Question

One way to reduce the loss of biodiversity (especially of the species higher in the chain—such as lions) is to reduce their demand and supply simultaneously by altering their marketability. Explain with the help of a simple market graph possible policy choices to accomplish a market based solution. Also discuss and pros and cons of relying on the market mechanism.

Answer 1

Mitigation banking is one such process which ensures real estate developers to transform biodiversity ecosystem to an asset rather than liability.

In this mechanism government regulates entirely all individuals. The ones who contribute to development are offered decent amounts while ones who violate the rules are fined. The pros are that this increases the willingness to adhere to preserve biodiversity and preserves entire ecosystem . By this way loss of biodiversity is lesser, hence supply and demand both are decreased.

The cons for this mechanism is implementation which can have various loopholes and can be violated by real estate developers and tax evasion.