Creating Markets for Habitat Conservation When Habitats are Heterogeneous

34 Pages Posted: 20 Apr 2016

See all articles by Kenneth M. Chomitz

Kenneth M. Chomitz

World Bank, Independent Evaluation Group

Timothy S. Thomas

World Bank

Antonio Salazar P. Brandao

Universidade do Estado do Rio de Janeiro (UERJ)

Date Written: October 8, 2004

Abstract

A tradable development rights (TDR) program focusing on biodiversity conservation faces a crucial problem defining which areas of habitat should be considered equivalent. Restricting the trading domain to a narrow area could boost the range of biodiversity conserved but could increase the opportunity cost of conservation. The issue is relevant to Brazil, where TDR-like programs are emerging. Current regulations require each rural property to maintain a forest reserve of at least 20 percent, but nascent policies allow some tradability of this obligation. Chomitz, Thomas, and Brandao use a simple, spatially explicit model to simulate a hypothetical state-level program. They find that wider trading domains drastically reduce landholder costs of complying with this regulation and result in environmentally preferable landscapes.

This paper - a product of the Infrastructure and Environment Team, Development Research Group - is part of a larger effort in the group to understand the economics of conservation.

Keywords: Brazil, conservation, environment, land use, Minas Gerais, tradable development rights

JEL Classification: R52, Q24

Suggested Citation

Chomitz, Kenneth M. and Thomas, Timothy Scott and Brandao, Antonio Salazar P., Creating Markets for Habitat Conservation When Habitats are Heterogeneous (October 8, 2004). World Bank Policy Research Working Paper No. 3429. Available at SSRN: https://ssrn.com/abstract=625307

Kenneth M. Chomitz (Contact Author)

World Bank, Independent Evaluation Group ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Timothy Scott Thomas

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Antonio Salazar P. Brandao

Universidade do Estado do Rio de Janeiro (UERJ) ( email )

Rio de Janeiro, 22030-000
Brazil

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