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Property Rights and Biodiversity
Property Rights and Biodiversity Susan S Hanna, State University Corvallis, OR, USA r 2013 Elsevier Inc. All rights reserved.
Glossary Economic rent Payment to resources in excess of costs. Ecosystem services Contributions of ecosystem components through genetics, information, and reproduction. Externality An effect – either a cost or a benefit – external to the generating activity. Free rider One who enjoys the benefit of goods or service without paying the cost. Institutions Organizational structures that shape human interactions. Prisoner’s dilemma Uncertainty about others’ behavior leading to choices that are individually rational but collectively irrational.
The Context of Property Rights Property rights define the conditions that guide and control human use of the natural environment. They establish the terms under which people use and sustain the capacity of the environment to generate a continuing flow of goods and services. Property rights are a means by which people interact with their environment and control their behavior toward one another. They embody the expectations people have about natural resources and influence the way people make resource use decisions. Property rights link humans to each other and to natural systems through these expectations and decisions (Bromley, 1991; North, 1992; Schmid, 1995).
Scope Property rights to natural resources control both use and conservation. Their scope may be individual species, genetic information contained in species, or areas of land and water in which species live. The scope of property rights also includes different types of use. At present, most systems of property rights are designed for direct uses, such as catching fish for food, but they may also include indirect uses, such as the right of the public to enjoy populations of whales or to protect endangered species like bald eagles. Property rights are almost never defined for unused species or for communities of species. The idea of using property rights for the protection of not only single species but also biodiversity and its genetic foundation is a newer and broader application of their accustomed use.
Public goods Goods and services which if supplied to one person can be supplied to additional people at no extra cost. Time horizon Time period over which future benefits and costs are considered. Tragedy of the commons Overuse of resources resulting from open access and the incomplete accounting for costs. Transactions costs Costs other than price associated with the trade of environmental goods and services: information, negotiation, decisions, and enforcement.
values that, although not well quantified, are important and well articulated as economic concepts. Resources have option values for the future as potential goods and services – for example, the future food or pharmaceutical uses of marine species. These potential uses are valued as insurance against the unknown. Resources also have quasi-option values in future uses that may exist through preservation or be lost by irreversible actions, such as the localized genetic information in subraces of salmon that are lost as habitat is destroyed. Finally, resources have existence values in their aesthetic or spiritual attributes, such as the enjoyment of watching an osprey catch a fish or the satisfaction of just knowing that ospreys are nesting nearby. Existence values can also be thought of as bequest values, in that the unused goods and services are available to be passed on to future generations. An important contributor to the option value of ecosystems is ecological resilience. Resilience is the elasticity of the ecosystem; the ability of an ecosystem to absorb perturbations and continue its essential functions (Perrings et al., 1995). Although much remains unknown about the necessary conditions for resilience, what is known is that there are keystone species that require protection and conservation to enhance both species diversity and critical ecosystem functions. The option values of direct uses of ecosystems are relatively easy to understand and measure, because they are linked to tangible goods like seafood and timber that are traded through markets. Considerable uncertainty exists, however, about the value of services or goods that are not currently used. Measuring and accounting for the option values of ecosystem services and unknown goods is difficult because there is no market in which people can express their willingness to pay for them or be compensated for their loss (Teeb, 2010).
Values If resources are used, they have value. The values of ecosystems that derive from direct uses are most easily recognized – for example, the harvest of shellfish and seaweed from intertidal marine ecosystems. Their value is expressed in markets or in the subsistence they provide. But indirect use also reflects
Encyclopedia of Biodiversity, Volume 6
People and Biodiversity Biodiversity can be viewed in a number of dimensions, including the diversity of species, the diversity of genetic material, and the diversity of functional roles in the ecosystem.
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Many of the benefits of biodiversity are public goods, in which value accrues to everyone. The issue of people and biodiversity is one of managing the direct and indirect effects of activities in ecosystems in order to maintain the diversity of genetic, species, and functional components. One challenge is how to provide appropriate incentives so that people find it in their interest to promote and maintain the public good of biodiversity. A second challenge is how the rights, rules, and responsibilities that constrain resource use can be expanded from single species or physical areas to multiple species that may be distributed over wide areas. A third challenge is how to make the transition from traditional single-species commodity production types of use to new types of use that accommodate the protection of species diversity through the maintenance of ecosystem services.
Ownership The idea of ownership is well understood for goods produced by ecosystems. Ownership is better defined for land-based resources than for marine resources but for both, the full range of property rights described in Table 1 applies. Property rights to goods from land ecosystems are usually clearly defined and range from private to public. Property rights to goods from marine ecosystems are similarly mixed and often still include open access. Property rights to goods from marine ecosystems vary from private/community/state in nearshore areas, to state property in offshore zones, to open access in international waters. The idea of owning ecosystem services, in contrast, is less familiar but is gaining in experimental application. At present, ecosystem services are either considered the property of the public or of the owner of the area in which they exist. Ecosystem services are public goods, but in neither land-based nor marine ecosystems are rights to services specifically defined. One particular ecosystem service – the genetic information embodied in species – is particularly important to the question of biodiversity. Property rights to the informational properties of resources are in only the very early stages of development and application (Swanson, 2003).
Forms of Property Rights Property rights take many forms. Differences in form derive from the scope of the rights, the type of rights owner, and the privileges and responsibilities of the rights owner. The most common categories are private, public, state, and common (Table 1). The types of property rights are ordered loosely Table 1
along a spectrum, where the owner ranges from an individual person to no one (Hanna et al., 1996).
Open Access Open access, res nullius, is the absence of property rights and has no ownership assigned. It is open to all, with resources becoming owned only at the point of capture. The absence of rights is often, but mistakenly, referred to as ‘‘common property.’’ The ‘‘tragedy of the commons’’ metaphor is a description of the outcome of open access. It describes the use of a common-pool resource from which it is too costly to exclude people from use. In the tragedy of the commons, individuals make choices about resource use based on their own private costs and benefits. And while the benefits of their actions accrue to them alone, the costs, in terms of the effect on the resource, are social costs spread among all users. Eventually and inevitably without some control over access, the failure to account for social costs locks people into behavior that leads to resource degradation and overuse (Hardin, 1968; CiriacyWantrup and Bishop, 1975).
Common Property Although the ‘‘tragedy of the commons’’ is a metaphor that is widely used, it does not really describe common property. Common property, res communes, is owned by an identified group of people who have the right to exclude nonowners, the duty to participate in decisions about use, and the responsibility to act as resource stewards. For example, nearshore fishing territories may be owned and managed by the residents of the adjoining coastal community. Community members as owners decide how many people have rights to use the resource, what kind of rights these may be, and what objectives they have for resource productivity.
