Regulation versus subsidies in conservation

This article connsiders the case where a number of countries produce goods from labor, government input and natural resources. Because conservation of natural resources anywhere yields utility in all countries and there is no benevolent international government, the coordination of conservation must be delegated to a regulator that may have its own interests. This article examines what is the efficient package of tools for that regulator. It is shown that if the minimum standarsds for conservation are used, then conservation subsidies are welfare decreasing, involvig excessive conservation. This suggests that e.g. in the EU project called NATURA 2000, it is not approprieate to provide "co-financing" for sites