Value of Biodiversity For New Product Research Found To Offer Few Conservation Incentives

November 21, 1996

WASHINGTON, DC -- Two new studies by researchers at Resources for the Future (RFF) suggest conservation advocates may be overstating the promise of biodiversity prospecting -- the search for new products among genes found in wild organisms that may be of potential commercial value -- as a mechanism for financing the conservation of biological diversity.

Biodiversity -- the immense variety of the world's genes, species and ecosystems-- may be valuable for any number of aesthetic, ecological and spiritual uses, but its potential commercial value as a source of new industrial, agricultural and pharmaceutical products has generated a great deal of recent interest. RFF's findings provide the first compelling argument that biodiversity prospecting offers few financial incentives to preserve and maintain the habitats which sustain biodiversity.

"We are clearly not saying that biodiversity is without value, nor that conservation activities are not important," says RFF's David Simpson, co-author of both studies. "Rather, we urge that advocates of biodiversity conservation look to funding sources other than the generation of new commercial products."

Genetically-diverse natural organisms have developed elaborate chemical mechanisms to enhance growth, attract mates, capture prey, avoid predators, and resist infection. Many of these chemicals have been especially important to the pharmaceutical industry. In the United States, nearly 25 percent of prescription medicines contain active ingredients that are extracted or derived from plants. These medicines include vincristine and vinblastine, drugs used in the treatment of leukemia from the rosy periwinkle of Madagascar; taxol, a cancer-fighting drug from the bark of the Pacific yew tree; and erythromycin, a common antibiotic from tropical fungi.

Because biological materials gathered from these natural habitats could provide cures for current diseases and future needs that are not yet known, many conservationists promote biodiversity prospecting as a motivation for preserving threatened habitats. Their argument is that pharmaceutical researchers will pay for access to a threatened habitat in their search for new products. The payments received would then be dedicated to maintaining and protecting the habitat for use in ongoing biodiversity prospecting activities.

In their discussion paper "Valuation of Biodiversity for Use in New Product Research in a Model of Sequential Search," RFF's Simpson and Roger Sedjo develop a mathematical model of biodiversity prospecting applied to new product research in the pharmaceutical industry, and then introduce and develop a statistical model of optimal search intensity with simultaneous samples. They conclude that biodiversity prospecting alone provides few incentives for conservation.

"It's a diamonds-and-water paradox," says Simpson. "Some things, like water, are tremendously valuable in total, but we get little additional benefit from having a little more of it. With millions and millions of species in nature, sources of useful products must be either so common as to be redundant, or so rare as to make any discovery unlikely. In either case, the sheer numbers involved weaken the argument that biodiversity prospecting generates any appreciable economic value. If biodiversity is valuable to society, which it surely is, more realistic means need to be developed for financing its conservation."

Simpson and Stanford University's Amy Craft further investigate the value of biodiversity in their discussion paper "The Social Value of Using Biodiversity in New Pharmaceutical Product Research." Using a model of competition between differentiated products with pharmaceutical industry data from 23 countries, Simpson and Craft find that the magnitude of losses from even a catastrophic decline in biodiversity would be negligible when compared to the production of the world economy. They argue that the economic values generated by biodiversity prospecting are small relative to values arising from other uses for the land, even in many biologically-rich regions of the world.

"There may be some regions in which biodiversity prospecting could make some contributions to conservation," Simpson says. "But biodiversity prospecting just doesn't generate enough value to be an effective strategy on a large scale, or in areas in which development pressures are great."
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To speak to David Simpson about biodiversity issues, contact Michael Tebo in RFF's public affairs office at (202) 328-5019.

Resources for the Future (RFF)

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