State Property State property, res publicae, is owned by citizens who assign management authority and stewardship responsibility to an agency of the state. For example, U.S. fish and wildlife resources are the property of the citizens of individual states or of the country as a whole. The citizens designate the fish and wildlife agencies of individual states and the federal government to manage these resources in their name. The agencies may grant rights of use to individual users or communities of users, but the resources remain owned by the citizens at large.
A classification of pure forms of property rights
Property rights
Rights holder
Privileges
Responsibilities
Open access State property Common property Private property
None Citizens Collective Individual
Capture Designate management authority Exclude nonmembers Socially acceptable uses; control of access; transfer
None Stewardship Participation, maintenance Compliance with laws
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Private Property
Optimal Forms of Property Rights
Private property, res privatae, assigns ownership to named individuals including legal individuals, such as corporations, guaranteeing to those owners a bundle of rights about access and use. Although individuals have the greatest autonomy under private property, this form of property rights is also stinted by prohibitions against unacceptable uses, such as activities that pollute. For example, individuals may own land and the fish and wildlife on that land, but the types of use to which they can put either the land or the wildlife may be constrained by law.
Biodiversity is a public good at both national and international scales. Developing the means to protect its value is a critical challenge to property rights, and it is widely acknowledged that strengthening property rights over ecosystem goods and services is a necessary component of biodiversity protection. Some of the same conclusions that apply to property rights and the protection of single resources apply as well to multiple resources and biodiversity. The evidence of the applied property rights literature indicates that no single type of property rights can be a remedy for all needs of resource protection; the appropriate type depends on the resource management objectives and on the context. People often advocate a particular form of property rights as being best suited to manage and sustain natural resources. For example, arguments have been made for private property rights to natural resources to provide incentives for maintaining the flow of resource goods and services into the future. The idea is that private property rights would keep people from the ‘‘prisoner’s dilemma,’’ in which ignorance over the behavior of others leads to the collectively irrational outcome of resource overuse. The argument for universal private property ignores the differences in context in which they might be applied. It also disregards possibilities for cooperation and collective action that provide assurance about others’ behavior and that exist under other types of rights systems (Ostrom, 1990; Bromley, 1991; Hanna et al., 1996). In recent years counter-arguments have arisen for the superiority of collective ownership over private ownership. These arguments are often framed in the context of community-based resource management. The idea behind this argument is that collective resource ownership and management is superior in terms of providing incentives for stewardship, providing collective access to resource benefits, and fairness in resource outcomes. Disputing each of these arguments for the superiority of a single type of property right is a large body of research that has demonstrated that there is no particular form of property right that is superior in all cases. Each type of property right – with the exception of open access, which is the absence of rights – can either succeed or fail in sustaining resources. What matters is how well the property right system fits within the ecological, economic, and social context and how well the form of the right reflects the type of use. The fundamental problem for biodiversity protection is that much of the biodiversity value falls outside the realm of direct use. Direct uses are easiest to monitor and measure, control and trade. Indirect uses such as genetic information and aesthetic appreciation are less visible because their contribution is more diffuse over space and time. Because these resource values are seldom owned, bought, or sold, they are often at a competitive disadvantage in a market economy, leaving them undervalued and overused. This leads to the common approach of protecting biodiversity not through property rights but by removing them from human influence in sanctuaries, refuges, or reserves.
Property Rights over Goods The property rights listed in Table 1 have one attribute in common: they have, in practice, been applied almost exclusively to environmental goods. We think of resources as natural capital that create value through the size of standing stock and through the flow of resources from that stock. We are familiar with property rights over the stock and flow components of natural capital. For example, in marine ecosystems rights can be assigned to the resource only on capture (competitive fishing), to the standing stock itself (territories for sedentary species), or to the flow of goods from the standing stock (individual fishing quotas). These are the tangible components of ecosystems.
Property Rights over Services There are other intangible components of ecosystems that do not fall under these definitions of rights. For example, species provide services to the ecosystem and to humans through genetic information, reproduction, and contribution to critical ecosystem functions. Species and groups of species also provide additional value to humans through the genetic information they contain and the pleasure they provide. Property rights are poorly defined for ecosystem services such as genetic information. This is in spite of the fact that the idea of intellectual property rights over discoveries leading from information and ideas is a familiar one. Nations have patent and copyright systems that protect rights of ownership over goods and services that flow from the application of intellectual capital; these include designs, published works, and medicines. But the focus of intellectual property rights is on the discovery or creation that results from information, not on the information itself. The lack of systems of property rights for genetic information is a critical issue for its protection. The information stored in biodiversity could lead to discoveries and patented products, but for the potential investor, the necessary protections to encourage investment are not in place. Since rights to the use of genetic information are unspecified, incentives for its protection are also absent. Biodiversity is treated as an open access resource, with the familiar ‘‘tragedy of the commons’’ result. The coexistence of intellectual property rights and biodiversity protection has been an area of great controversy and the focus of international efforts to reconcile interests of the developing and developed states (Kothari and Anuradha, 1999).
Functions of Property Rights Property rights have several functions. They delineate the population of legitimate owners. They specify the allowable
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actions of these owners and their associated responsibilities so that expectations are consistent and enforcement of rules is possible. And by setting consistent expectations they reduce uncertainty about others’ behavior. In the larger sense, they connect the pieces of the natural system to the pieces of the human system. The basic functions of managing resources – coordinating users, enforcing rules, and adapting to changing environmental conditions – cannot be met without a system of property rights. The way that property rights function in any particular context determines whether the natural and human system will interact in compatible or conflicting ways (Hanna et al., 1996). To be compatible with long-term biodiversity protection, systems of property rights must function in a way that deals with uncertainty, externalities, transactions costs, and scale.
