Minimax regret discounting

The paper considers an environmental policy decision in which the appropriate approach for discounting future costs and benefits is unknown. Uncertainty about the discount rate is formulated as a decision under Knightian uncertainty. To solve this, we employ minimax regret, a decision criterion that is much less conservative then the related criterion maximin—in particular, it can be shown to implement a “proportional response” in that it equally balances concern about the mistake of doing too little with that of doing too much. Despite the criterion's balanced nature, the minimax regret solution mimics a policy that maximizes the present discounted value of future net benefits with an effective (certainty-equivalent) discount rate that declines over time to the lowest possible rate. In addition to reinforcing Weitzman's (1998) original limiting result, the approach generates concrete policy advice when decision makers are unable to specify a prior over possible discount rates. We apply it to the Stern–Nordhaus discounting debate and find that the effective discount rate converges to the Stern rate in just under 200 years.     

Has Economic Research Answered the Needs of Environmental Policy?

Efficient environmental regulation requires empirical estimates of the benefits and costs of environmental standards and policies. In the last 25 years, economists have made considerable progress in developing methods for measuring environmental benefits and in providing empirical estimates of costs and benefits. This paper reviews this progress. It examines by category of benefit the advancements made in providing estimates that can be used in benefit-cost analyses and identifies areas where additional research is required.     

Implementing optimal taxes using tradable share permits

This paper presents a simple system for efficient regulation under asymmetric information. Each firm's income is controlled by a tax that depends on the firm's own output and on a parameter construed as a share permit. These “shares of total expected output” lower a firm's tax burden and are acquired in a competitive market. By employing this scheme, the planner only requires knowledge of marginal damage to induce the first-best outcome. Relative to a traditional cap-and-trade approach the system increases expected social welfare.     

Geography and Recovery under the U.S. Endangered Species Act

Abstract: The U.S. Endangered Species Act (ESA) defines an endangered species as one “at risk of extinction throughout all or a significant portion of its range.” The prevailing interpretation of this phrase, which focuses exclusively on the overall viability of listed species without regard to their geographic distribution, has led to development of listing and recovery criteria with fundamental conceptual, legal, and practical shortcomings. The ESA's concept of endangerment is broader than the biological concept of extinction risk in that the “esthetic, ecological, educational, historical, recreational, and scientific” values provided by species are not necessarily furthered by a species mere existence, but rather by a species presence across much of its former range. The concept of “significant portion of range” thus implies an additional geographic component to recovery that may enhance viability, but also offers independent benefits that Congress intended the act to achieve. Although the ESA differs from other major endangered‐species protection laws because it acknowledges the distinct contribution of geography to recovery, it resembles the “representation, resiliency, and redundancy” conservation‐planning framework commonly referenced in recovery plans. To address representation, listing and recovery standards should consider not only what proportion of its former range a species inhabits, but the types of habitats a species occupies and the ecological role it plays there. Recovery planning for formerly widely distributed species (e.g., the gray wolf [Canis lupus]) exemplifies how the geographic component implicit in the ESA's definition of endangerment should be considered in determining recovery goals through identification of ecologically significant types or niche variation within the extent of listed species, subspecies, or “distinct population segments.” By linking listing and recovery standards to niche and ecosystem concepts, the concept of ecologically significant type offers a scientific framework that promotes more coherent dialogue concerning the societal decisions surrounding recovery of endangered species.     

Are there reasons against open-ended research into solar radiation management? A model of intergenerational decision-making under uncertainty

Solar radiation management (SRM) has been proposed as a means of last resort against dangerous climate change. We propose a stylized model of intergenerational decision making on SRM research, greenhouse-gas abatement and SRM deployment, under uncertainties about (a) the extent of future climate damage and (b) effectiveness and potential harmful side-effects of SRM. Open-ended research may reveal either that SRM effectively reduces climate damage, or that it would cause more harm than benefits. We find that SRM research increases the likelihood of deployment (“slippery slope”), and derive conditions that it decreases abatement effort in expectation (“moral hazard”). Neither of these provides a rationale against SRM research, though. The rational decision is to perform SRM research, unless (i) discounting is hyperbolic and (ii) the absolute prudence of expected climate damage is smaller than absolute risk aversion. These results generalize to the case where SRM research also provides information on climate sensitivity.     

