OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi NATURE IN THE BALANCE OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi OUP CORRECTED PROOF – FINAL, 19/11/2013, SPi Nature in the Balance The Economics of Biodiversity Edited by DIETER HELM AND CAMERON HEPBURN 1 OUP CORRECTED PROOF – FINAL, 28/11/2013, SPi 3 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom 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 in certain other countries © Oxford University Press 2014 © Chapters 2, 6, 10, 11, 12, 13, 14, and 15 Oxford Review of Economic Policy 2012 The moral rights of the authors have been asserted First Edition published in 2014 Impression: 1 All rights reserved. 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Enquiries 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 Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2013940861 ISBN 978–0–19–967688–0 Printed in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi Acknowledgements Chapters 2, 6, 10, 11, 12, 13, 14, and 15 are revised articles originally published in Oxford Review of Economic Policy: volume 28, number 1, Spring 2012, ‘The Economics of Biodiversity’. Oxford Journals, Oxford University Press (<www. oxrep.oxfordjournals.org>). In addition to thanking all the authors who have contributed, we would like to express our thanks to Vicky Hibberd and Kerry Hughes who have worked very hard behind the scenes in gathering an enormous amount of material together and helping to turn it into this book. Dieter Helm and Cameron Hepburn OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi Contents List of Figures ix List of Tables x List of Abbreviations xii List of Contributors xv 1. Introduction 1 Dieter Helm and Cameron Hepburn 2. The Economic Analysis of Biodiversity 7 Dieter Helm and Cameron Hepburn Part I Concepts and Measurement 3. Biodiversity: Its Meanings, Roles, and Status 35 Georgina M. Mace 4. Identifying and Mapping Biodiversity: Where Can We Damage? 57 Kathy J. Willis, Marc Macias-Fauria, Alexandros Gasparatos, and Peter Long 5. The UK National Ecosystem Assessment: Valuing Changes in Ecosystem Services 79 Ian J. Bateman, Grischa Perino et al. Part II Valuing Biodiversity 6. Valuing Ecosystem Services and Biodiversity 101 Giles Atkinson, Ian J. Bateman, and Susana Mourato 7. The Economics of Ecosystems and Biodiversity (TEEB): Challenges and Responses 135 Pavan Sukhdev, Heidi Wittmer, and Dustin Miller Part III Natural Capital and Accounting 8. Natural Capital 153 Edward B. Barbier 9. Biodiversity and National Accounting 177 Kirk Hamilton OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi viii Contents Part IV International and Development Aspects 10. Biodiversity, Poverty, and Development: A Review 201 Charles Palmer and Salvatore Di Falco 11. Regulating Global Biodiversity: What is the Problem? 224 Timothy Swanson and Ben Groom Part V Policy Instruments and Incentives 12. Do Biodiversity Policies Work? The Case for Conservation Evaluation 2.0 251 Daniela A. Miteva, Subhrendu K. Pattanayak, and Paul J. Ferraro 13. Are Investments to Promote Biodiversity Conservation and Ecosystem Services Aligned? 285 Stephen Polasky, Kris Johnson et al. 14. Incentives, Private Ownership, and Biodiversity Conservation 315 Nick Hanley, Simanti Banerjee, Gareth D. Lennox, and Paul R. Armsworth 15. On the Potential for Speculation to Threaten Biodiversity Loss 341 Joanne C. Burgess, Chris J. Kennedy, and Charles (Chuck) Mason Bibliography 361 Index 409 OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi List of Figures 3.1. Schematic representation of the role of biodiversity in supporting ecosystem functions and wider societal benefits from ecosystems 48 6.1. Recreational values arising from a change in land use from farming to multi-purpose open-access woodland in Wales 118 8.1. The capital approach to sustainable development 158 8.2. Weak and strong sustainability 160 8.3. Adjusting NDP for reproducible, human, and natural capital 163 8.4. Real GDP and ANDP per-capita trends for the USA, 1970–2008 (constant 2000 US$) 165 8.5. Real GDP and ANDP per-capita trends for Thailand, 1970–2009 (constant 2000 US$) 171 9.1. PA rents per capita vs. GDP per capita, 2005 187 9.2. Distribution of PA rents as a percentage of GDP, 2005 188 11.1. Global regulation of biodiversity: optimal land-use conversion 227 11.2. A bargaining