Biodiversity conservation through private initiative: the case of Earth Sanctuaries Ltd
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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.
KeywordsMarket creation Wildlife Property rights Transaction costs Earth Sanctuaries Ltd Biodiversity conservation Regulatory barriers
JEL ClassificationK32 Q15 Q25
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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