IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v47y2014icp14-24.html
   My bibliography  Save this article

Optimal contract length for biodiversity conservation under conservation budget constraint

Author

Listed:
  • Juutinen, Artti
  • Ollikainen, Markku
  • Mönkkönen, Mikko
  • Reunanen, Pasi
  • Tikkanen, Olli-Pekka
  • Kouki, Jari

Abstract

We examine the optimal length of a contract period in a conservation program with payments for ecosystem services aiming at protecting biodiversity on privately owned forests. The government chooses the number of stands and the length of contracts so as to maximize biodiversity benefits under a binding conservation budget. We examine the implication of two alternative budgets: a separate budget for each period (periodic budget) or one budget that to be used in all periods (intertemporal budget). The impact of the budget type shows up in the fact that with intertemporal budget choice set is larger and more high quality stands are available for contracting. Based on theoretical characterization we conduct a numerical landscape-level analysis. We find that both short and long conservation contracts are used to protect privately owned forest land. Transactions costs tend to reduce the number of short contracts. A budget increase results in a use of longer contracts.

Suggested Citation

  • Juutinen, Artti & Ollikainen, Markku & Mönkkönen, Mikko & Reunanen, Pasi & Tikkanen, Olli-Pekka & Kouki, Jari, 2014. "Optimal contract length for biodiversity conservation under conservation budget constraint," Forest Policy and Economics, Elsevier, vol. 47(C), pages 14-24.
    • Handle: RePEc:eee:forpol:v:47:y:2014:i:c:p:14-24
    DOI: 10.1016/j.forpol.2013.11.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389934113002451
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.forpol.2013.11.008?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gulati, Sumeet & Vercammen, James, 2005. "The Optimal Length of an Agricultural Carbon Contract," Working Papers 37027, University of Victoria, Resource Economics and Policy.
    2. Gulati, Sumeet & Vercammen, James, 2006. "Time inconsistent resource conservation contracts," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 454-468, July.
    3. Lennox, Gareth D. & Armsworth, Paul R., 2011. "Suitability of short or long conservation contracts under ecological and socio-economic uncertainty," Ecological Modelling, Elsevier, vol. 222(15), pages 2856-2866.
    4. Wendland, Kelly J. & Honzák, Miroslav & Portela, Rosimeiry & Vitale, Benjamin & Rubinoff, Samuel & Randrianarisoa, Jeannicq, 2010. "Targeting and implementing payments for ecosystem services: Opportunities for bundling biodiversity conservation with carbon and water services in Madagascar," Ecological Economics, Elsevier, vol. 69(11), pages 2093-2107, September.
    5. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
    6. Sumeet Gulati & James Vercammen, 2005. "The Optimal Length of an Agricultural Carbon Contract," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(4), pages 359-373, December.
    7. Strang, William J, 1983. "On the Optimal Forest Harvesting Decision," Economic Inquiry, Western Economic Association International, vol. 21(4), pages 576-583, October.
    8. Ferraro, Paul J., 2008. "Asymmetric information and contract design for payments for environmental services," Ecological Economics, Elsevier, vol. 65(4), pages 810-821, May.
    9. Nick Hanley & Simanti Banerjee & Gareth D. Lennox & Paul R. Armsworth, 2012. "How should we incentivize private landowners to ‘produce’ more biodiversity?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(1), pages 93-113, Spring.
    10. Juutinen, Artti & Reunanen, Pasi & Mönkkönen, Mikko & Tikkanen, Olli-Pekka & Kouki, Jari, 2012. "Conservation of forest biodiversity using temporal conservation contracts," Ecological Economics, Elsevier, vol. 81(C), pages 121-129.
    11. Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
