Synthesis day 1: What do we know – what do
we still need to learn?
CSIRO Ecosystem Sciences
Context dependence Vs robustness across
settings
• One good trader makes the market – one bad player
ruins the game.
o Some tender elements are markets – some are games!
• Debate around context influence – what is it from:
o
o
o
o
Objective – type of action, target etc?
Interaction of desired actions with agents (individuals)?
Caused by differences in mechanism design with others?
Interaction with other institutions?
Designing better biodiversity offset schemes. 25th November 2010
Costing, Pricing and decision rules
• Quite a bit of experimental action …
o But not always clear what it tells us on pricing / decision rules.
o Surprisingly little on endowment differences in conservation
tenders.
• Variation in practice too:
o Uniform in some – most use discriminatory … is this an equity or
an efficiency issue (or depends on context?)
o Single iteration before bid fixed – multiple iterations before price
fixed
 Known Vs unknown number of rounds?
• How do we test auction efficiency – what is an
appropriate baseline?
o Are private benefits confounding some evaluations?
o How do we work out additionality in these settings?
Designing better biodiversity offset schemes. 25th November 2010
Compliance and crowding out
• Compliance and privacy
o Differences across countries … is Wyoming an outlier?
o Or is there a balance that is acceptable (has EU gone too
far with cross compliance?)
• Crowding out
o Commonly raised … and in the literature … but
o Is this really an issue in the field?
o Has / can it be easily tested?
Designing better biodiversity offset schemes. 25th November 2010
Other issues
• TCs again: Context specificity → design specificity
→ high upfront costs?
• Interaction with other programs/institutions:
o
o
o
o
Interaction of other schemes (past, concurrent) with bids
Some discussion of compatibility ...
Institutional conditions to drive implementation (or not).
What about interaction on participation decisions, compliance
etc?
 Eg Cross compliance in EU …
• Equity / fairness
o Clearly a concern …
o But the actual nature of the concern varies … participation, antifree riding, poor/vulnerable
 Equal treatment Vs fair treatment.
Designing better biodiversity offset schemes. 25th November 2010
Transaction costs – who bears
•Entry costs - who bears information provision costs?
o Costa Rica / carbon – high costs of baseline information and or
meeting certification requirements.
o Developed countries – usually bourn by auction proponent (eg.
Australia a bid package provided after site visit at buyers
expense).
•Options – what do they mean for :
o Entry: seller provides Vs buyer incurs
o Bidding: seller will expect to recoup through bid
o Monitoring: in developed bourn by buyer … but should they be
… for example add a monitoring cost to the bid before
evaluation.
• Interaction with other market failures etc.?
Prospects?
• Is the Australian story dominant … are conservation
tenders only a special case in the longer term? Why?
• Is efficiency enough to drive adoption …
o or is it only of interest to economists … are other
supporting benefits needed to drive adoption (Eg choice)?
• Do new policy ideas always ebb and flow on their way to
adoption?
o Or will politics, institutions, other issues overwhelm?
• Do prospects differ between developing and developed
countries?
• Role of experiments in implementation …
o Should we: 1) experiment; 2) pilot; 3) standardize?
Designing better biodiversity offset schemes. 25th November 2010
Stuart Whitten
Ph:
+61 2 6246 4359
Email: stuart.whitten@csiro.au