 Introduction  47 3.2 The Hotelling arbitrage condition  48 3.3 Hotelling prices and quantities  53 3.4 Renewable natural resources and the Hotelling arbitrage condition  56 3.5 Connecting Hotelling conservation and conservation biology  67 3.6 Summary and conclusions  69 4 The Conservation of Renewable Resources  72 4.1 Introduction  72 4.2 Marine capture fisheries  74 4.3 Forests and forestry  86 4.4 Rangelands  94 4.5 Summary and conclusions  100 PART II VALUATION 5 The Valuation of Environmental Goods and Services  107 5.1 Introduction  107 5.2 The basis of value  108 5.3 Ecosystem services and the value of nonmarketed environmental resources  114 viii Contents 5.4 The valuation of provisioning and cultural services  117 5.5 Revealed preference methods  119 5.6 Stated preference methods  124 5.7 The valuation of regulating services  130 5.8 Summary and conclusions  134 6 The Valuation of Environmental Assets  140 6.1 Introduction  140 6.2 Sustainability and the value of environmental assets  141 6.3 The value of environmental assets in the national accounts  145 6.4 Inclusive wealth  148 6.5 Environmental assets and total factor productivity  152 6.6 Summary and conclusions  156 7 Substitutability and the Valuation of Natural Capital  159 7.1 Introduction  159 7.2 Substitution in production  160 7.3 Substitution in a generalized model of joint production  168 7.4 Substitution and public goods  170 7.5 Net substitutes and complements  173 7.6 Conditional substitutes and complements  176 7.7 Summary and conclusions  178 PART III ALIGNING THE PRIVATE AND SOCIAL VALUE OF NATURAL RESOURCES 8 Environmental Public Goods  185 8.1 Introduction  185 8.2 The optimal provision of public goods  187 8.3 Types of public goods  192 8.4 Strategic behavior and the provision of public goods  198 8.5 Resolving the public goods problem  202 8.6 Summary and conclusions  204 9 Environmental Externalities  207 9.1 Introduction  207 9.2 The nature of environmental externalities  210 9.3 Unidirectional externalities  211 9.4 Positional externalities  216 9.5 Public externalities  219 9.6 Aligning private and social value  223 9.7 Summary and conclusions  230 10 Poverty, Value, and Conservation  234 10.1 Introduction  234 10.2 Income effects and poverty  237 10.3 Poverty- population- environment  240 Contents ix 10.4 Per capita income growth and conservation  243 10.5 Wealth, property rights, and conservation  246 10.6 Summary and conclusions  250 11 Conservation in Protected Areas  255 11.1 Introduction  255 11.2 Protected area design: ecological principles  257 11.3 Protected area design: economic principles  261 11.4 Protected areas and the supply of ecosystem services  268 11.5 Protected areas and poverty  271 11.6 Summary and conclusions  274 12 Conservation Beyond Protected Areas  279 12.1 Introduction  279 12.2 Conservation of threatened wild species outside protected areas  280 12.3 Conservation in agriculture  287 12.4 Habitat substitutability  298 12.5 Summary and conclusions  300 13 Conservation at the National Level  305 13.1 Introduction  305 13.2 Property rights  307 13.3 Legal restrictions on land use  309 13.4 Environmental offsets  314 13.5 Economic incentives  318 13.6 Summary and conclusions  326 14 Conservation at the International Level  331 14.1 Introduction  331 14.2 Migratory species  334 14.3 Transboundary and linked ecosystems  338 14.4 Trade, travel, and the movement of species  342 14.5 Strategic behavior and transboundary conservation  346 14.6 Funding conservation as a global public good  353 14.7 Summary and conclusions  357 15 Conservation in the Future  361 15.1 Introduction  361 15.2 Environmental trends  364 15.3 Economic trends  371 15.4 The population affected by conservation decisions  382 15.5 The optimal scale at which to conserve and the governance of conservation  387 Index  401