Uncertainty Uncertainty is endemic in natural systems. We lack knowledge about ecosystem structure and ecosystem condition. We often lack assurance about how others will behave, or we lack confidence about the future. For example, there are large gaps in basic biodiversity knowledge; about threshold levels of protection, the measurement of ecosystem function, and the definition of biodiversity goals. In marine ecosystems relatively little is known about ecosystem composition, links between species, food, and reproductive requirements, critical ecological processes, and tradeoffs among species. These uncertainties affect the performance of property rights. Uncertainty about ecosystems may limit the ability to define goals and objectives for biodiversity. Uncertainty about the behavior of others will encourage intensified use to capture as many benefits as possible while they are available. Uncertainty about the future will shorten the time horizons over which decisions are made, removing the incentive to invest in long-term protection. All of these forms of uncertainty work against the protection of biodiversity. In an uncertain environment, decision making takes place through trial and error. The uncertainty creates a natural tension between the individual and the group, and between people and ecosystems. Property rights address some, but not all, of the components of uncertainty. They define and sanction ownership, resolving the question of future access. They provide assurance about the behavior of others, because they define appropriate types of use. They do not in themselves increase knowledge about the ecosystem, although they may provide an incentive for owners of property rights to produce this information (Hanna, 1998).
as much as they can. The result is that one person’s behavior affects the amount of fish available to others over time, unless their rights are correspondingly protected. Similarly, destructive fishing practices can eventually affect the functioning of the ecosystem if rights to habitat or nonfished species are not in place. In some cases property rights may be defined but unenforceable, and the lack of enforcement then becomes equivalent to removing the right. For example, if fishing rights are expressed in terms of areas and people without rights are not excluded from those areas, their encroachment will render the right meaningless and externalities will continue. The outcome of missing or unenforceable property rights is biodiversity loss, as only some components of the ecosystem are protected, leaving others vulnerable to external effects. The idea behind using property rights to protect biodiversity is to assign claimants to the full spectrum of ecosystem components and services, so that external effects are accounted for, or ‘‘internalized.’’ If the owners of biodiversity are citizens, the state can then act in their behalf to protect biodiversity from various damages over space and time. The ability of the state to represent claims over biodiversity depends on a clear definition of the goods and services of ecosystems, an articulation of the relation between ecosystem components and ecosystem function, and an active constituency for protection (Perrings et al., 1995; Sedjo and Simpson, 1995).
Transactions Costs How well a system of property rights functions both affects and is affected by transactions costs. Transactions costs are the costs of doing business, which in the resource management context include costs of gathering information, coordinating users, organizing decision making, and enforcing rules. Some transactions costs remain fixed regardless of the type of process used to make decisions. Others vary with the way decisions are made – the amount of data collected, analyses done, and the process used to make decisions. Transactions costs are also influenced by the condition of the ecological system. As resources become depleted, a system of property rights must account for more and more externalities that increase the costs of management program design and enforcement. It is possible to create a system so costly to design or enforce that potential benefits are outweighed by the costs. This cost effect, particularly in consideration of actions to change property rights, is an important factor in the consideration of the transition to property rights for protecting biodiversity (Eggertsson, 1990; North, 1992).
Scale Externalities Another function of property rights is to resolve the problem of externalities, in which one action affects another. When property rights to resources do not exist or are incomplete, people do not take full account of the costs of their actions because there is no corresponding ‘‘owner’’ to lay counter claims. In open access fisheries, for example, people compete for resource benefits by fishing as fast as they can and catching
The functioning of property rights is also affected by the scale of the area over which they apply. There is a disconnect between the geographic scale over which species are distributed and the scale at which species habitat is owned. Property rights to goods are relatively easy to define and enforce because they are associated with geographic space and their value is embodied in the goods themselves. But property rights to services are much more elusive. For example, rights to the information
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value of species would involve several owners, even nations, over wide geographic space. For rights to resources to have meaning in terms of providing incentives for their conservation, those rights must have value to the owners. The value rests in part on their uniqueness and exclusivity. When the resource is the genetic information encoded in a plant and the plant species is distributed over a range larger than that areas encompassed by the property right, the information embodied in that plant is also available to others, leaving the rights owner without the power to exclude or to capture the potential financial value from the information. This scale mismatch limits the potential for property rights to provide the appropriate incentives for investing in conserving the genetic information. The scale question also means that biodiversity protection is often an international issue. There are global benefits to biodiversity that are unaccounted for in national systems of property rights. Species distributions are independent of national boundaries. In addition, the loss of biodiversity is often an international externality, where the impact of one nation’s actions is felt by another (UNEP, 1992; Swanson, 1995).
Evolution of Property Rights Property rights to resources tend to evolve incrementally over time in response to changes that alter the costs and benefits of particular forms. The current impetus for considering property rights for the protection of biodiversity is the scarcity resulting from declines in the number, range, and diversity of species that enhances biodiversity’s value. The evolutionary path to this point, marked by a gradual expansion of property rights over ecological goods and services, is one that has reflected the relative changes in the benefits and costs of property rights as conditions of resource use change.
Single-Species Use When resources exist in surplus to human needs, conservation actions are unnecessary and so rights, rules, and responsibilities have little meaning. In an environment of surplus, the costs of developing protective mechanisms exceed the benefits gained. As resource abundance declines, either from human pressures or natural events, the increasing scarcity raises the benefit of protection. When the benefits of protection exceed their costs, property rights in some form develop. The first controls are on how the resource is taken or how much is taken. For example, an open access, no-rules fishery becomes restricted by how people can fish – for example, by seasons or by limits on gear – and how many fish they can take. Eventually, property rights of access to the fishery are developed to restrict who can fish.
Ecosystem Use As ecosystems are further exploited they reach a point where the focus on extracting and conserving individual species erodes the functioning of the ecosystem as a whole. Exploitation of species is interconnected, the sources of impacts are
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diffuse, and effects of exploitation are system-wide. Species richness declines, community interactions are altered, and resilience erodes. It is at this point that the focus of managing human effects shifts from single species to ecosystems. This shift in focus takes place against a background of using resources for the production of goods: lumber from trees and seafood from fish. The rights, rules, and responsibilities are all directed toward this end. They are not designed to control effects on unused ecosystem components or to protect the flow of ecosystem services; the system of property rights is poorly adapted to these interactive effects. Biodiversity decline creates scarcity in the services provided by species richness and genetic information. But the same scarcity in ecosystem services that provides an incentive to create property rights also presents a difficulty to developing ecosystem-level property rights. Ecosystem management is typically proposed when exploitation levels of single species are too high and showing signs of stress. Human competition and conflict over access to individual species complicate the shift to a broader focus and cause users to challenge the legitimacy of an ecosystem approach.
Expectations About Use Property rights systems, once in place, create expectations about what is normal. They start in motion a new path of development. At each stage in the path, the condition of the resource, the definition of rights, and the expectations about those rights influence action. The further along the path the more embedded are the property rights and the more vested are people in their continuance. When faced with the necessity of expanding those rights to the protection of biodiversity, it must be done against the legacy of the path to this point. A property rights transition to the protection and conservation of biodiversity is affected by resource conditions at the intervention point. Protecting biodiversity means losing access to some of the goods and services of the ecosystem, which, under the old property rights rules, were at the disposal of the owner. Many resources have competing uses with known market values. Unknown future uses of these resources will be hard pressed to compete against known present uses.