Minimax regret discounting

The paper considers an environmental policy decision in which the appropriate approach for discounting future costs and benefits is unknown. Uncertainty about the discount rate is formulated as a decision under Knightian uncertainty. To solve this, we employ minimax regret, a decision criterion that is much less conservative then the related criterion maximin—in particular, it can be shown to implement a “proportional response” in that it equally balances concern about the mistake of doing too little with that of doing too much. Despite the criterion's balanced nature, the minimax regret solution mimics a policy that maximizes the present discounted value of future net benefits with an effective (certainty-equivalent) discount rate that declines over time to the lowest possible rate. In addition to reinforcing Weitzman's (1998) original limiting result, the approach generates concrete policy advice when decision makers are unable to specify a prior over possible discount rates. We apply it to the Stern–Nordhaus discounting debate and find that the effective discount rate converges to the Stern rate in just under 200 years.     

Effect of risk aversion on prioritizing conservation projects

Conservation outcomes are uncertain. Agencies making decisions about what threat mitigation actions to take to save which species frequently face the dilemma of whether to invest in actions with high probability of success and guaranteed benefits or to choose projects with a greater risk of failure that might provide higher benefits if they succeed. The answer to this dilemma lies in the decision maker's aversion to risk—their unwillingness to accept uncertain outcomes. Little guidance exists on how risk preferences affect conservation investment priorities. Using a prioritization approach based on cost effectiveness, we compared 2 approaches: a conservative probability threshold approach that excludes investment in projects with a risk of management failure greater than a fixed level, and a variance‐discounting heuristic used in economics that explicitly accounts for risk tolerance and the probabilities of management success and failure. We applied both approaches to prioritizing projects for 700 of New Zealand's threatened species across 8303 management actions. Both decision makers’ risk tolerance and our choice of approach to dealing with risk preferences drove the prioritization solution (i.e., the species selected for management). Use of a probability threshold minimized uncertainty, but more expensive projects were selected than with variance discounting, which maximized expected benefits by selecting the management of species with higher extinction risk and higher conservation value. Explicitly incorporating risk preferences within the decision making process reduced the number of species expected to be safe from extinction because lower risk tolerance resulted in more species being excluded from management, but the approach allowed decision makers to choose a level of acceptable risk that fit with their ability to accommodate failure. We argue for transparency in risk tolerance and recommend that decision makers accept risk in an adaptive management framework to maximize benefits and avoid potential extinctions due to inefficient allocation of limited resources. El Efecto de la Aversión de Riesgo sobre la Priorización de Proyectos de Conservación     

The dilemma of pest suppression in the conservation of endangered species

In the conservation of endangered species, suppression of a population of one native species to benefit another poses challenges. Examples include predator control and nest parasite reduction. Less obvious is the control of blood-feeding arthropods. We conducted a case study of the effect of native black flies (Simulium spp.) on reintroduced Whooping Cranes (Grus americana). Our intent was to provide a science-driven approach for determining the effects of blood-feeding arthropods on endangered vertebrates and identifying optimal management actions for managers faced with competing objectives. A multiyear experiment demonstrated that black flies reduce nest success in cranes by driving incubating birds off their nests. We used a decision-analytic approach to develop creative management alternatives and evaluate trade-offs among competing objectives. We identified 4 management objectives: establish a self-sustaining crane population, improve crane well-being, maintain native black flies as functional components of the ecosystem, and minimize costs. We next identified potential management alternatives: do nothing, suppress black flies, force crane renesting to occur after the activity period of black flies, relocate releases of cranes, suppress black flies and relocate releases, or force crane renesting and relocate releases. We then developed predictions on constructed scales of 0 (worst-performing alternative) to 1 (best-performing alternative) to indicate how alternative actions performed in terms of management objectives. The optimal action depended on the relative importance of each objective to a decision maker. Only relocating releases was a dominated alternative, indicating that it was not optimal regardless of the relative importance of objectives. A rational decision maker could choose any other management alternative we considered. Recognizing that decisions involve trade-offs that must be weighed by decision makers is crucial to identifying alternatives that best balance multiple management objectives. Given uncertainty about the population dynamics of blood-feeding arthropods, an adaptive management approach could offer substantial benefits.     

