Implementing the optimal provision of ecosystem services

Stephen Polasky, David J. Lewis, Andrew J. Plantinga, Erik Nelson

Research output: Contribution to journalArticle

72 Scopus citations

Abstract

Many ecosystem services are public goods whose provision depends on the spatial pattern of land use. The pattern of land use is often determined by the decisions of multiple private landowners. Increasing the provision of ecosystem services, though beneficial for society as a whole, may be costly to private landowners. A regulator interested in providing incentives to landowners for increased provision of ecosystem services often lacks complete information on landowners' costs. The combination of spatially dependent benefits and asymmetric cost information means that the optimal provision of ecosystem services cannot be achieved using standard regulatory or payment for ecosystem services approaches. Here we show that an auction that sets payments between landowners and the regulator for the increased value of ecosystem services with conservation provides incentives for landowners to truthfully reveal cost information, and allows the regulator to implement the optimal provision of ecosystem services, even in the case with spatially dependent benefits and asymmetric information.

Original languageEnglish (US)
Pages (from-to)6248-6253
Number of pages6
JournalProceedings of the National Academy of Sciences of the United States of America
Volume111
Issue number17
DOIs
StatePublished - Apr 29 2014

Keywords

  • Environmental economics
  • Land conservation
  • Spatial model

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