Wildlife conservation payments to address habitat fragmentation and disease risks

We develop a bioeconomic model to gain insight into the challenges of Payments for Environmental Services (PES) as applied to protect endangered species given wildlife-livestock disease risks and habitat fragmentation. We show how greater connectivity of habitat creates an endogenous trade-off. More connectedness both (i) ups the chance that populations of endangered species will grow more rapidly, while (ii) simultaneously increasing the likelihood diseases will spread more quickly. We examine subsidies for habitat connectedness, livestock vaccination, and reduced movement of infected livestock. We find the cost-effective policy is to first subsidize habitat connectivity rather than vaccinations - this serves to increase habitat contiguousness. Once habitat is sufficiently connected, disease risks increase to a level to make disease-related subsidies worthwhile. Highly connected habitat requires nearly all the government budget be devoted to disease prevention and control. The result of the conservation payments is significantly increased wildlife abundance, increased livestock health and abundance, and increased development opportunities.