"Cryptic" direct benefits of mate choice: choosy females experience reduced predation risk while in precopula

Despite the central role that female mate choice plays in the production of biological diversity, controversy remains concerning its evolution and maintenance. This is particularly true in systems where females are choosy but do not receive obvious direct benefits such as nuptial gifts that increase a female's survival and fecundity. In the absence of such direct benefits, indirect benefits (i.e., the production of superior offspring) are often invoked to explain the evolution of mate choice. However, females may receive less obvious, or "cryptic," direct benefits, particularly in species with prolonged pre-mating interactions (e.g., precopulatory mate guarding). We assessed the “cryptic” direct benefits of female choice for large male size in two species of freshwater amphipods that do not receive obvious direct benefits. Females paired with large males experienced decreased predation from fish. However, we found that the size of a female’s mate did not affect her predation risk against predatory dragonflies or the harassment she received by single males while paired. Our results demonstrate that even when females receive no traditional direct benefits, female choice for large male size can still provide important direct benefits. Such “cryptic” direct benefits may be common, especially in species with prolonged mating interactions, and are likely important for fully understanding the evolution of mate choice.     

No male agonistic experience effect on pre-copulatory mate choice in female earwigs

Mating with dominant males may confer considerable benefits, but also incur significant costs, hence intrasexual competitiveness is a likely target of mate choice. In addition to established modes of mate assessment, females may use cues or signals associated with agonistic experience effects to assess the relative competiveness of males. Experience effects, where the outcome of a fight increases the likelihood of a similar outcome in subsequent fights, may result from an animal’s altered state after conflict, but can also arise from strategic rival use of information perceived about this altered state. While females may similarly use this information in mate choice decisions, this potential consequence of male–male conflict has largely been neglected. Here, we investigate the effects of experience on subsequent agonistic performance in the earwig Euborellia brunneri by imposing winning or losing experiences on males and rematching them with naïve, size-matched rivals. We reveal a strong loser effect in subsequent fights, with nearly all previous “losers” losing against new rivals. In contrast, we found no equivalent winner effect, with previous “winners” exhibiting no increased likelihood of winning. We subsequently test whether the effects of male agonistic experience extend to pre-copulatory female mate choice. We show that females, when allowed to choose between naïve males and “winners” or “losers”, do not discriminate between males based on their recent agonistic experience. Therefore, while fighting history can play an important role in male–male interactions, females may not attend to this information.     

Rapidly assessing cobenefits to advance threat-management alliances

Conservation strategies aimed at reducing threats to biodiversity can have significant implications for multiple sectors in a socioeconomic system, but these cobenefits are often poorly understood. For example, many of the threats to native species also impede agricultural production, yet agriculture is typically perceived as in competition with conservation objectives. Although a comprehensive, multiobjective decision analysis is usually beyond the scope and capacity of conservation decision makers, failing to incorporate key socioeconomic costs and benefits into conservation decision-making processes can result in missed opportunities for diversifying outcomes and creating cost-sharing multisectoral partnerships. We devised a straightforward and readily interpretable approach to incorporate cobenefits into a threat-management prioritization approach. We used it to analyze the agricultural cobenefits of implementing 9 invasive animal management strategies designed to ensure the persistence of 148 threatened species across Australia's Lake Eyre Basin over 50 years. A structured elicitation process with 24 participants (scientists, land managers, agriculturalists, and other stakeholders) was used to collect information on each strategy, including costs, technical and social feasibility, benefits to native threatened species, and cobenefits to agricultural production systems. The costs of targeted invasive animal management to save threatened species across the basin (AU$33 million/year) outweighed the overall benefits to the agricultural industry (estimated AU$226 million/year). The return on investment for these management strategies varied substantially when agricultural cobenefits were considered alongside threatened species benefits and showed synergies and challenges. Our approach demonstrates the value of incorporating cobenefits of conservation actions into cost-effectiveness analyses to guide potential investment and partnerships and to diversify implementation pathways.     

