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Thresholds, Perverse Incentives, and Preemptive Conservation of Endangered Species

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  • Christian Langpap
  • JunJie Wu

Abstract

Implementation of the Endangered Species Act (ESA) on private land has historically focused on regulation after a species was officially listed. In recent years it has shifted toward offering pre-listing incentives to avoid listings and the costs and conflicts resulting from regulation. In this paper we take an initial step toward examining these pre-listing incentives. We allow the incentive structure, perverse incentives to destroy habitat or preemptive conservation, to be endogenously determined. We show that which incentive structure emerges depends on how high the conservation threshold is and on the relative costs of habitat conservation versus habitat destruction. It is critical to distinguish between these incentive structures because a policy that works in one setting does not necessarily work in the other. Our results shed light on policy decisions in several recent high-profile ESA cases.

Suggested Citation

  • Christian Langpap & JunJie Wu, 2017. "Thresholds, Perverse Incentives, and Preemptive Conservation of Endangered Species," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(S1), pages 227-259.
  • Handle: RePEc:ucp:jaerec:doi:10.1086/692070
    DOI: 10.1086/692070
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    Cited by:

    1. Christian Langpap & JunJie Wu, 2021. "Preemptive Incentives and Liability Rules for Wildfire Risk Management," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1783-1801, October.
    2. Frederik Noack & Ashley Larsen & Johannes Kamp & Christian Levers, 2022. "A bird's eye view of farm size and biodiversity: The ecological legacy of the iron curtain," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1460-1484, August.
    3. Pathak, Santosh & Wang, Hua & Adusumilli, Naveen C., 2022. "Contract Non-compliance and Moral Hazard: Evidence from Cost-share Programs in Louisiana, USA," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322324, Agricultural and Applied Economics Association.
    4. Sims, Charles & Aadland, David & Finnoff, David & Hochard, Jacob, 2020. "What are the benefits of delisting endangered species and who receives them?: Lessons from the gray wolf recovery in Greater Yellowstone," Ecological Economics, Elsevier, vol. 174(C).
    5. Holzer, Jorge & DePiper, Geret, 2019. "Intertemporal quota arbitrage in multispecies fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 93(C), pages 185-207.
    6. Malone, Trey & Melstrom, Richard T., 2020. "Where’s the beef? Cattle producers’ response to endangered species listings," Food Policy, Elsevier, vol. 91(C).
    7. Byl, Jacob P., 2019. "Perverse Incentives and Safe Harbors in the Endangered Species Act: Evidence From Timber Harvests Near Woodpeckers," Ecological Economics, Elsevier, vol. 157(C), pages 100-108.
    8. Naime, Julia & Angelsen, Arild & Rodriguez-Ward, Dawn & Sills, Erin O., 2024. "Participation, anticipation effects and impact perceptions of two collective incentive-based conservation interventions in Ucayali, Peru," Ecological Economics, Elsevier, vol. 217(C).

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