Biodiversity Bargaining: What is the Problem?
Timothy M. Swanson
University College London - Department of Economics and Faculty of Law
University of London - School of Oriental and African Studies (SOAS)
September 27, 2012
Review of Environment, Energy and Economics (Re3), September 2012
We distinguish between local problems of biodiversity loss and global ones, where international cooperation is required. Global biodiversity regulation involves choosing the optimal stopping rule regarding global land conversions, in order to ensure that some areas of unconverted natural reserves remain to support the production sector that exists on converted lands. The basic difficulty with implementing a solution to this global problem lies in the asymmetry in endowments between those states that have previously converted, and those that have not. There are benefits from global land conversion, and there must be agreement on their distribution before the conversion process can be halted. Since the institutions addressing global biodiversity problems are either highly ineffectual (benefit sharing agreements, prior informed consent clauses) or very extreme (incremental cost contracts), the biodiversity bargaining problem remains unresolved. For this reason we anticipate that suboptimal conversions will continue to occur, as a way of protesting the ineffective and unfair approaches employed in addressing this problem to date.
Number of Pages in PDF File: 8
Keywords: Global Biodiversity, International Environmental Policy, Nash Bargaining, Rational Threats
JEL Classification: Q240, Q280Accepted Paper Series
Date posted: October 1, 2012
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