Property Rights and Biodiversity Protection A number of emerging issues illustrate the challenges to the use of property rights to protect biodiversity. Four are particularly relevant: uncertainty, exclusivity, distribution of benefits, and the alignment of private and social goals.
Uncertainty Protecting biodiversity requires more than a set of rules and responsibilities for property rights set within institutions that accommodate the attributes of the ecosystem and the people who use it. How to design property rights and institutions for this accommodation is what is at issue. Although there is general understanding of the importance of biodiversity to the stability, function, and sustainability of ecosystems, there is
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poor understanding of specifically what to protect. For example, knowledge is generally lacking of the thresholds at which biodiversity loss irreversibly changes ecosystems. Knowledge of the role played by individual species in contributing to critical ecosystem functions is also absent. These uncertainties create a corresponding uncertainty in the objectives and design of property rights to reflect the full range of values involved (Hanna, 1998).
Exclusivity A problem with many property rights that apply to natural resources is that they do not specify claims to the full range of goods and services provided by an ecosystem. In failing to fully specify property rights claims, they fail to protect exclusive use. If property rights were defined for all components of an ecosystem, users and decision makers would take all the consequences of their actions into account. This would be the first step in making biodiversity conservation profitable. But under current systems of property rights, this is rarely the case. The history is to apply property rights to natural resources as commodities but not to the services they provide or to their existence value. The lack of full specification means that it is unclear who can claim and control rights of use.
Distribution of Benefits and Costs How benefits and costs are distributed is the core debate of natural resource policy. The same debate is at the heart of biodiversity protection. Biodiversity values have the potential to be protected through a number of different types of property right. But whatever type of right is used will create winners and losers. It is difficult to design an effective system of property rights without addressing the distributional questions as well as questions of what the objectives are, how progress toward those objectives will be measured, and the time frame over which they will be met. How to promote equitable distributions is a difficult question in all resource policy, but it is particularly so for the complex issue of biodiversity. Equity questions extend into the international arena, where the distribution of benefits between rich and poor nations is at stake. Those who receive the benefits of biodiversity protections may be distant interests, while those who incur the costs are local resource owners. Interest in protecting ecosystem services may exist among people outside a local area, but unless these interests coincide with the objectives of local owners, protection efforts are likely to be unsuccessful. Effective resource protection depends on legitimacy – on the acceptance of rules and procedures by participants. Many natural resource systems are difficult to monitor, and the possibilities for circumvention of rules are many. When people doubt the legitimacy of the system of property rights because they cannot accept its distributional outcomes, their incentives are to undermine rather than promote its evolution to a new form. Scarcity compounds the erosion of legitimacy by creating greater incentives and opportunity for rent seeking that is characteristic of resource competition.
Alignment of Private and Social Goals For property rights to bring private preferences into line with public preferences for biodiversity conservation, the tensions between private and social goals must be resolved. Individuals have private goals for productivity of ecosystems goods that may not be compatible with social goals for biological production. Property rights can be an effective mechanism to create the appropriate incentives to conserve biodiversity, but the existence of property rights is not necessarily a sufficient condition for conservation. To promote biodiversity conservation property rights must be combined with resource management objectives that are consistent with conservation. In addition, biodiversity is a public good, so it is subject to the potential for free riders to enjoy the benefits without paying the costs. Biodiversity protection must be accomplished in concert with existing rights and rules that favor direct uses of ecosystem goods. How to realign private and social incentives to conserve biodiversity is an important and to a large extent unresolved question. Most current systems of rights, because they are still unspecified for ecosystem services, favor the conversion of ecosystems into goods. Options for change include the expansion of the scope of property rights, payment of compensation to owners for conserving rather than using resources, or developing prohibitions against certain uses.
Conclusions Property rights outline the conditions under which resources can be used and the interactions of people in using them. They exist in particular contexts that are combinations of ecosystems and people. There are many forms and permutations, none of which is superior to others. What determines the effectiveness of property rights in protecting biodiversity is the extent to which they are able to perform the functions of reducing uncertainty, removing externalities, containing transactions costs, accommodating scale and reflecting biodiversity goals. Property rights evolve in response to external conditions. Scarcity is the driving force for their existence, and their contribution of benefits in excess of costs is the means of their continuance in a particular form. Despite the increasing scarcity of biodiversity, particular challenges face the evolution of systems of property rights to meet these conservation needs. To protect biodiversity, a transition must be made between current systems of rights that protect direct uses of ecosystems to expanded systems of rights that also protect indirect ecosystem services such as genetic information and aesthetic enjoyment. The application of property rights to protect biodiversity is challenged by forces that are both internal and external to ecosystems. Internally, the increasing scarcity brought on by overexploited resources means that the range of options has declined. Fewer adaptations are possible. Formidable information needs for keystone species and critical functions of ecosystems exist. Both internally and externally, forces are competing to shape the time horizon of resource management. Biodiversity protection and notions of sustainable
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use – values held by the public at large – are long-term concepts, requiring a long time horizon for management decision making. At the same time, the overexploited levels of many resources combined with uncertainty about their sustainability leads to internal pressures to shorten the time horizon and make decisions for the short run. As these external and internal pressures illustrate, the very conditions in ecosystems that require biodiversity protection are also those which are causing difficulties in its implementation. Increased knowledge of ecosystems is needed as are innovative designs for property rights that work within and across national boundaries.
See also: Biodiversity as a Commodity. Commons, Concept and Theory of. Environmental Ethics. Land-Use Issues. The Value of Biodiversity
References Bromley DW (1991) Environment and Economy: Property Rights and Public Policy. Oxford, UK: Basil Blackwell. Ciriacy-Wantrup SV and Bishop R (1975) Common property as a concept in natural resources policy. Natural Resources Journal 15: 713–728. Eggertsson T (1990) Economic Behavior and Institutions. Cambridge: Cambridge University Press.