Flexibility,learning, and irreversibility in environmental decisions: A bayesian approach

The Bayes decision is characterized and studied for a two-period decision problem involving a proposed resource development project. It is assumed that development is irreversible and that expectations about benefits and costs during the second period vary with experiences resulting from the first-period action. The amount and types of learning achieved depend upon the particular action taken during the first period. Flexible sequential decision procedures are compared with fixed once-and-for-all decisions. It is shown that under this specification, optimal development decisions are not necessarily more conservative when a sequential procedure is used. The possibility of reneging on a fixed decision is formally specified and studied.     

Green clubs

This paper treats programs in which firms voluntarily agree to meet environmental standards as “green clubs”: clubs, because they provide non-rival but excludable reputation benefits to participating firms; green, because they also generate environmental public goods. The model illuminates a central tension between the congestion externality familiar from conventional club theory and the free-riding externality familiar from the theory on private provision of public goods. We compare three common program sponsors—governments, industry, and environmental groups. We find that if monitoring of the club standard is perfect, a government constrained from regulating club size may prefer to leave sponsorship to industry if public-good benefits are sufficiently low, or to environmentalists if public-good benefits are sufficiently high. If monitoring is imperfect, an important question is whether consumers can infer that a club is too large for its standard to be credible. If they can then the government may deliberately choose an imperfect monitoring mechanism as a way of regulating club size indirectly. If they cannot then this reinforces the government's preference for delegating sponsorship.     

Time discounting and the decision to protect areas that are near and threatened or remote and cheap to acquire

Should conservation organizations focus on protecting habitats that are at imminent risk of being converted but are expensive or more remote areas that are less immediately threatened but where a large amount of land can be set aside? Variants of this trade‐off commonly arise in spatial planning. I used models of land‐use change near a deforestation frontier to examine this trade‐off. The optimal choice of where to protect was determined by how decisions taken today accounted for ecological benefits and economic costs of conservation actions that would occur sometime in the future. I used an ecological and economic discount rate to weight these benefits and costs. A large economic discount rate favored protecting more remote areas, whereas a large, positive ecological discount rate favored protecting habitat near the current deforestation frontier. The decision over where to protect was also affected by the influence economic factors had on landowners' decisions, the rate of technological change, and ecological heterogeneity of the landscape. How benefits and costs through time are accounted for warrants careful consideration when specifying conservation objectives. It may provide a niche axis along which conservation organizations differentiate themselves when competing for donor funding or other support.     

Male chimpanzees compromise the foraging success of their mates in Kibale National Park,Uganda

Sexual conflict develops when the optimal reproductive strategy for one sex inflicts fitness costs upon the other sex. Among species with intense within-group feeding competition and high costs of reproduction, females are expected to experience reduced foraging efficiency by associating with males, and this may compromise their reproductive ability. Here, we test this hypothesis in chimpanzees, a species with flexible grouping patterns in which female avoidance of large subgroups has been attributed to their relatively high costs of grouping. In an >11-year study of the Kanyawara community of East African chimpanzees (Pan troglodytes schweinfurthii) in the Kibale National Park, Uganda, the availability of sexually receptive females was a key determinant of the number of males in parties. In turn, females experienced significantly lower C-peptide of insulin levels, indicative of reduced energy balance, during periods when they associated with more males. Female associates did not produce the same negative effect. C-peptide levels positively and significantly predicted female ovarian steroid production, indicating that the costs of associating with males can lead to downstream reproductive costs. Therefore, we conclude that Kanyawara chimpanzees exhibit sexual conflict over subgroup formation, with the large groupings that allow males to compete for mating opportunities inflicting energetic and reproductive costs on females. Because association with males is central to female chimpanzees’ anti-infanticide strategy, and males may confer other benefits, we propose that reproductive success in female chimpanzees hinges on a delicate balance between the costs and benefits of associating with male conspecifics.     

