Journal Article

Regulating global biodiversity: what is the problem?

Tim Swanson and Ben Groom

in Oxford Review of Economic Policy

Published on behalf of The Oxford Review of Economic Policy Ltd

Volume 28, issue 1, pages 114-138
Published in print January 2012 | ISSN: 0266-903X
Published online March 2012 | e-ISSN: 1460-2121 | DOI:
Regulating global biodiversity: what is the problem?

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We distinguish between local problems of biodiversity loss and global ones, where international cooperation is required. Global biodiversity regulation involves choosing the optimal stopping rule regarding global land conversions, in order to ensure that some areas of unconverted natural reserves remain to support the production sector that exists on converted lands. The basic difficulty with implementing a solution to this global problem lies in the asymmetry in endowments between those states that have previously converted, and those that have not. We demonstrate that the fundamental problem of global biodiversity regulation is similar to the bargaining problem analysed by Nash, Rubinstein, and others. There are benefits from global land conversion, and there must be agreement on their distribution before the conversion process can be halted. Since the institutions addressing global biodiversity problems are either highly ineffectual (benefit-sharing agreements, prior informed-consent clauses) or very extreme (incremental cost contracts), the biodiversity bargaining problem remains unresolved. For this reason we anticipate that suboptimal conversions will continue to occur, as a way of protesting the ineffective and unfair approaches employed in addressing this problem to date.

Keywords: global biodiversity; international environmental policy; Nash bargaining; rational threats; Q240; Q280

Journal Article.  11681 words.  Illustrated.

Subjects: Renewable Resources and Conservation

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