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Hanna SS (1998) Institutions for marine ecosystems: Economic incentives and fishery management. Ecological Applications 8(1): S170–S174. Hanna S, Folke C, and Ma¨ler K-G (1996) Rights to Nature. Washington, DC: Island Press. Hardin G (1968) The tragedy of the commons. Science 162: 1243–1247. Kothari A and Anuradha RV (1999) Biodiversity and intellectual property rights: Can the two co-exist? Journal of International Wildlife and Policy 2(2): 204–223. North DC (1992) Transactions Costs, Institutions, and Economic Performance. San Francisco: Institute for Contemporary Studies. Ostrom E (1990) Governing the Commons. Cambridge: Cambridge University Press. Perrings C, Maler K-G, Folke C, Holling CS, and Jansson B-O (1995) Biodiversity Loss: Economic and Ecological Issues. Cambridge: Cambridge University Press. Schmid AA (1995) The environment and property rights issues. In: Bromley D (ed.) The Handbook of Environmental Economics, pp. 45–60. Cambridge, MA: Blackwell. Sedjo RA and Simpson RD (1995) Property rights, externalities and biodiversity. In: Swanson TM (ed.) The Economics and Ecology of Biodiversity Decline, pp. 79–88. Cambridge: Cambridge University Press. Swanson T (2003) Introduction to property rights and biodiversity conservation: Convergence or conflict? Land Economics 79(4): 457–459. Swanson T (1995) The international regulation of biodiversity decline: Optional policy and evolutionary product. In: Perrings C, Maler K-G, Folke C, Holling CS, and Jansson B-O (eds.) Biodiversity Loss: Economic and Ecological Issues, pp. 225–259. Cambridge: Cambridge University Press. TEEB. The economics of ecosystems and biodiversity: Mainstreaming the economics of nature: A synthesis of the approach, conclusions and recommendations of TEEB. United Nations Environmental Programme (2010). Available at www.teebweb.org. United Nations Environmental Programme (UNEP) Convention on biological diversity (1992).
Glossary Economic rent Payment to resources in excess of costs. Ecosystem services Contributions of ecosystem components through genetics, information, and reproduction. Externality An effect – either a cost or a benefit – external to the generating activity. Free rider One who enjoys the benefit of goods or service without paying the cost. Institutions Organizational structures that shape human interactions. Prisoner’s dilemma Uncertainty about others’ behavior leading to choices that are individually rational but collectively irrational.
The Context of Property Rights Property rights define the conditions that guide and control human use of the natural environment. They establish the terms under which people use and sustain the capacity of the environment to generate a continuing flow of goods and services. Property rights are a means by which people interact with their environment and control their behavior toward one another. They embody the expectations people have about natural resources and influence the way people make resource use decisions. Property rights link humans to each other and to natural systems through these expectations and decisions (Bromley, 1991; North, 1992; Schmid, 1995).
Scope Property rights to natural resources control both use and conservation. Their scope may be individual species, genetic information contained in species, or areas of land and water in which species live. The scope of property rights also includes different types of use. At present, most systems of property rights are designed for direct uses, such as catching fish for food, but they may also include indirect uses, such as the right of the public to enjoy populations of whales or to protect endangered species like bald eagles. Property rights are almost never defined for unused species or for communities of species. The idea of using property rights for the protection of not only single species but also biodiversity and its genetic foundation is a newer and broader application of their accustomed use.
Public goods Goods and services which if supplied to one person can be supplied to additional people at no extra cost. Time horizon Time period over which future benefits and costs are considered. Tragedy of the commons Overuse of resources resulting from open access and the incomplete accounting for costs. Transactions costs Costs other than price associated with the trade of environmental goods and services: information, negotiation, decisions, and enforcement.
values that, although not well quantified, are important and well articulated as economic concepts. Resources have option values for the future as potential goods and services – for example, the future food or pharmaceutical uses of marine species. These potential uses are valued as insurance against the unknown. Resources also have quasi-option values in future uses that may exist through preservation or be lost by irreversible actions, such as the localized genetic information in subraces of salmon that are lost as habitat is destroyed. Finally, resources have existence values in their aesthetic or spiritual attributes, such as the enjoyment of watching an osprey catch a fish or the satisfaction of just knowing that ospreys are nesting nearby. Existence values can also be thought of as bequest values, in that the unused goods and services are available to be passed on to future generations. An important contributor to the option value of ecosystems is ecological resilience. Resilience is the elasticity of the ecosystem; the ability of an ecosystem to absorb perturbations and continue its essential functions (Perrings et al., 1995). Although much remains unknown about the necessary conditions for resilience, what is known is that there are keystone species that require protection and conservation to enhance both species diversity and critical ecosystem functions. The option values of direct uses of ecosystems are relatively easy to understand and measure, because they are linked to tangible goods like seafood and timber that are traded through markets. Considerable uncertainty exists, however, about the value of services or goods that are not currently used. Measuring and accounting for the option values of ecosystem services and unknown goods is difficult because there is no market in which people can express their willingness to pay for them or be compensated for their loss (Teeb, 2010).
Values If resources are used, they have value. The values of ecosystems that derive from direct uses are most easily recognized – for example, the harvest of shellfish and seaweed from intertidal marine ecosystems. Their value is expressed in markets or in the subsistence they provide. But indirect use also reflects
Encyclopedia of Biodiversity, Volume 6
People and Biodiversity Biodiversity can be viewed in a number of dimensions, including the diversity of species, the diversity of genetic material, and the diversity of functional roles in the ecosystem.
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Many of the benefits of biodiversity are public goods, in which value accrues to everyone. The issue of people and biodiversity is one of managing the direct and indirect effects of activities in ecosystems in order to maintain the diversity of genetic, species, and functional components. One challenge is how to provide appropriate incentives so that people find it in their interest to promote and maintain the public good of biodiversity. A second challenge is how the rights, rules, and responsibilities that constrain resource use can be expanded from single species or physical areas to multiple species that may be distributed over wide areas. A third challenge is how to make the transition from traditional single-species commodity production types of use to new types of use that accommodate the protection of species diversity through the maintenance of ecosystem services.
Ownership The idea of ownership is well understood for goods produced by ecosystems. Ownership is better defined for land-based resources than for marine resources but for both, the full range of property rights described in Table 1 applies. Property rights to goods from land ecosystems are usually clearly defined and range from private to public. Property rights to goods from marine ecosystems are similarly mixed and often still include open access. Property rights to goods from marine ecosystems vary from private/community/state in nearshore areas, to state property in offshore zones, to open access in international waters. The idea of owning ecosystem services, in contrast, is less familiar but is gaining in experimental application. At present, ecosystem services are either considered the property of the public or of the owner of the area in which they exist. Ecosystem services are public goods, but in neither land-based nor marine ecosystems are rights to services specifically defined. One particular ecosystem service – the genetic information embodied in species – is particularly important to the question of biodiversity. Property rights to the informational properties of resources are in only the very early stages of development and application (Swanson, 2003).
Forms of Property Rights Property rights take many forms. Differences in form derive from the scope of the rights, the type of rights owner, and the privileges and responsibilities of the rights owner. The most common categories are private, public, state, and common (Table 1). The types of property rights are ordered loosely Table 1
along a spectrum, where the owner ranges from an individual person to no one (Hanna et al., 1996).
