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Biodiversity conservation through private initiative: the case of Earth Sanctuaries Ltd

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European Journal of Law and Economics Aims and scope Submit manuscript

If I had 1 % of their (all of Australia’s government wildlife agencies’) budget, I could save Australia’s wildlife.

(J. Wamsley, 1996 quoted by Woodford 1996).

Abstract

The article adds empirical content to transaction costs concepts by analyzing the design and implementation of the first publicly listed company in Australia, Earth Sanctuaries Limited, devoted to protecting biodiversity. The venture was successful on some ecological criteria, but ultimately failed financially. This case study looks at the regulatory, legal and institutional arrangements that impeded its success. It shows how public sector activities can inadvertently restrict and crowd out private sector activities, and demonstrates the importance of reducing unnecessarily high transactions costs to facilitate private sector success in biodiversity conservation. It also develops a new argument related to status reversal to explain resistance to institutional change. It illustrates how private sector conservation initiatives may complement, and sometimes even substitute for, conservation activities by the public sector, thus allowing the public sector to focus its attention and resources on other purposes.

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Notes

  1. Multiple sources of case evidence were gathered and analyzed, e.g., reports by various institutions such as the Productivity Commission, academic papers, websites of key organizations, internal documents, interview transcripts, and the popular and technical press. These documents describe the history of ESL operations. Additionally, we did some interviews with key respondents who were actively involved in the process. These interviews make clear some strategies and key issues of contention. Of course, the views expressed do not implicate the interviewed individuals. Any error or misinterpretation is the sole responsibility of the authors.

  2. Vollery (2002) reports that ‘a total of some 80 different sanctuaries were ultimately envisaged’.

  3. It is well-known in the entrepreneurship literature that entrepreneurs frequently exhibit more overconfidence than non-entrepreneurs, especially if they are founder-managers (Forbes 2005). We believe that this overconfidence bias can push entrepreneurs to be overoptimistic regarding their ability to influence the rules of the game in a sense favorable to their interests.

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Acknowledgments

We are grateful for the helpful comments of Douadia Bougherara, Neil Byron, Christophe Déprés, Laura McCann and Naoufel Mzoughi, and for research support from Julien Leyre and Amanda Ellery. We are also indebted to an anonymous referee and the editor of EJLE for suggestions which helped add greater clarity to the final paper. Gilles Grolleau acknowledges support from the French research program GESSOL, sponsored by the Ministère de l'Ecologie, du Développement durable, des Transports et du Logement and the Agence de l'Environnement et de la Maîtrise de l'Energie. Any errors or omissions in this work are wholly the responsibility of the authors.

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Authors and Affiliations

  1. SupAgro, Montpellier Cedex 1, France

    Gilles Grolleau

  2. LAMETA, UMR 1135, Montpellier Cedex 1, France

    Gilles Grolleau

  3. Victorian Department of Primary Industries, Melbourne, Australia

    Deborah Peterson

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  1. Gilles Grolleau
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  2. Deborah Peterson
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Correspondence to Gilles Grolleau.

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Grolleau, G., Peterson, D. Biodiversity conservation through private initiative: the case of Earth Sanctuaries Ltd. Eur J Law Econ 40, 293–312 (2015). https://doi.org/10.1007/s10657-012-9354-z

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