Demonstrating Biodiversity Offset Policy Outcomes Using the Classic “Trading in a Pit Market” Classroom Game

About the authors:

Joseph William Bull, PhD in Ecology, Marie Skłodowska-Curie Fellow, Department of Food and Resource Economics, Center for Macroecology, Evolution and Climate, University of Copenhagen (Denmark); jwb@ifro.ku.dk

Niels Strange, PhD in Management Planning of Forest and Nature, Professor, Department of Food and Resource Economics, Center for Macroecology, Evolution and Climate, University of Copenhagen (Denmark); nst@ifro.ku.dk

Abstract:

“Biodiversity offsetting” is a novel approach to nature conservation, through which it is intended to dissociate economic development from negative biodiversity impacts. Biodiversity offsets involve the quantification of the predicted biodiversity losses associated with a given development project, and subsequently, the provision of full ecological compensation measures elsewhere by the associated developer, e. g., habitat restoration. The objective is no net loss of biodiversity overall.

Here, we develop an offset experiment in the style of a classic economic game (‘trading in a pit market’), which can be implemented for teaching or training purposes. Our purpose was twofold: first, to illustrate to non-experts how biodiversity offsetting is supposed to work; and second, to gather a novel form of data on how offset policies might play out in practice. We ran the experiment with three different groups of students in 2016: two at the University of Copenhagen in Denmark, and one at the Swedish Agricultural University in Sweden.

The experiment provided an engaging means for teaching students about the concepts underlying biodiversity offsets. Furthermore, the trade data collected from students in running the experiment, with and without a hypothetical biodiversity offset policy in place, revealed some key principles around offsetting which have been noted in real world policy outcomes.

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