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Spatial differentiation of compensation payments for biodiversity enhancing land-use measures

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  • Wätzold, Frank
  • Drechsler, Martin

Abstract

Given that both the costs and the benefits of biodiversity-enhancing land-use measures are subject to spatial variation, considerations of allocational efficiency call for spatially differentiated compensation payments for such measures. However, when deciding whether to implement uniform or spatially differentiated compensation payments, the regulator has to balance the allocational efficiency losses of uniform payments with the disadvantages of spatially differentiated payments. To help resolve this issue, this paper provides a conceptual framework that allows the extent of allocational efficiency losses associated with uniform payments for biodiversity-enhancing land-use measures to be assessed. A simple ecologicaleconomic model is presented which calculates the efficiency losses associated with uniform payments for different types of benefit and cost functions.

Suggested Citation

  • Wätzold, Frank & Drechsler, Martin, 2002. "Spatial differentiation of compensation payments for biodiversity enhancing land-use measures," UFZ Discussion Papers 3/2002, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    • Handle: RePEc:zbw:ufzdps:32002
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    References listed on IDEAS

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    1. Stephen Polasky & Jeffrey D. Camm & Brian Garber-Yonts, 2001. "Selecting Biological Reserves Cost-Effectively: An Application to Terrestrial Vertebrate Conservation in Oregon," Land Economics, University of Wisconsin Press, vol. 77(1), pages 68-78.
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    More about this item

    Keywords

    Ecological-economic modelling; compensation payments; biodiversity;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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