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Transferable Development Rights and Forest Protection: An Exploratory Analysis

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  • Kenneth M. Chomitz

    (Development Research Group, World Bank, Washington, D.C., kchomitz@worldbank.org)

Abstract

As agricultural frontiers expand, and habitats contract, potential conflicts between conservation and development goals increase. Transferable development rights (TDR) programs offer a means of minimizingthe opportunitycosts (in foregoneagricultural rents) of protectinga desired quantity of habitat. These programs may be particularly applicable to Brazil, where long-standing regulations require a fixed proportion of each property to be set aside as a forest reserve. The article develops a simple, geographically explicit simulation model to examine the economic and environmental impact of a hypothetical TDR program under alternative implementation scenarios. Dataonlandcover and land productivity from the Brazilianstate of Minas Gerais are used to calibrate the model. The model shows substantial reductions in conservation cost from widening the geographical scope of trading. Restricting the program to large landholders drastically reduces transactions costs while only mildly reducing the amount of forest placed under protection.

Suggested Citation

  • Kenneth M. Chomitz, 2004. "Transferable Development Rights and Forest Protection: An Exploratory Analysis," International Regional Science Review, , vol. 27(3), pages 348-373, July.
    • Handle: RePEc:sae:inrsre:v:27:y:2004:i:3:p:348-373
    DOI: 10.1177/0160017604266030
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    References listed on IDEAS

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    1. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
    2. Parks P. J. & Kramer R. A., 1995. "A Policy Simulation of the Wetlands Reserve Program," Journal of Environmental Economics and Management, Elsevier, vol. 28(2), pages 223-240, March.
    3. Theodore Panayotou, 1994. "Conservation of biodiversity and economic development: The concept of transferable development rights," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(1), pages 91-110, February.
    4. Simpson, R David & Sedjo, Roger A & Reid, John W, 1996. "Valuing Biodiversity for Use in Pharmaceutical Research," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 163-185, February.
    5. Stavins, Robert N & Jaffe, Adam B, 1990. "Unintended Impacts of Public Investments on Private Decisions: The Depletion of Forested Wetlands," American Economic Review, American Economic Association, vol. 80(3), pages 337-352, June.
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    Cited by:

    1. Chomitz, Kenneth M. & Thomas, Timothy S. & Salazar Brandao, Antonio, 2004. "Creating markets for habitat conservation when habitats are heterogeneous," Policy Research Working Paper Series 3429, The World Bank.

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