The Optimal Allocation of Conservation Funds

This paper presents a framework to evaluate alternative designs of conservation programs and their implications for the allocation of conservation funds. We show that the efficient allocation of conservation funds must consider two important “pooling” effects—cumulative effects and interrelationships among alternative environmental benefits. Ignoring the cumulative effects of environmental benefits may cause conservation funds to be overly dispersed geographically and, as a result, may result in minimum environmental benefits when the budget is small. Ignoring the interrelationships among alternative environmental benefits may result in not only misallocation of conservation funds among geographical areas, but also incorrect resources being targeted for conservation practices. Implications of these results for the design of conservation programs are discussed.