Coral reef conservation incentives and revenue sharing

Abstract

Coral reefs are at particular risk of overexploitation and extinction due to negative externalities from productive sectors such as tourism and fisheries. Increased reliance on tourism revenue means difficult trade-offs. This study proposes a community-based approach to conservation based on a bioeconomic model. We extend earlier work on exogenous reward-based conservation programs by specifying rewards contingent on the level of conservation effort. In addressing the question—whether effort-dependent revenue-sharing incentivizes local residents to engage in conservation activities—the findings indicate that what matters is the relative size of reward, the degree of reliance on coral reefs as a source of revenue, and how the stock is perceived by economic agents, that is, whether they view coral reefs as a commodity or a nuisance.