Biodiversity conservation: Buy it to save it
at the Andrew Young School of Policy Studies

Mother Nature still needs an agent, someone who will protect her interests above all others. Although billions of dollars have been invested to protect biodiversity in developing nations, some natural scientists predict that a third or more of earth's species could become extinct in this century, according to AYSPS environmental economist Paul Ferraro.

Ferraro just might be the right agent. In his research on global biodiversity conservation, Ferraro argues that the best way to protect biodiversity, already a heavily traded commodity, is to "make it economically attractive and feasible for people to protect it instead of destroy it." His findings: direct payments to the caretakers who conserve biodiversity would serve developing nations better than any indirect intervention currently in use.

In "Direct Payments to Conserve Biodiversity" published in Science, Ferraro and Agnes Kiss report that the biodiversity of such nations has substantial economic value, so biodiversity conservation should be viewed as an important economic activity. Biodiversity conservation is a public good, they note. One way or another, it must be subsidized because individuals will not voluntarily bear its cost on behalf of society at large. They found that "Local users can reap far greater economic rewards from depleting biodiversity than from conserving it. …direct payments will help rectify this problem."

Ferraro's championing of direct payment for conservation in developing countries – a method commonly used in the U.S. (with land leases, purchases and easements) – flies against the more popular practice of self-financing "sustainable" activities like eco-tourism or extraction of unique biological products in developing countries. He shows how a direct payment policy can be more cost-efficient, effective and equitable, citing migration corridors on private land in Kenya that the Wildlife Foundation secured through conservation leases at only $4 an acre per year.

"We are not arguing against short-term assistance for profitable, eco-friendly activities that can protect biodiversity," Ferraro wrote in a March 2003 response to a "Letter to the Editor" by Jack A.A. Swart in Science. "Conservation practitioners and donors, however, must ask themselves why external assistance is necessary if these activities are so profitable."

The direct payment approach allows a nation's individuals and communities to decide how to meet their own goals, rather than taking subsidies for activities predetermined by those providing the indirect payments. "Given the lack of alternatives," Ferraro and Kiss conclude, "we believe that direct payments for biodiversity conservation offer the best and most effective use of limited global conservation funds."

Ferraro's research has secured him speaking invitations at international conferences on global biodiversity conservation. His findings have been covered in media outlets from National Public Radio to the Australian Broadcasting Company, and in print journals like New Scientist and Nature. He has advised Madagascar's Environmental Policy Support Project and is a contributing author for the Millennium Ecosystem Assessment project report, a $21 million comprehensive review of the state and management of the planet's ecological resources.

Related Reading

Ferraro, Paul. Assigning Priority to Environmental Policy Interventions in a Heterogeneous World. Journal of Policy Analysis and Management 22(1) (2003): 27-43.

_____, and Agnes Kiss. "Direct Payments to Conserve Biodiversity." Science 298(29) (2002): 1718-1719.

_____, and R.D. Simpson. "The Cost-effectiveness of Conservation Performance Payments." Land Economics 78(3) (2002): 339-353.

_____. "Global Habitat Protection: Limitations of development interventions and a role for conservation performance payments." Conservation Biology 15(4) (2001): 990-1000.