game—defined by conflict point and cooperative frontier 230 13.1. Maps showing the location by sub-county unit of lands purchased for conservation under both ecosystem service and biodiversity conservation strategies for dynamic and static land-use scenarios 303 13.2. The difference in lands purchased for conservation under the biodiversity conservation and ecosystem services objective across static and dynamic land-use scenarios 304 14.1. Surplus obtained by landowner cooperatives and conservation outcomes 324 14.2. Relative change in density of four bird species on moorland sheep and beef farms under Foresight scenarios 333 OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi List of Tables 3.1. Goals and targets agreed by the 10th meeting of the Parties to the Convention on Biological Diversity 43 5.1. Summary statistics for FGM per hectare in the 2000 baseline and in the various 2060 scenarios (real values, £, 2010) 84 5.2. Change in the value from baseline year of annual GHG emissions from GB terrestrial ecosystems in 2060 under the high-emission variants of the NEA scenarios (£ million/yr); negative values represent increases in annual costs of GHG emissions 85 5.3. Summary statistics showing the predicted changes in bird diversity from the 2000 baseline to NEA high-emission scenarios for 2060 87 5.4. Summary statistics for the change in guild richness for 19 species of farmland birds from the baseline to 2060 under each of the NEA high-emission scenarios 88 5.5. Changes in total value (£ million) of predicted annual visits under the various scenarios (high-emissions versions) 89 5.6. Changes in urban characteristics from the 2000 baseline to 2060 for each of the NEA scenarios 91 5.7. Per-household and aggregated benefit changes of scenarios for Great Britain 91 5.8. Summary impacts for the change from the 2000 baseline to 2060 under each of the high-emission NEA scenarios: Great Britain (£ million per annum) 93 6.1. Summary of economic valuation methods used in ecosystem service valuation 110 8.1. Changes in real GDP and ANDP per capita for the USA, 1970–2008 (%) 166 8.2. Wealth accounting for mangrove capital, Thailand 1970–2009 170 8.3. Real GDP and ANDP per capita, Thailand, 1970–2009 170 9.1. Countries with PA rents > 1% of GDP, by income class, 2005 189 9.2. Protected area extent and land values by income class, 2005 190 A9.1. Selected low-income countries, 2005 (US$) 193 A9.2. Selected middle-income countries, 2005 (US$) 194 A9.3. Selected OECD countries, 2005 (US$) 196 OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi List of Tables xi 11.1. Countries with greatest ‘species richness’ 226 11.2. GDP per capita in the diversity-rich states (PPP) 226 12.1. Protected area studies using rigorous empirical analysis 258 12.2. Decentralization studies using rigorous empirical analysis 261 12.3. PES studies using rigorous empirical analysis 264 13.1. Change in the value of ecosystem services and the biodiversity score with a static landscape under an ecosystem service objective and a biodiversity objective 296 13.2. Change in the value of ecosystem services (ES) and the biodiversity score between 2001 and 2026 for the State of Minnesota with a dynamic landscape 297 13.3. Average land-use change dynamics between 2001 and 2026 for Minnesota by land-use type 299 13.4. Average impacts of land-use change on the value of ecosystem services and the biodiversity score by land-use category 300 13.5. Hectares conserved between 2001 and 2026 by land-use category 302 13.6. Average impacts of conserving land on the value of ecosystem services and the biodiversity score by land-use category 302 13.7. Change in the value of ecosystem services (ES) and the biodiversity score between 2001 and 2026 for the State of Minnesota under various scenarios under low carbon, high carbon, and high water-quality value 305 14.1. Schematic of policy design attributes and responsibility for actions 334 15.1. Numerical analysis of banking on extinction for the case of rhino poaching 351 OUP CORRECTED PROOF – FINAL, 7/11/2013, SPi List of Abbreviations AB Agglomeration Bonus AES agri-environment schemes ALBA Bolivarian Alliance for the Peoples of Our America (Spanish: Alianza Bolivariana para los Pueblos de Nuestra América) ANDP adjusted net domestic product BACI Before–After–Control–Impact BBS Birds Breeding Bird