    12. Juutinen, Artti & Mäntymaa, Erkki & Ollikainen, Markku, 2013. "Landowners’ conservation motives and the size of information rents in environmental bidding systems," Journal of Forest Economics, Elsevier, vol. 19(2), pages 128-148.
    13. Ruben N. Lubowski & Michael J. Roberts, 2005. "How Cost-Effective Are Land Retirement Auctions? Estimating the Difference between Payments and Willingness to Accept in the Conservation Reserve Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1239-1247.
    14. Wunder, Sven & Engel, Stefanie & Pagiola, Stefano, 2008. "Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries," Ecological Economics, Elsevier, vol. 65(4), pages 834-852, May.
    15. Juutinen, Artti & Mantymaa, Erkki & Monkkonen, Mikko & Svento, Rauli, 2008. "Voluntary agreements in protecting privately owned forests in Finland -- To buy or to lease," Forest Policy and Economics, Elsevier, vol. 10(4), pages 230-239, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jarisch, Isabelle & Bödeker, Kai & Bingham, Logan Robert & Friedrich, Stefan & Kindu, Mengistie & Knoke, Thomas, 2022. "The influence of discounting ecosystem services in robust multi-objective optimization – An application to a forestry-avocado land-use portfolio," Forest Policy and Economics, Elsevier, vol. 141(C).
    2. Miljand, Matilda & Bjärstig, Therese & Eckerberg, Katarina & Primmer, Eeva & Sandström, Camilla, 2021. "Voluntary agreements to protect private forests – A realist review," Forest Policy and Economics, Elsevier, vol. 128(C).
    3. Nguyen, Trung Thanh & Nghiem, Nhung, 2016. "Optimal forest rotation for carbon sequestration and biodiversity conservation by farm income levels," Forest Policy and Economics, Elsevier, vol. 73(C), pages 185-194.
    4. Triviño, María & Juutinen, Artti & Mazziotta, Adriano & Miettinen, Kaisa & Podkopaev, Dmitry & Reunanen, Pasi & Mönkkönen, Mikko, 2015. "Managing a boreal forest landscape for providing timber, storing and sequestering carbon," Ecosystem Services, Elsevier, vol. 14(C), pages 179-189.
    5. Thilo W. Glebe, 2022. "The influence of contract length on the performance of sequential conservation auctions," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(2), pages 739-764, March.
    6. Sharma, Bijay P. & Cho, Seong-Hoon, 2021. "Analyzing how forest-based amenity values and carbon storage benefits affect spatial targeting for conservation investment," Forest Policy and Economics, Elsevier, vol. 131(C).
    7. Juutinen, Artti & Ahtikoski, Anssi & Lehtonen, Mika & Mäkipää, Raisa & Ollikainen, Markku, 2018. "The impact of a short-term carbon payment scheme on forest management," Forest Policy and Economics, Elsevier, vol. 90(C), pages 115-127.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Di Corato, Luca & Dosi, Cesare & Moretto, Michele, 2018. "Multidimensional auctions for long-term procurement contracts with early-exit options: The case of conservation contracts," European Journal of Operational Research, Elsevier, vol. 267(1), pages 368-380.
    2. Vogt, Nora & Bizer, Kilian, 2013. "Lock-in effects in competitive bidding schemes for payments for ecosystem services: Revisiting the fundamental transformation," University of Göttingen Working Papers in Economics 158, University of Goettingen, Department of Economics.
    3. Philippe Le Coent & Coralie Calvet, 2016. "Challenges of achieving biodiversity offsetting through agri-environmental schemes: evidence from an empirical study," Working Papers 16-10, LAMETA, Universtiy of Montpellier.
    4. Cho, Seong-Hoon & Soh, Moonwon & English, Burton C. & Yu, T. Edward & Boyer, Christopher N., 2019. "Targeting payments for forest carbon sequestration given ecological and economic objectives," Forest Policy and Economics, Elsevier, vol. 100(C), pages 214-226.
    5. Whitten, Stuart M., 2017. "Designing and implementing conservation tender metrics: Twelve core considerations," Land Use Policy, Elsevier, vol. 63(C), pages 561-571.
