Wetland Conservation in Southern Ontario: Exploring a Modified Club Goods Approach by Brook Coatsworth A Thesis Presented to The University of Guelph In partial fulfillment of requirements for the degree of Master of Science in Food, Agriculture and Resource Economics Guelph, Ontario, Canada © Brook Coatsworth, December, 2012 Abstract WETLAND CONSERVATION IN SOUTHERN ONTARIO: EXPLORING A MODIFIED CLUB GOODS APPROACH Brook Coatsworth Advisor: University of Guelph, 2012 Dr. Glenn Fox This thesis is an exploration of a modified club goods approach to wetland conservation in southern Ontario as an alternative to the current policy approach. As the regulatory framework for wetland conservation continues to develop, however, so does an emerging resistance to participate in government conservation programs by private rural landowners protesting regulatory erosion of citizen rights in private land ownership. The modified club goods approach was evaluated as a fair and effective conservation method through a multiple-case study that explored six non-governmental organizations applying a modified club goods conservation model. As non-governmental organizations broaden their economic base to increase their scope of operations, they are susceptible to influence from changing sources of revenue. They must remain accountable and transparent to members and donors in order to receive their continued financial support, rather than depending on government funds which leads to an organization’s evolution away from the modified model. iii Acknowledgements I owe a great debt of gratitude to my advisor, Dr. Glenn Fox, for his invaluable guidance, patience and dedication to my research and for sharing his wealth of academic and professional experiences with me throughout my graduate studies. Dr. Alfons Weersink and Dr. John FitzGibbon also played an integral role in the development of my thesis as members of my trusted committee. I could not have completed my research without their comments, suggestions and words of encouragement. Thank you to the to the professors, staff and students of the Food, Agricultural and Resource Economics Department who took an interest in my research, offered advice and at times, much needed criticism. To everyone else who helped me, including the various non- governmental organizations that I studied, the landowners who shared their stories and the Ontario Ministry of Agriculture, Food and Rural Affaires for funding my research – thank you. To my parents, family and friends, thank you for providing me with an incredible support network and plenty of distractions when they were due. And most importantly my fiancée Catharina, thank you for being a source of inspiration, motivation and an example of hard work. You are truly an amazing woman and without you I would not have accomplished all that I have. iv Table of Contents Chapter 1 - Introduction to Wetland Conservation in Southern Ontario 1.1 Background……………………………………………………………… 1 1.2 Economic Problem………………………………………………………. 6 1.3 Economic Research Problem……………………………………………. 7 1.4 Purpose and Objectives………………………………………………….. 8 1.5 Chapter Outlines…………………………………………………………. 9 Chapter 2 - Wetland Conservation in Southern Ontario: The Policy Approach 2.1 Introduction………………………………………………………………. 11 2.2 Southern Ontario Wetland Loss from 1800 until 2002………………. 12 2.2.1 Southern Ontario Wetland Loss from 1800 to 1867: An Alternative Analysis…………………………………………….. 15 2.2.2 Wetland Distribution Across Southern Ontario from 1800 to 2007…………………………………………………….. 18 2.3 A Review of Wetland Policies Guiding Wetland Conservation in Southern Ontario………………………………………………………. 21 2.3.1 Canadian Federal Wetland Policy………………………………... 22 2.3.2 Ontario Provincial Wetland Policy………………………………. 23 2.3.3 Regional Wetland Policy in Ontario…………………………….. 27 2.3.4 Local Wetland Policy in Ontario………………………………… 31 2.4 Ontario Provincial Legislative Acts Enforcing Wetland Policies………. 32 2.5 Summary of the Policy Approach to Wetland Conservation in Southern Ontario………………………………………………………. 34 2.5.1 Regulatory Takings………………………………………………. 36 2.5.2 Consequences of the Policy Approach…………………………… 39 2.5.3 Evaluating Wetland Policies and the Policy Approach………….. 41 2.6 Conclusions………………………………………………………………. 43 Chapter 3 - Club Goods Theory and the Modified Club Goods Model 3.1 Introduction………………………………………………………………. 45 3.2 An Economic Theory of Clubs…………………………………………... 45 3.2.1 Public Goods, Private Goods and Club Goods…………………... 45 3.2.2 The Provision of Club Goods…………………………………….. 48 3.2.3 The Club Goods Model…………………………………………... 49 3.2.4 Applications of Club Goods Theory……………………………… 50 3.3 Differentiating Club Goods from Public Goods…………………………. 51 3.4 Transforming Public Goods to Club Goods……………………………… 53 3.4.1 Club Provision of Environmental Goods and Services………….. 