The Economics of Biological Diversity Conservation

Economics is about choice. In a world where resources are finite relative to the demands that human beings make on them, choice is unavoidable. We cannot have everything. Choosing is the same as “trading off,” balancing the net gains from one course of action against an alternative action. The action of conserving biological diversity is not immune from this problem of making choices, although, as we shall see, some conservation literature appears to deny the choice, while some of it argues that the choice is there but that the tradeoff in favor of diversity destruction is unacceptable biological diversity is somehow “special.” If choice is inevitable, if we cannot retain all the diversity that there is, how should such choices be made? What should be conserved and where? Few problems in economics are more complex than making choices in the context of biodiversity and no economist would argue that the problem is resolved. Nonetheless, economics offers some insights into biodiversity conservation policy and these are worth exploring.