Understanding the Performance of Biodiversity Offset Markets: Evidence from An Integrated Ecological-Economic Model

Katherine Simpson; Frans de Vries; Martin Dallimer; Paul Armsworth; Nick Hanley

doi:10.3368/le.97.4.030420-0032R

Understanding the Performance of Biodiversity Offset Markets: Evidence from An Integrated Ecological-Economic Model

Katherine Simpson^*, Frans de Vries, Martin Dallimer, Paul Armsworth, Nick Hanley

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

6 Citations (Scopus)

Abstract

Biodiversity offset markets can incentivize private landowners to take actions that benefit biodiversity. A spatially explicit integrated ecological-economic model is developed and employed for a UK region where offset buyers (house developers) and sellers (farmers) interact through trading offset credits. We simulate how changes in the ecological metric and geographic scale affects the performance of the offset market. Results show that the choice of the metric has a significant effect on market liquidity and the spatial distribution of gains and losses in the “target” species. The results also consistently reveal relatively higher potential welfare gains for developers than for farmers.

Original language	English
Pages (from-to)	836-857
Journal	Land Economics
Volume	97
Issue number	4
Early online date	8 Oct 2021
DOIs	https://doi.org/10.3368/le.97.4.030420-0032R
Publication status	Published - 1 Nov 2021

Bibliographical note

Acknowledgements
We thank The Leverhulme Trust for funding this work under project RPG-2017-148 and members of our advisory group for numerous helpful comments on the research.

Access to Document

10.3368/le.97.4.030420-0032RLicence: Unspecified

http://le.uwpress.org/content/early/2021/09/28/le.97.4.030420-0032R.full.pdf+htmlLicence: Unspecified

Cite this

@article{5975aa3f85424272b385ca75d84b4fc9,

title = "Understanding the Performance of Biodiversity Offset Markets: Evidence from An Integrated Ecological-Economic Model",

abstract = "Biodiversity offset markets can incentivize private landowners to take actions that benefit biodiversity. A spatially explicit integrated ecological-economic model is developed and employed for a UK region where offset buyers (house developers) and sellers (farmers) interact through trading offset credits. We simulate how changes in the ecological metric and geographic scale affects the performance of the offset market. Results show that the choice of the metric has a significant effect on market liquidity and the spatial distribution of gains and losses in the “target” species. The results also consistently reveal relatively higher potential welfare gains for developers than for farmers.",

author = "Katherine Simpson and {de Vries}, Frans and Martin Dallimer and Paul Armsworth and Nick Hanley",

note = "Acknowledgements We thank The Leverhulme Trust for funding this work under project RPG-2017-148 and members of our advisory group for numerous helpful comments on the research.",

year = "2021",

month = nov,

day = "1",

doi = "10.3368/le.97.4.030420-0032R",

language = "English",

volume = "97",

pages = "836--857",

journal = "Land Economics",

number = "4",

}

TY - JOUR

T1 - Understanding the Performance of Biodiversity Offset Markets

T2 - Evidence from An Integrated Ecological-Economic Model

AU - Simpson, Katherine

AU - de Vries, Frans

AU - Dallimer, Martin

AU - Armsworth, Paul

AU - Hanley, Nick

N1 - Acknowledgements We thank The Leverhulme Trust for funding this work under project RPG-2017-148 and members of our advisory group for numerous helpful comments on the research.

PY - 2021/11/1

Y1 - 2021/11/1

N2 - Biodiversity offset markets can incentivize private landowners to take actions that benefit biodiversity. A spatially explicit integrated ecological-economic model is developed and employed for a UK region where offset buyers (house developers) and sellers (farmers) interact through trading offset credits. We simulate how changes in the ecological metric and geographic scale affects the performance of the offset market. Results show that the choice of the metric has a significant effect on market liquidity and the spatial distribution of gains and losses in the “target” species. The results also consistently reveal relatively higher potential welfare gains for developers than for farmers.

AB - Biodiversity offset markets can incentivize private landowners to take actions that benefit biodiversity. A spatially explicit integrated ecological-economic model is developed and employed for a UK region where offset buyers (house developers) and sellers (farmers) interact through trading offset credits. We simulate how changes in the ecological metric and geographic scale affects the performance of the offset market. Results show that the choice of the metric has a significant effect on market liquidity and the spatial distribution of gains and losses in the “target” species. The results also consistently reveal relatively higher potential welfare gains for developers than for farmers.

U2 - 10.3368/le.97.4.030420-0032R

DO - 10.3368/le.97.4.030420-0032R

M3 - Article

VL - 97

SP - 836

EP - 857

JO - Land Economics

JF - Land Economics

IS - 4

ER -

Understanding the Performance of Biodiversity Offset Markets: Evidence from An Integrated Ecological-Economic Model

Abstract

Bibliographical note

Access to Document

Fingerprint

Cite this