Valuable habitat and low deforestation can reduce biodiversity gains from development rights markets

1. Illegal private land deforestation threatens global biodiversity, even in areas with native habitat requirements stipulated by law. Compliance can be improved by allowing landholders to meet legal reserve requirements by buying and selling the rights to have deforested land through a Tradeable Development Rights system (TDR). While this policy mechanism may prevent native habitat area loss, the spatial pattern of reserved areas will shift, creating novel landscape patterns. The resulting altered fragmentation and connectivity of habitat will impact biodiversity. TDR may also allow landholders to earn rent on land they never intended on converting, resulting in additional deforestation elsewhere and net habitat loss.
2. We construct a simulation model to explore the potential implications for biodiversity when development rights can be traded, compared with the landscape resulting from enforced individual compliance with deforestation laws.
3. We find that where future deforestation...