Florian Hartig

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EcoTRADE – A multi-player network game of a tradable permit market for biodiversity credits

Florian Hartig, Martin Horn & Martin Drechsler

Environmental Modelling & Software, 25(11), 1479–1480 (2010)
Cite this
@article{hartig2010ecotrade,
  author = {Florian Hartig and Martin Horn and Martin Drechsler},
  title = {EcoTRADE – A multi-player network game of a tradable permit market for biodiversity credits},
  journal = {Environmental Modelling \& Software},
  volume = {25},
  number = {11},
  pages = {1479--1480},
  year = {2010},
  doi = {10.1016/j.envsoft.2009.01.003},
}

DOI: 10.1016/j.envsoft.2009.01.003
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Abstract

EcoTRADE is a multi-player network game of a virtual biodiversity credit market. Each player controls the land use of a certain amount of parcels on a virtual landscape. The biodiversity credits of a particular parcel depend on neighboring parcels, which may be owned by other players. The game can be used to study the strategies of players in experiments or classroom games and as a communication tool for stakeholders participating in credit markets that include spatially interdependent credits.

What the paper shows and why it matters

(AI-generated)

Tradable permits are an economic instrument for controlling the use of environmental resources: rights to use are traded. Carbon emissions trading is one example; similar schemes, called biobanking or biodiversity credit trading, had also come into use to restrict land use and maintain natural habitats (Wissel and Wätzold 2010). Unlike carbon emissions, however, biodiversity credits (tradable units of habitat conservation) cannot be issued independently of location. Species depend on the connectedness of their habitat, so conserving a site is worth more near other conserved sites, and credits should be issued accordingly (Drechsler and Wätzold 2009). The problem the paper takes on is that such spatially interdependent credits make landowners influence each other’s payoffs (Hartig and Drechsler 2010), which leaves open how participants behave and how the difficulty can be conveyed to stakeholders.

EcoTRADE is a networked multiplayer game in which players trade biodiversity credits whose amount depends on how neighbouring parcels, possibly owned by other players, are used, which makes the problem of spatially interdependent credits tangible. Each player starts with land and a conservation obligation and sets each parcel to conservation or agriculture. A player who falls short of the obligation must buy credits from others; a surplus can be sold. The aim is to maximise profit from farming and credit sales. The paper reports use in several workshops, with participants ranging from children aged 10 to 15 to ecology and economics students and scientists in conservation and resource economics. According to the authors, the game proved useful for observing typical player behaviour and strategies and for communicating the problems of spatially interdependent credits. This experience is described informally, without data.

The paper poses questions that such credit markets raise: whether landowners coordinate or cooperate to raise profits, whether they find the land configurations that pay best, and whether they consider it unfair that others influence their payoffs. The authors hope the game will be used for classroom games, stakeholder workshops and experimental economics. The paper itself makes no claim about how real credit markets perform; its contribution is the game itself, first available in 2008, with documentation and an online applet offered at the time of publication.

References

  • Wissel & Wätzold (2010). A Conceptual Analysis of the Application of Tradable Permits to Biodiversity Conservation. Conservation Biology 24, 404–411. doi:10.1111/j.1523-1739.2009.01444.x
  • Drechsler & Wätzold (2009). Applying tradable permits to biodiversity conservation: Effects of space-dependent conservation benefits and cost heterogeneity on habitat allocation. Ecological Economics 68, 1083–1092. doi:10.1016/j.ecolecon.2008.07.019
  • Hartig & Drechsler (2010). Stay by thy neighbor? Social organization determines the efficiency of biodiversity markets with spatial incentives. Ecological Complexity 7, 91–99. doi:10.1016/j.ecocom.2009.07.001