Will Rafey (Wednesday, 3/20/2024)

University of California, Los Angeles


“Conservation Priorities and Environmental Offsets: Markets for Florida Wetlands”

Time: 12:10pm-1:30pm

Location: 241 Giannini (please bring your own lunch)

Paper co-authored with: Daniel Aronof (Massachusetts Institute of Technology)

Abstract: We introduce an empirical framework for valuing markets in environmental offsets. Using newly-collected data on wetland conservation and offsets, we apply this framework to evaluate a set of decentralized markets in Florida, where and developers purchase offsets from long-lived producers who restore wetlands over time. We find that offsets led to substantial private gains from trade, creating $2.2 billion of net surplus from 1995–2018 relative to direct conservation. Offset trading also generated new hydrological externalities. A locally differentiated Pigouvian tax would have prevented $1.3 billion of new flood damage while preserving more than two-thirds of the private gains from trade.