Planning for ex situ conservation in the face of uncertainty

Ex situ conservation strategies for threatened species often require long‐term commitment and financial investment to achieve management objectives. We present a framework that considers the decision to adopt ex situ management for a target species as the end point of several linked decisions. We used a decision tree to intuitively represent the logical sequence of decision making. The first decision is to identify the specific management actions most likely to achieve the fundamental objectives of the recovery plan, with or without the use of ex‐situ populations. Once this decision has been made, one decides whether to establish an ex situ population, accounting for the probability of success in the initial phase of the recovery plan, for example, the probability of successful breeding in captivity. Approaching these decisions in the reverse order (attempting to establish an ex situ population before its purpose is clearly defined) can lead to a poor allocation of resources, because it may restrict the range of available decisions in the second stage. We applied our decision framework to the recovery program for the threatened spotted tree frog (Litoria spenceri) of southeastern Australia. Across a range of possible management actions, only those including ex situ management were expected to provide >50% probability of the species’ persistence, but these actions cost more than use of in situ alternatives only. The expected benefits of ex situ actions were predicted to be offset by additional uncertainty and stochasticity associated with establishing and maintaining ex situ populations. Naïvely implementing ex situ conservation strategies can lead to inefficient management. Our framework may help managers explicitly evaluate objectives, management options, and the probability of success prior to establishing a captive colony of any given species.     

Rehabilitation of degraded community lands for sustainable development in Himalaya: a case study in Garhwal Himalaya,India

SUMMARY

An approach to the rehabilitation of degraded community lands built on people's perceptions and traditional knowledge was developed, implemented on a small scale (6 ha plot), and evaluated in terms of economic and ecological costs and benefits over a period of 5 years in a mid-altitude (1200 m) village of Garhwal Himalaya. Rehabilitation comprised establishment of water harvesting tanks, organic management of soil, agroforestry (native multipurpose trees t traditional crops), and decision making by the whole village community. Costs and benefits under irrigated and unirrigated conditions were compared. The total cost of establishing the irrigated agroforestry system was 1.23 fold that of the unirrigated one, whereas the total benefit was 2.09 fold. The average standing above-ground biomass of the 4-year-old plantation in the irrigated agroforestry system was 11.69 t/ha compared to 8.34 t/ha in the unirrigated system. Improvement in soil properties was more pronounced in the irrigated system than in the unirrigated one. Nutrient input, an input derived largely from forest biomass, in the unirrigated system was nearly 3 times higher than that in the irrigated system. It is concluded that, considering the local and national/regional/global interests in an integrated manner, agroforestry incorporating water management would be a more effective option for rehabilitating degraded community lands than the afforestation currently being attempted by the government in the mid-altitudes of Indian Himalaya.     

Use of a Business Excellence Model to Improve Conservation Programs

Abstract: The current shortfall in effectiveness within conservation biology is illustrated by increasing interest in “evidence‐based conservation,” whose proponents have identified the need to benchmark conservation initiatives against actions that lead to proven positive effects. The effectiveness of conservation policies, approaches, and evaluation is under increasing scrutiny, and in these areas models of excellence used in business could prove valuable. Typically, conservation programs require years of effort and involve rigorous long‐term implementation processes. Successful balance of long‐term efforts alongside the achievement of short‐term goals is often compromised by management or budgetary constraints, a situation also common in commercial businesses. “Business excellence” is an approach many companies have used over the past 20 years to ensure continued success. Various business excellence evaluations have been promoted that include concepts that could be adapted and applied in conservation programs. We describe a conservation excellence model that shows how scientific processes and results can be aligned with financial and organizational measures of success. We applied the model to two well‐documented species conservation programs. In the first, the Po’ouli program, several aspects of improvement were identified, such as more authority for decision making in the field and better integration of habitat management and population recovery processes. The second example, the black‐footed ferret program, could have benefited from leadership effort to reduce bureaucracy and to encourage use of best‐practice species recovery approaches. The conservation excellence model enables greater clarity in goal setting, more‐effective identification of job roles within programs, better links between technical approaches and measures of biological success, and more‐effective use of resources. The model could improve evaluation of a conservation program's effectiveness and may be used to compare different programs, for example during reviews of project performance by sponsoring organizations.