The efficiency of conservation banking schemes with inter-regionally tradable credits and the role of mediators

Keisaku Higashida, Kenta Tanaka, Shunsuke Managi

Research output: Contribution to journalArticle

Abstract

The notion of tradable allowance schemes for biodiversity conservation (conservation banking) has been drawing attention and the number of such schemes has been increasing over the past few decades. An increase in the number of schemes increases the need for institutional designs that incorporate inter-regional or inter-scheme trading; however, this may be difficult because of the heterogeneity of biodiversity and the variation in evaluation methodologies. Focusing on the role of environmental traders as mediators, this study considers inter-scheme or inter-regional transactions of credits experimentally and explores the possibility that mediators simultaneously encourage efficiency and conservation. Experimental results suggest that environmental traders behave as theoretically predicted and enhance efficiency by exporting credits from areas with a higher environmental biodiversity value to those with a lower value. Our results highlight the importance of institutional frameworks in allowing market mechanisms to work effectively under conservation banking schemes.

Original languageEnglish
Pages (from-to)175-186
Number of pages12
JournalEconomic Analysis and Policy
Volume62
DOIs
Publication statusPublished - Jun 1 2019

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Mediator
Conservation
Credit
Banking
Biodiversity
Traders
Institutional framework
Market mechanism
Exporting
Institutional design
Evaluation methodologies
Biodiversity conservation

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)

Cite this

The efficiency of conservation banking schemes with inter-regionally tradable credits and the role of mediators. / Higashida, Keisaku; Tanaka, Kenta; Managi, Shunsuke.

In: Economic Analysis and Policy, Vol. 62, 01.06.2019, p. 175-186.

Research output: Contribution to journalArticle

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