Global Habitat Protection: Limitations of Development Interventions and a Role for Conservation Performance Payments

Abstract: Conservation biologists, policy makers, and citizens have identified the protection of native ecosystems in low‐income nations as a global social objective. Among the more popular initiatives toward this objective is the use of development interventions in the peripheral areas of endangered ecosystems. Such interventions indirectly provide desirable ecosystem services by redirecting labor and capital away from activities that degrade ecosystems (e.g., agricultural intensification) and by encouraging commercial activities that supply ecosystem services as joint products (e.g., ecotourism). I examined the economics of such interventions and the available empirical evidence and concluded that development interventions are hindered by (1) the indirect and ambiguous conservation incentives that they generate, (2) the complexity of their implementation, and (3) their lack of conformity with the temporal and spatial dimensions of ecosystem conservation objectives. In contrast, paying individuals or communities directly for conservation performance may be a simpler and more effective approach. In recent years there has been widespread experimentation with contracting approaches to ecosystem conservation. Conservation contracting can (1) reduce the set of critical parameters that practitioners must affect to achieve conservation goals, (2) permit more precise targeting and more rapid adaptation over time, and (3) strengthen the links between individual well‐being, individual actions, and habitat conservation, thus creating a local stake in ecosystem protection. In situations where performance payments are unlikely to work, indirect development interventions are also unlikely to work. Thus, despite the potential barriers to developing a system of conservation contracts in low‐income nations, my analysis suggests that performance payments have the potential to improve the way in which ecosystems are conserved in these nations.