Open Access Open access, res nullius, is the absence of property rights and has no ownership assigned. It is open to all, with resources becoming owned only at the point of capture. The absence of rights is often, but mistakenly, referred to as ‘‘common property.’’ The ‘‘tragedy of the commons’’ metaphor is a description of the outcome of open access. It describes the use of a common-pool resource from which it is too costly to exclude people from use. In the tragedy of the commons, individuals make choices about resource use based on their own private costs and benefits. And while the benefits of their actions accrue to them alone, the costs, in terms of the effect on the resource, are social costs spread among all users. Eventually and inevitably without some control over access, the failure to account for social costs locks people into behavior that leads to resource degradation and overuse (Hardin, 1968; CiriacyWantrup and Bishop, 1975).
Common Property Although the ‘‘tragedy of the commons’’ is a metaphor that is widely used, it does not really describe common property. Common property, res communes, is owned by an identified group of people who have the right to exclude nonowners, the duty to participate in decisions about use, and the responsibility to act as resource stewards. For example, nearshore fishing territories may be owned and managed by the residents of the adjoining coastal community. Community members as owners decide how many people have rights to use the resource, what kind of rights these may be, and what objectives they have for resource productivity.
State Property State property, res publicae, is owned by citizens who assign management authority and stewardship responsibility to an agency of the state. For example, U.S. fish and wildlife resources are the property of the citizens of individual states or of the country as a whole. The citizens designate the fish and wildlife agencies of individual states and the federal government to manage these resources in their name. The agencies may grant rights of use to individual users or communities of users, but the resources remain owned by the citizens at large.
A classification of pure forms of property rights
Property rights
Rights holder
Privileges
Responsibilities
Open access State property Common property Private property
None Citizens Collective Individual
Capture Designate management authority Exclude nonmembers Socially acceptable uses; control of access; transfer
None Stewardship Participation, maintenance Compliance with laws
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Private Property
Optimal Forms of Property Rights
Private property, res privatae, assigns ownership to named individuals including legal individuals, such as corporations, guaranteeing to those owners a bundle of rights about access and use. Although individuals have the greatest autonomy under private property, this form of property rights is also stinted by prohibitions against unacceptable uses, such as activities that pollute. For example, individuals may own land and the fish and wildlife on that land, but the types of use to which they can put either the land or the wildlife may be constrained by law.
Biodiversity is a public good at both national and international scales. Developing the means to protect its value is a critical challenge to property rights, and it is widely acknowledged that strengthening property rights over ecosystem goods and services is a necessary component of biodiversity protection. Some of the same conclusions that apply to property rights and the protection of single resources apply as well to multiple resources and biodiversity. The evidence of the applied property rights literature indicates that no single type of property rights can be a remedy for all needs of resource protection; the appropriate type depends on the resource management objectives and on the context. People often advocate a particular form of property rights as being best suited to manage and sustain natural resources. For example, arguments have been made for private property rights to natural resources to provide incentives for maintaining the flow of resource goods and services into the future. The idea is that private property rights would keep people from the ‘‘prisoner’s dilemma,’’ in which ignorance over the behavior of others leads to the collectively irrational outcome of resource overuse. The argument for universal private property ignores the differences in context in which they might be applied. It also disregards possibilities for cooperation and collective action that provide assurance about others’ behavior and that exist under other types of rights systems (Ostrom, 1990; Bromley, 1991; Hanna et al., 1996). In recent years counter-arguments have arisen for the superiority of collective ownership over private ownership. These arguments are often framed in the context of community-based resource management. The idea behind this argument is that collective resource ownership and management is superior in terms of providing incentives for stewardship, providing collective access to resource benefits, and fairness in resource outcomes. Disputing each of these arguments for the superiority of a single type of property right is a large body of research that has demonstrated that there is no particular form of property right that is superior in all cases. Each type of property right – with the exception of open access, which is the absence of rights – can either succeed or fail in sustaining resources. What matters is how well the property right system fits within the ecological, economic, and social context and how well the form of the right reflects the type of use. The fundamental problem for biodiversity protection is that much of the biodiversity value falls outside the realm of direct use. Direct uses are easiest to monitor and measure, control and trade. Indirect uses such as genetic information and aesthetic appreciation are less visible because their contribution is more diffuse over space and time. Because these resource values are seldom owned, bought, or sold, they are often at a competitive disadvantage in a market economy, leaving them undervalued and overused. This leads to the common approach of protecting biodiversity not through property rights but by removing them from human influence in sanctuaries, refuges, or reserves.
Property Rights over Goods The property rights listed in Table 1 have one attribute in common: they have, in practice, been applied almost exclusively to environmental goods. We think of resources as natural capital that create value through the size of standing stock and through the flow of resources from that stock. We are familiar with property rights over the stock and flow components of natural capital. For example, in marine ecosystems rights can be assigned to the resource only on capture (competitive fishing), to the standing stock itself (territories for sedentary species), or to the flow of goods from the standing stock (individual fishing quotas). These are the tangible components of ecosystems.
Property Rights over Services There are other intangible components of ecosystems that do not fall under these definitions of rights. For example, species provide services to the ecosystem and to humans through genetic information, reproduction, and contribution to critical ecosystem functions. Species and groups of species also provide additional value to humans through the genetic information they contain and the pleasure they provide. Property rights are poorly defined for ecosystem services such as genetic information. This is in spite of the fact that the idea of intellectual property rights over discoveries leading from information and ideas is a familiar one. Nations have patent and copyright systems that protect rights of ownership over goods and services that flow from the application of intellectual capital; these include designs, published works, and medicines. But the focus of intellectual property rights is on the discovery or creation that results from information, not on the information itself. The lack of systems of property rights for genetic information is a critical issue for its protection. The information stored in biodiversity could lead to discoveries and patented products, but for the potential investor, the necessary protections to encourage investment are not in place. Since rights to the use of genetic information are unspecified, incentives for its protection are also absent. Biodiversity is treated as an open access resource, with the familiar ‘‘tragedy of the commons’’ result. The coexistence of intellectual property rights and biodiversity protection has been an area of great controversy and the focus of international efforts to reconcile interests of the developing and developed states (Kothari and Anuradha, 1999).
Functions of Property Rights Property rights have several functions. They delineate the population of legitimate owners. They specify the allowable
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actions of these owners and their associated responsibilities so that expectations are consistent and enforcement of rules is possible. And by setting consistent expectations they reduce uncertainty about others’ behavior. In the larger sense, they connect the pieces of the natural system to the pieces of the human system. The basic functions of managing resources – coordinating users, enforcing rules, and adapting to changing environmental conditions – cannot be met without a system of property rights. The way that property rights function in any particular context determines whether the natural and human system will interact in compatible or conflicting ways (Hanna et al., 1996). To be compatible with long-term biodiversity protection, systems of property rights must function in a way that deals with uncertainty, externalities, transactions costs, and scale.
