Conservation contracts for forest biodiversity: Theory and experience from Finland

Abstract

We examined the Finnish biodiversity conservation pilot project, called Trading in Natural Values (TNV), using a simulated biodiversity auction model. We found, first, that the share of the most valuable old stands in the key ecological forest habitats was higher in the actual TNV program than in a simulated auction. Second, the actual bids in the TNV program were on average €400-1,200 lower per ha than the bids generated by the auction model. These findings indicate the presence of strong conservation motives among the Finnish landowners. Third, because the number of stands with high biodiversity values is limited in the study area and conservation costs are high for these stands, increasing the size of the conservation budget enrolls more stands in the program but with lower biodiversity values.