Understanding the performance of biodiversity offset markets: evidence from an integrated ecological - economic model

Simpson, K. H. , de Vries, F., Dallimer, M., Armsworth, P. R. and Hanley, N. (2021) Understanding the performance of biodiversity offset markets: evidence from an integrated ecological - economic model. Land Economics, 97(4), pp. 836-857. (doi: 10.3368/le.97.4.030420-0032R)

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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.

Item Type:Articles
Additional Information: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.
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Hanley, Professor Nicholas and Simpson, Dr Katherine
Authors: Simpson, K. H., de Vries, F., Dallimer, M., Armsworth, P. R., and Hanley, N.
College/School:College of Medical Veterinary and Life Sciences > School of Biodiversity, One Health & Veterinary Medicine
Journal Name:Land Economics
Publisher:University of Wisconsin Press
ISSN:0023-7639
ISSN (Online):1543-8325
Published Online:08 October 2021

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
301754Biodiversity offset markets for wetland conservationNicholas HanleyLeverhulme Trust (LEVERHUL)RPG-2017-148Institute of Biodiversity, Animal Health and Comparative Medicine