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Australian Agricultural and Resource Economics Society >
2008 Conference (52nd), February 5-8, 2008, Canberra, Australia >
Please use this identifier to cite or link to this item:
http://purl.umn.edu/6041
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| Title: | Using Environmental Offsets in Wetlands Management |
| Authors: | Duncan, Roderick
Morrison, Mark |
| Authors (Email): | Duncan, Rod (rduncan@csu.edu.au) |
| Keywords: | offsets
market-based instruments
efficiency
distribution |
| Issue Date: | 2008 |
| Series/Report no.: | Conference Paper |
| Abstract: | Environmental offsets have been proposed as a technique for managing the environmental impacts of new
developments in regions that are not in compliance with environmental standards. By requiring developers
to 'offset' any impacts by purchasing 'environmental credits', environmental quality can be maintained or
even improved. Environmental offsets have a lot of intuitive appeal, and are being used widely in the USA,
Australia and other countries. However there is at present no robust theoretical framework for analyzing the
use of offsets, which has led to some of the weaknesses of existing programs and criticisms against the use of
offsets. We present an economic model for designing offset programs that is based on identifying and
valuing environmental service flows. We also discuss a number of factors that influence the effectiveness
efficiency of offset programs including fungibility, effects on incentives of landholders and uncertainty and
make recommendations about how to respond to these factors based on our model. The distributional effects
of offsets are also explored and it is noted that offsets are not distributionally neutral. We argue on the basis
of distributional effects that it is not appropriate to use offsets alone to seek to improve environmental
quality. Furthermore, we recommend the combining of offsets with other market-based instruments such as
Pigouvian taxes or cap and trade systems in order to reduce the negative distributional effects of offset
programs, provide greater scope for achieving environmental improvements and to increase the probability of
achieving first best (socially optimal) solutions. |
| URI: | http://purl.umn.edu/6041 |
| Institution/Association: | Australian Agricultural and Resource Economics Society - 2008>2008 Conference (52nd), February 5-8, 2008, Canberra, Australia |
| Total Pages: | 23 |
| Collections: | 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia
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| cp08du01.pdf | | 134Kb | PDF | View/Open |
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