Uncertainty Uncertainty is endemic in natural systems. We lack knowledge about ecosystem structure and ecosystem condition. We often lack assurance about how others will behave, or we lack confidence about the future. For example, there are large gaps in basic biodiversity knowledge; about threshold levels of protection, the measurement of ecosystem function, and the definition of biodiversity goals. In marine ecosystems relatively little is known about ecosystem composition, links between species, food, and reproductive requirements, critical ecological processes, and tradeoffs among species. These uncertainties affect the performance of property rights. Uncertainty about ecosystems may limit the ability to define goals and objectives for biodiversity. Uncertainty about the behavior of others will encourage intensified use to capture as many benefits as possible while they are available. Uncertainty about the future will shorten the time horizons over which decisions are made, removing the incentive to invest in long-term protection. All of these forms of uncertainty work against the protection of biodiversity. In an uncertain environment, decision making takes place through trial and error. The uncertainty creates a natural tension between the individual and the group, and between people and ecosystems. Property rights address some, but not all, of the components of uncertainty. They define and sanction ownership, resolving the question of future access. They provide assurance about the behavior of others, because they define appropriate types of use. They do not in themselves increase knowledge about the ecosystem, although they may provide an incentive for owners of property rights to produce this information (Hanna, 1998).
as much as they can. The result is that one person’s behavior affects the amount of fish available to others over time, unless their rights are correspondingly protected. Similarly, destructive fishing practices can eventually affect the functioning of the ecosystem if rights to habitat or nonfished species are not in place. In some cases property rights may be defined but unenforceable, and the lack of enforcement then becomes equivalent to removing the right. For example, if fishing rights are expressed in terms of areas and people without rights are not excluded from those areas, their encroachment will render the right meaningless and externalities will continue. The outcome of missing or unenforceable property rights is biodiversity loss, as only some components of the ecosystem are protected, leaving others vulnerable to external effects. The idea behind using property rights to protect biodiversity is to assign claimants to the full spectrum of ecosystem components and services, so that external effects are accounted for, or ‘‘internalized.’’ If the owners of biodiversity are citizens, the state can then act in their behalf to protect biodiversity from various damages over space and time. The ability of the state to represent claims over biodiversity depends on a clear definition of the goods and services of ecosystems, an articulation of the relation between ecosystem components and ecosystem function, and an active constituency for protection (Perrings et al., 1995; Sedjo and Simpson, 1995).
Transactions Costs How well a system of property rights functions both affects and is affected by transactions costs. Transactions costs are the costs of doing business, which in the resource management context include costs of gathering information, coordinating users, organizing decision making, and enforcing rules. Some transactions costs remain fixed regardless of the type of process used to make decisions. Others vary with the way decisions are made – the amount of data collected, analyses done, and the process used to make decisions. Transactions costs are also influenced by the condition of the ecological system. As resources become depleted, a system of property rights must account for more and more externalities that increase the costs of management program design and enforcement. It is possible to create a system so costly to design or enforce that potential benefits are outweighed by the costs. This cost effect, particularly in consideration of actions to change property rights, is an important factor in the consideration of the transition to property rights for protecting biodiversity (Eggertsson, 1990; North, 1992).
Scale Externalities Another function of property rights is to resolve the problem of externalities, in which one action affects another. When property rights to resources do not exist or are incomplete, people do not take full account of the costs of their actions because there is no corresponding ‘‘owner’’ to lay counter claims. In open access fisheries, for example, people compete for resource benefits by fishing as fast as they can and catching
The functioning of property rights is also affected by the scale of the area over which they apply. There is a disconnect between the geographic scale over which species are distributed and the scale at which species habitat is owned. Property rights to goods are relatively easy to define and enforce because they are associated with geographic space and their value is embodied in the goods themselves. But property rights to services are much more elusive. For example, rights to the information
Property Rights and Biodiversity
value of species would involve several owners, even nations, over wide geographic space. For rights to resources to have meaning in terms of providing incentives for their conservation, those rights must have value to the owners. The value rests in part on their uniqueness and exclusivity. When the resource is the genetic information encoded in a plant and the plant species is distributed over a range larger than that areas encompassed by the property right, the information embodied in that plant is also available to others, leaving the rights owner without the power to exclude or to capture the potential financial value from the information. This scale mismatch limits the potential for property rights to provide the appropriate incentives for investing in conserving the genetic information. The scale question also means that biodiversity protection is often an international issue. There are global benefits to biodiversity that are unaccounted for in national systems of property rights. Species distributions are independent of national boundaries. In addition, the loss of biodiversity is often an international externality, where the impact of one nation’s actions is felt by another (UNEP, 1992; Swanson, 1995).
Evolution of Property Rights Property rights to resources tend to evolve incrementally over time in response to changes that alter the costs and benefits of particular forms. The current impetus for considering property rights for the protection of biodiversity is the scarcity resulting from declines in the number, range, and diversity of species that enhances biodiversity’s value. The evolutionary path to this point, marked by a gradual expansion of property rights over ecological goods and services, is one that has reflected the relative changes in the benefits and costs of property rights as conditions of resource use change.
Single-Species Use When resources exist in surplus to human needs, conservation actions are unnecessary and so rights, rules, and responsibilities have little meaning. In an environment of surplus, the costs of developing protective mechanisms exceed the benefits gained. As resource abundance declines, either from human pressures or natural events, the increasing scarcity raises the benefit of protection. When the benefits of protection exceed their costs, property rights in some form develop. The first controls are on how the resource is taken or how much is taken. For example, an open access, no-rules fishery becomes restricted by how people can fish – for example, by seasons or by limits on gear – and how many fish they can take. Eventually, property rights of access to the fishery are developed to restrict who can fish.
Ecosystem Use As ecosystems are further exploited they reach a point where the focus on extracting and conserving individual species erodes the functioning of the ecosystem as a whole. Exploitation of species is interconnected, the sources of impacts are
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diffuse, and effects of exploitation are system-wide. Species richness declines, community interactions are altered, and resilience erodes. It is at this point that the focus of managing human effects shifts from single species to ecosystems. This shift in focus takes place against a background of using resources for the production of goods: lumber from trees and seafood from fish. The rights, rules, and responsibilities are all directed toward this end. They are not designed to control effects on unused ecosystem components or to protect the flow of ecosystem services; the system of property rights is poorly adapted to these interactive effects. Biodiversity decline creates scarcity in the services provided by species richness and genetic information. But the same scarcity in ecosystem services that provides an incentive to create property rights also presents a difficulty to developing ecosystem-level property rights. Ecosystem management is typically proposed when exploitation levels of single species are too high and showing signs of stress. Human competition and conflict over access to individual species complicate the shift to a broader focus and cause users to challenge the legitimacy of an ecosystem approach.
