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Environmental derivatives, risk analysis, and conservation management


Little, LR and Parslow, J and Fay, G and Grafton, RQ and Smith, ADM and Punt, AE and Tuck, GN, Environmental derivatives, risk analysis, and conservation management, Conservation Letters, 7, (3) pp. 196-207. ISSN 1755-263X (2014) [Refereed Article]


Copyright Statement

Copyright 2013 The Authors. Licensed under Creative Commons Attribution 4.0 International (CC BY 4.0)

DOI: doi:10.1111/conl.12041


Two key challenges in conservation management are: (1) how to quantify and manage the risk that natural populations will fall below critical thresholds and (2) how to fund recovery plans should a population do so. Statistically estimated, process-based simulation models of two distinct fish populations are used to forecast the species population levels, and capture the risk of crossing a management defined trigger point. We show how to calculate the environmental derivative price, which is the amount a risk-neutral investor would require for promising a pay-out should the species abundance fall below the trigger level. The approach provides the potential for environmental derivatives to support species recovery, and a method for measuring the underlying "health" of a managed population and calculating risk-cost tradeoffs among alternative management strategies.

Item Details

Item Type:Refereed Article
Keywords:bio-economic modeling, conservation finance, environmental derivatives, environmental risk analysis, management strategy evaluation, recovery costs, restoration
Research Division:Environmental Sciences
Research Group:Environmental management
Research Field:Environmental management
Objective Division:Environmental Management
Objective Group:Other environmental management
Objective Field:Other environmental management not elsewhere classified
UTAS Author:Little, LR (Dr Richard Little)
UTAS Author:Smith, ADM (Dr Tony Smith)
UTAS Author:Tuck, GN (Dr Geoffrey Tuck)
ID Code:119573
Year Published:2014
Web of Science® Times Cited:13
Deposited By:Fisheries and Aquaculture
Deposited On:2017-08-02
Last Modified:2017-09-20
Downloads:134 View Download Statistics

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