Recently, Laycock et al. (2009) performed a cost-effectiveness analysis (CEA) of 39 out of 380 UK Species Action Plans, finding no correlation between the cost of a program and its effectiveness. The authors advocate the use of CEA to guide funding allocations and argue that their results show that the UK Biodiversity Action Plan could be improved by reallocating funds from Plans with low cost effectiveness (generally those conserving vertebrates), to those with higher cost effectiveness (usually conserving invertebrates). I believe the authors are right to argue for more rigorous program evaluation and it is an interesting finding of their paper that data on cost and outcome are available for less than 15% of Plans. However, as a measure of cost-effectiveness their study is flawed and their recommendations for the redistribution of funding are not supported, and cannot ever be supported by a CEA of the type they describe. The authors make strong claims for CEA: “To … determine the most efficient allocation of resources, an approach that combines an ecological measure of programme output with an economic measure of programme input (costs) is required”. Specifically, they argue for CEA rather than Cost-Benefit Analysis (CBA, where inputs and outputs are measured in a common monetary metric) on the grounds that valuations of conservation outputs are extremely difficult. I agree that valuations of conservation are problematic, but strongly dispute their contention that CEA offers a solution. CEA is less demanding than CBA precisely because it lacks a way of comparing the relative value to society of heterogeneous ecological outputs, such as increases in the population of otters and weevils. It is this deficit of CEA which renders it inappropriate for determining the allocation of resources. Knowing that we can improve the status of weevils 500 times more cheaply than that of otters is of no help unless we make some judgment as to how much we value otters relative to weevils. The authors note that CEA is widely used in health economics, but rarely in conservation. The reason for this is surely that CEAs of health interventions use a common metric of effectiveness (the Quality Adjusted Life Year) which is both socially constructed and economically valued, meaning that the outputs of diverse health interventions can be compared directly. This is not the case in conservation, because of the very difficulties to which the authors refer when rejecting CBA. A second problem with CEA as carried out by the authors is that it uses gross rather than net costs, which is legitimate only if the program has no significant non-focal benefits. This may normally be true of medical interventions, but is unlikely to be true of many biodiversity programs. For example, habitat restoration may generate non-biodiversity benefits e.g. carbon sequestration or reduced flooding risk. If these benefits are significant, then they must be deducted from costs before CEA provides any useful guide to funding allocations. Of course, valuing these non-biodiversity benefits may be nearly as difficult as valuing the increase in a weevil’s population, highlighting once again the fallacy of advocating CEA as an alternative to CBA. To an economist, perhaps the most parsimonious way to view this data is as evidence of revealed preference. More effort is allocated to some species than others, signalling societal preferences for those species. The authors believe that CEA (where species are valued arbitrarily by experts and non-biodiversity benefits are not deducted from costs) can improve the allocation of conservation resources, compared to the current system where democratically elected governments, member-funded NGOs and individual conservation volunteers decide where to allocate their resources according to their own values. Such a contention seems to me rather hubristic and is certainly unsubstantiated.</P>
Biological Conservation – Elsevier
Published: Apr 1, 2010
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