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Buying and selling habitats to help wildlife

October 15, 2007

Tradable permits are all the rage in environmental policy. They are already used internationally to reduce carbon emissions and improve air quality. A group of economists and ecologists from the UK, the Netherlands and Germany, are working together to find out whether such schemes could work for wildlife too. So far, it looks promising, but probably only for cultural landscapes like farmland.

The European Commission expressed an interest in using tradable permits for wildlife conservation, in a recent green paper on market instruments in environmental policy. The paper calls it habitat banking. The idea is that each region sets a target for how much land it wants to keep for wildlife conservation, then leaves it up to the free market to find the most cost-effective way of doing it. If a developer wants to destroy valuable habitat, he or she has to purchase a permit to do so, from someone who has created a piece of valuable habitat elsewhere.

In some ways, habitat banking is similar to current policies of mitigation. European law requires developers who destroy valuable habitat to recreate something equivalent elsewhere. But according to Florian Hartig, a researcher from the Helmholtz Centre for Environmental Research (UFZ) in Germany, using tradable permits is more flexible. "The current mitigation policy is very strict," he says, "Flexible instruments can help allocating mitigation where it is most effective."

With habitat banking, landowners who upgrade their land for wildlife get an immediate financial gain. And it would be possible for those with an interest in conservation to stockpile permits and not sell them, increasing the conservation value of the region perhaps even above the target.

A collaboration of European ecologists and economists is studying how such a market could work in theory. They presented their work last week at the European Science Foundation's (ESF) first EuroDIVERSITY conference. One problem you quickly see when you look from an ecological perspective is that the value of one piece of wildlife habitat partly depends on how near it is to other pieces of wildlife habitat. When a habitat is newly created, it has to be possible for new species to colonise. This problem is surmountable if you build a measure of connectivity into the ecological value of each piece of land.

Other ecologists in the audience were intrigued but sceptical. Many felt it would be difficult to give a piece of land a single ecological value. "The best sites for birds are not always the best for plants, or microbes," one argued. The researchers admit the evaluation process will be complex.

The biggest advantage of habitat banking is cheaper conservation, according to Frank Wätzold, leader of the economic part of the team, at UFZ. "Often conservation is extremely expensive when the same benefit could be gained much more cheaply elsewhere," he says. He is about to publish research showing that the conservation of the rare German hamster, Cricetus cricetus, could be achieved for much less money if it was done through agri-environment schemes rather than by restricting economic development.

Hartig says habitat banking can never replace permanent reserves. "Obviously it doesn't work for habitats that cannot recover quickly, and take hundreds of years to develop, like old-growth forests," he says. But he believes it can complement reserves, in semi-natural landscapes, where species are adaptable and move into new spaces fast.

European Science Foundation