Expectations About Use Property rights systems, once in place, create expectations about what is normal. They start in motion a new path of development. At each stage in the path, the condition of the resource, the definition of rights, and the expectations about those rights influence action. The further along the path the more embedded are the property rights and the more vested are people in their continuance. When faced with the necessity of expanding those rights to the protection of biodiversity, it must be done against the legacy of the path to this point. A property rights transition to the protection and conservation of biodiversity is affected by resource conditions at the intervention point. Protecting biodiversity means losing access to some of the goods and services of the ecosystem, which, under the old property rights rules, were at the disposal of the owner. Many resources have competing uses with known market values. Unknown future uses of these resources will be hard pressed to compete against known present uses.
Property Rights and Biodiversity Protection A number of emerging issues illustrate the challenges to the use of property rights to protect biodiversity. Four are particularly relevant: uncertainty, exclusivity, distribution of benefits, and the alignment of private and social goals.
Uncertainty Protecting biodiversity requires more than a set of rules and responsibilities for property rights set within institutions that accommodate the attributes of the ecosystem and the people who use it. How to design property rights and institutions for this accommodation is what is at issue. Although there is general understanding of the importance of biodiversity to the stability, function, and sustainability of ecosystems, there is
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poor understanding of specifically what to protect. For example, knowledge is generally lacking of the thresholds at which biodiversity loss irreversibly changes ecosystems. Knowledge of the role played by individual species in contributing to critical ecosystem functions is also absent. These uncertainties create a corresponding uncertainty in the objectives and design of property rights to reflect the full range of values involved (Hanna, 1998).
Exclusivity A problem with many property rights that apply to natural resources is that they do not specify claims to the full range of goods and services provided by an ecosystem. In failing to fully specify property rights claims, they fail to protect exclusive use. If property rights were defined for all components of an ecosystem, users and decision makers would take all the consequences of their actions into account. This would be the first step in making biodiversity conservation profitable. But under current systems of property rights, this is rarely the case. The history is to apply property rights to natural resources as commodities but not to the services they provide or to their existence value. The lack of full specification means that it is unclear who can claim and control rights of use.
Distribution of Benefits and Costs How benefits and costs are distributed is the core debate of natural resource policy. The same debate is at the heart of biodiversity protection. Biodiversity values have the potential to be protected through a number of different types of property right. But whatever type of right is used will create winners and losers. It is difficult to design an effective system of property rights without addressing the distributional questions as well as questions of what the objectives are, how progress toward those objectives will be measured, and the time frame over which they will be met. How to promote equitable distributions is a difficult question in all resource policy, but it is particularly so for the complex issue of biodiversity. Equity questions extend into the international arena, where the distribution of benefits between rich and poor nations is at stake. Those who receive the benefits of biodiversity protections may be distant interests, while those who incur the costs are local resource owners. Interest in protecting ecosystem services may exist among people outside a local area, but unless these interests coincide with the objectives of local owners, protection efforts are likely to be unsuccessful. Effective resource protection depends on legitimacy – on the acceptance of rules and procedures by participants. Many natural resource systems are difficult to monitor, and the possibilities for circumvention of rules are many. When people doubt the legitimacy of the system of property rights because they cannot accept its distributional outcomes, their incentives are to undermine rather than promote its evolution to a new form. Scarcity compounds the erosion of legitimacy by creating greater incentives and opportunity for rent seeking that is characteristic of resource competition.
Alignment of Private and Social Goals For property rights to bring private preferences into line with public preferences for biodiversity conservation, the tensions between private and social goals must be resolved. Individuals have private goals for productivity of ecosystems goods that may not be compatible with social goals for biological production. Property rights can be an effective mechanism to create the appropriate incentives to conserve biodiversity, but the existence of property rights is not necessarily a sufficient condition for conservation. To promote biodiversity conservation property rights must be combined with resource management objectives that are consistent with conservation. In addition, biodiversity is a public good, so it is subject to the potential for free riders to enjoy the benefits without paying the costs. Biodiversity protection must be accomplished in concert with existing rights and rules that favor direct uses of ecosystem goods. How to realign private and social incentives to conserve biodiversity is an important and to a large extent unresolved question. Most current systems of rights, because they are still unspecified for ecosystem services, favor the conversion of ecosystems into goods. Options for change include the expansion of the scope of property rights, payment of compensation to owners for conserving rather than using resources, or developing prohibitions against certain uses.
Conclusions Property rights outline the conditions under which resources can be used and the interactions of people in using them. They exist in particular contexts that are combinations of ecosystems and people. There are many forms and permutations, none of which is superior to others. What determines the effectiveness of property rights in protecting biodiversity is the extent to which they are able to perform the functions of reducing uncertainty, removing externalities, containing transactions costs, accommodating scale and reflecting biodiversity goals. Property rights evolve in response to external conditions. Scarcity is the driving force for their existence, and their contribution of benefits in excess of costs is the means of their continuance in a particular form. Despite the increasing scarcity of biodiversity, particular challenges face the evolution of systems of property rights to meet these conservation needs. To protect biodiversity, a transition must be made between current systems of rights that protect direct uses of ecosystems to expanded systems of rights that also protect indirect ecosystem services such as genetic information and aesthetic enjoyment. The application of property rights to protect biodiversity is challenged by forces that are both internal and external to ecosystems. Internally, the increasing scarcity brought on by overexploited resources means that the range of options has declined. Fewer adaptations are possible. Formidable information needs for keystone species and critical functions of ecosystems exist. Both internally and externally, forces are competing to shape the time horizon of resource management. Biodiversity protection and notions of sustainable
Property Rights and Biodiversity
use – values held by the public at large – are long-term concepts, requiring a long time horizon for management decision making. At the same time, the overexploited levels of many resources combined with uncertainty about their sustainability leads to internal pressures to shorten the time horizon and make decisions for the short run. As these external and internal pressures illustrate, the very conditions in ecosystems that require biodiversity protection are also those which are causing difficulties in its implementation. Increased knowledge of ecosystems is needed as are innovative designs for property rights that work within and across national boundaries.
See also: Biodiversity as a Commodity. Commons, Concept and Theory of. Environmental Ethics. Land-Use Issues. The Value of Biodiversity
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