Conservation Priorities and Environmental Offsets: Markets for Florida Wetlands
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 land developers purchase offsets from long-lived producers who restore wetlands over time. We find that offsets led to substantial private gains from trade, creating $2.4 billion of net surplus from 1995–2020 relative to direct conservation. Offset trading also generated new hydrological externalities. A locally differentiated Pigouvian tax would have prevented $1.6 billion of new flood damage while preserving more than two-thirds of the private gains from trade.
Fields of Study & Subjects
Economic and Environmental Valuation
Housing Market and Economics
Environmental Conservation and Management
Publication details
- Journal / source
- American Economic Review
- Publisher
- American Economic Association
- Volume
- 116
- Issue
- 5
- Pages
- 1723–1764
- Publication date
- 30 April 2026
- Language
- EN