Format

Send to

Choose Destination
See comment in PubMed Commons below
Environ Manage. 2014 Mar;53(3):496-509. doi: 10.1007/s00267-013-0219-1. Epub 2013 Dec 25.

Optimal advanced credit releases in ecosystem service markets.

Author information

1
Department of City and Regional Planning, University of North Carolina at Chapel Hill, Chapel Hill, NC, 27599, USA, bendor@unc.edu.

Abstract

Ecosystem service markets are popular policy tools for ecosystem protection. Advanced credit releases are an important factor affecting the supply side of ecosystem markets. Under an advanced credit release policy, regulators give ecosystem suppliers a fraction of the total ecosystem credits generated by a restoration project before it is verified that the project actually achieves the required ecological thresholds. In spite of their prominent role in ecosystem markets, there is virtually no regulatory or research literature on the proper design of advanced credit release policies. Using U.S. aquatic ecosystem markets as an example, we develop a principal-agent model of the behavior of regulators and wetland/stream mitigation bankers to determine and explore the optimal degree of advance credit release. The model highlights the tension between regulators' desire to induce market participation, while at the same time ensuring that bankers successfully complete ecological restoration. Our findings suggest several simple guidelines for strengthening advanced credit release policy.

PMID:
24368497
DOI:
10.1007/s00267-013-0219-1
[Indexed for MEDLINE]
PubMed Commons home

PubMed Commons

0 comments
How to join PubMed Commons

    Supplemental Content

    Full text links

    Icon for Springer
    Loading ...
    Support Center