The Economics of Conservation Targeting Strategies

Abstract

In recent years, payments to purchase resources or easements or to change landowner behavior have become a major vehicle for resource conservation and environmental protection. These funds use various strategies to target resources for conservation, the choice of which may lead to striking differences in economic and environmental performance. In this presentation, we present an analytic framework to evaluate the economic, environmental and distributional impacts of alternative targeting strategies. We argue that the prevailing U.S. federal policy of targeting conservation programs on the basis of onsite criteria ignores threshold effects in resource conservation, which may cause conservation funds to be overly dispersed geographically and result in substantial losses in economic efficiency. We show that when funds are insufficient to correct environmental problems in all areas, they should be concentrated in selected target areas. The empirical focus is on habitat investments to protect an important anadromous fish species in the Pacific Northwest, steelhead trout. Results of the analysis point to a substantial cumulative effect in the relationship between water quality and abundance in this fishery, which affects the efficiency of specific habitat investments.