57 v 3.5 Modifying the Club Goods Model ………………………………………. 58 3.6 Non-Governmental Organizations……………………………………….. 60 3.6.1 Operational Characteristics of Non-Government Organizations... 61 3.6.2 Club Provision of Environmental Goods and Services by Non-Government Organizations…………………………………. 65 3.7 Conclusions………………………………………………………………. 66 Chapter 4 - Method of Economic Research and Analysis 4.1 Introduction………………………………………………………………. 68 4.2 Methodology……………………………………………………………... 68 4.3 Method…………………………………………………………………… 69 4.3.1 Research Design………………………………………………….. 69 4.3.2 Data Collection…………………………………………………… 73 4.3.3 Data Analysis…………………………………………………….. 76 4.3.4 Wetland Conservation Data………………………………………. 77 4.4 Case Study Protocol………………………………………………………. 78 4.4.1 Overview of the Case Study Protocol…………………………….. 78 4.4.2 Procedures for Conducting Each Case…………………………… 79 a) Selecting Sources of Evidence ………………………………... 79 b) Conducting Interviews ……………………………………….. 80 4.4.3 Gathering Case Study Evidence………………………………….. 81 4.4.4 The Multiple-Case Study and Analysis Plan…………………….. 84 I. Case Studies…………………………………………………….. 84 a) Case Description …………………………………………….. 84 b) Financial Information and Trend Analysis …………………. 85 c) Application of the Modified Club Goods Model …………….. 87 II. Cross-Case Analysis…………………………………………….. 91 4.5 Procedure for Selecting Cases……………………………………………. 95 4.5.1 Six Non-government Conservation Organizations………………. 97 4.6 Summary…………………………………………………………………. 99 Chapter 5 - Six Case Studies Exploring the Modified Club Goods Approach to Wetland Conservation in Southern Ontario 5.1 Introduction………………………………………………………………. 102 5.2 General Procedures for Gathering and Analysing Financial Data………. 102 5.2.1 Assets, Liabilities and Total Net Assets from 2000 to 2010……. 103 5.2.2 Sources of Revenue from 2000 to 2010…………………………. 104 5.2.3 Expenditures from 2000 to 2010………………………………… 106 5.3 Glossary of Financial Definitions……………………………………….. 108 5.4 Case Study: Trout Unlimited Canada vi 5.4.1 Case Description…………………………………………………. 110 5.4.2 Financial Information and Trend Analysis………………………. 111 5.4.3 Application of the Modified Club Goods Model………………… 114 5.5 Case Study: The Delta Waterfowl Foundation 5.5.1 Case Description…………………………………………………. 118 5.5.2 Financial Information and Trend Analysis………………………. 119 5.5.3 Application of the Modified Club Goods Model………………… 122 5.6 Case Study: The Nature Conservancy Canada 5.6.1 Case Description………………………………………………….. 125 5.6.2 Financial Information and Trend Analysis……………………….. 126 5.6.3 Application of the Modified Club Goods Model…………………. 129 5.7 Case Study: The Ontario Federation of Anglers and Hunters 5.7.1 Case Description………………………………………………….. 131 5.7.2 Financial Information and Trend Analysis……………………….. 132 5.7.3 Application of the Modified Club Goods Model…………………. 135 5.8 Case Study: The Canadian Wildlife Federation 5.8.1 Case Description………………………………………………….. 138 5.8.2 Financial Information and Trend Analysis……………………….. 139 5.8.3 Application of the Modified Club Goods Model…………………. 142 5.9 Case Study: Ducks Unlimited Canada 5.9.1 Case Description……………………………………………..…… 144 5.9.2 Financial Information and Trend Analysis……………………….. 145 5.9.3 Application of the Modified Club Goods Model………………… 149 5.10 Analysis of the Multiple-Case Study…………………………………….. 151 5.11 Cross-Case Analysis……………………………………………………… 153 5.11.1 Comparing Levels of Conformity to the Modified Club Goods Model…………………………………………………….. 153 5.11.2 Comparing Approaches to Wetland Conservation………………. 154 5.11.3 Comparing Revenue and Expenditure Trends from 2002 to 2010…………………………………………………….. 157 5.11.4 Comparing Government Influence on Conservation Programs… 160 5.12 Summary of Cross-Case Analysis………………………………………. 162 Chapter 6 - Findings and Conclusions 6.1 Summary of Findings……………………………………………………. 164 6.2 Principle Findings……………………………………………………….. 166 6.3 Implications of Findings………………………………………………… 168 6.4 Limitations of Study and Recommendations for Future Research……… 170 References ……………………………………………………………………….. 263 vii List of Tables Table 2.1 - Provincial Statutes Protecting the Development of Wetlands…………….. 33 Table 4.1 - Case Study Tactics for Four Research Design Tests………………………. 68 Table 4.2 - Four Sources of Evidence for Case Study Research and the Strengths and Weaknesses of Each Source……………………………. 75 Table 5.1.1 - Trout Unlimited Canada Assets, Liabilities and Total Net Assets from 2000 to 2010……………………………………………... 174 Table 5.1.2 - Trout Unlimited Canada Sources of Revenue from 2000 to 2010………... 175 Table 5.1.3 - Trout Unlimited Canada Expenditures from 2000 to 2010……………….. 177 Table 5.1.4 - Trout Unlimited Canada - The Modified Club Goods Model: Financial Influence of Members