    6. Philippe Coent, 2023. "Payment for environmental services related to aquifers: a review of specific issues and existing programmes," Review of Agricultural, Food and Environmental Studies, Springer, vol. 104(3), pages 273-310, December.
    7. Calvet, Coralie & Le Coent, Philippe & Napoleone, Claude & Quétier, Fabien, 2019. "Challenges of achieving biodiversity offset outcomes through agri-environmental schemes: Evidence from an empirical study in Southern France," Ecological Economics, Elsevier, vol. 163(C), pages 113-125.
    8. John Rolfe & Romy Greiner & Jill Windle & Atakelty Hailu, 2011. "Testing for allocation efficiencies in water quality tenders across catchments, industries and pollutants: a north Queensland case study," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(4), pages 518-536, October.
    9. Frans P. Vries & Nick Hanley, 2016. "Incentive-Based Policy Design for Pollution Control and Biodiversity Conservation: A Review," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(4), pages 687-702, April.
    10. Scheufele, Gabriela & Bennett, Jeff, 2013. "Payments for Environmental Services: Concepts and Applications," Research Reports 244011, Australian National University, Effective Implementation of Payments for Environmental Services in Lao PDR.
    11. Krawczyk, Michał & Bartczak, Anna & Hanley, Nick & Stenger, Anne, 2016. "Buying spatially-coordinated ecosystem services: An experiment on the role of auction format and communication," Ecological Economics, Elsevier, vol. 124(C), pages 36-48.
    12. Liu, Zhaoyang & Kontoleon, Andreas, 2018. "Meta-Analysis of Livelihood Impacts of Payments for Environmental Services Programmes in Developing Countries," Ecological Economics, Elsevier, vol. 149(C), pages 48-61.
    13. Ma, Zhao & Bauchet, Jonathan & Steele, Diana & Godoy, Ricardo & Radel, Claudia & Zanotti, Laura, 2017. "Comparison of Direct Transfers for Human Capital Development and Environmental Conservation," World Development, Elsevier, vol. 99(C), pages 498-517.
    14. Lennox, Gareth D. & Armsworth, Paul R., 2011. "Suitability of short or long conservation contracts under ecological and socio-economic uncertainty," Ecological Modelling, Elsevier, vol. 222(15), pages 2856-2866.
    15. Vedel, Suzanne Elizabeth & Jacobsen, Jette Bredahl & Thorsen, Bo Jellesmark, 2015. "Forest owners' willingness to accept contracts for ecosystem service provision is sensitive to additionality," Ecological Economics, Elsevier, vol. 113(C), pages 15-24.
    16. Andeltová, Lucie & Catacutan, Delia C. & Wünscher, Tobias & Holm-Müller, Karin, 2019. "Gender aspects in action- and outcome-based payments for ecosystem services—A tree planting field trial in Kenya," Ecosystem Services, Elsevier, vol. 35(C), pages 13-22.
    17. Messer, Kent D. & Duke, Joshua M. & Lynch, Lori & Li, Tongzhe, 2017. "When Does Public Information Undermine the Efficiency of Reverse Auctions for the Purchase of Ecosystem Services?," Ecological Economics, Elsevier, vol. 134(C), pages 212-226.
    18. Schomers, Sarah & Matzdorf, Bettina, 2013. "Payments for ecosystem services: A review and comparison of developing and industrialized countries," Ecosystem Services, Elsevier, vol. 6(C), pages 16-30.
    19. Juutinen, Artti & Mäntymaa, Erkki & Ollikainen, Markku, 2013. "Landowners’ conservation motives and the size of information rents in environmental bidding systems," Journal of Forest Economics, Elsevier, vol. 19(2), pages 128-148.
    20. Ingram, Jane Carter & Wilkie, David & Clements, Tom & McNab, Roan Balas & Nelson, Fred & Baur, Erick Hogan & Sachedina, Hassanali T. & Peterson, David Dean & Foley, Charles Andrew Harold, 2014. "Evidence of Payments for Ecosystem Services as a mechanism for supporting biodiversity conservation and rural livelihoods," Ecosystem Services, Elsevier, vol. 7(C), pages 10-21.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:47:y:2014:i:c:p:14-24. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.