Conference Agenda

We present a choice experiment to estimate the non-market Net Operating Surplus (NOS) of threatened wild species for Monetary Ecosystem Accounting. We use the Simulated Exchange Value (SEV) method, which estimates the maximum amount that could be internalized in a hypothetical market, considering the simulated demand, supply and market structure. The demand is estimated from the choice experiment based on the willingness to pay, additional to the ordinary costs funded with taxes, to avoid an increase in the number of wild species in each threat category of the IUCN Red List. For comparison purposes, we also present equivalent variation estimates. We applied this approach to a survey of the general population of Spain and Portugal for valuing threatened wild bird species in the coastal wetlands of the southwestern Iberian Peninsula. The results show that willingness to pay increases with the number of species reduced in each threat category, with higher significant values for the critically endangered category and no significant differences between vulnerable and endangered species. The NOS estimated using the SEV method offers an annual value of €2,448 per hectare. The equivalent variation is €4,063 per hectare and year.

The impacts of biodiversity loss on human well-being depend on how much we value benefits from nature and the extent to which substitutes exist in the market for these benefits. The lack of markets for environmental goods and services, coupled with non-linearities and irreversibility in socio-environmental systems, present unique challenges for understanding the consequences of biodiversity loss. We use a rationed-good framework to explore how species scarcity impacts marginal WTP for species and its income elasticity. We note that marginal WTP need not be decreasing in species abundance and may even be increasing, if the associated suite of benefits contributes to real income via reductions in defensive expenditures. Using a new dataset of species abundance and species-level WTP estimates, we test our predictions that species abundance will impact marginal WTP and its income elasticity. Our point estimates of the income elasticity of WTP (0.44-0.51) are stable across a range of model specifications. Under the assumption of homothetic preferences, this value suggests that the species in our dataset are generally weakly substitutable with market goods (sigma = 1.96-2.27); however, we show that complementarity between species and market goods increases as the species’ level of threat increases: eta = 1.135, sigma = 0.881 for critically endangered species. The observed relationships cannot be captured by the functional forms for utility used in many models driving policymaking. Our findings indicate that the market composite and the benefits to human well-being from species become more complementary as species abundance decreases.

We study the Pigouvian solution for biodiversity loss, a fee levied on nature loss from land-use change. Combining Finnish data on land-use changes and property price transactions to a biodiversity index, we quantify the economic and environmental impacts of a "nature loss fee" which maximizes the biodiversity gains for a fixed government budget. We examine five biodiversity-weighting approaches to fee structures and their effects across urban-rural categories and regions. We find that a uniform area-based fee on deforestation significantly reduces the loss of forest and biodiversity. An approach targeting biodiversity hotspots effectively preserves them at a relatively low cost, while a middle-ground policy based on a linearly weighted area-and-quality measure balances deforestation reduction and biodiversity preservation across regions. Comparing these fees to command-and-control policies, we find that nature loss fees achieve biodiversity preservation at significantly lower costs.