Modeling Opportunity Costs of Conservation in Transitional Landscapes

Abstract:  Conservation scientists recognize the urgency of incorporating opportunity costs into conservation planning. Despite this, applications to date have been limited, perhaps partly because of the difficulty in determining costs in regions with limited data on land prices and ownership. We present methods for estimating opportunity costs of land preservation in landscapes or ecoregions that are a changing mix of agriculture and natural habitat. Our approach derives from the literature on estimating land values as opportunity costs of alternate land uses and takes advantage of general availability of necessary data, even in relatively data-poor regions. The methods integrate probabilities of habitat conversion with region-wide estimates of economic benefits from agricultural land uses and estimate land values with a discount rate to convert annual values into net present values. We applied our method in a landscape undergoing agricultural conversion in Paraguay. Our model of opportunity costs predicted an independent data set of land values and was consistent with implicit discount rates of 15–25%. Model-generated land values were strongly correlated with actual land values even after correcting for the effect of property size and proportion of property that was forested. We used the model to produce a map of opportunity costs and to estimate the costs of conserving forest within two proposed corridors in the landscape. This method can be applied to conservation planning in situations where natural habitat is currently being converted to market-oriented land uses. Incorporating not only biological attributes but also socioeconomic data can help in the design of efficient networks of protected areas that represent biodiversity at minimum costs.