Conservation managers designing and implementing threatened species management actions, frequently face the same dilemma: should they invest in projects that result in certain gains, or invest in projects with greater expected net benefit but higher risk of failure? This is particularly a problem when funds are limited. For example, in New Zealand, the North Island Brown Kiwi costs NZ$1 million/year to manage numerous threats such as invasive species, which represents about 3% of the NZ Government Threatened Species budget – clearly there is not enough money to save all 2800 of New Zealand’s threatened taxa. So which ones to choose?
The answer lies in the managers’ and decision-makers’ willingness to accept uncertainty in the outcomes of management – their aversion to risk. Despite the need to incorporate risk aversion into conservation decision-making, no studies have explored how different levels of managers’ aversion to the risk of management failure might affect the prioritisation of species recovery plans and their associated actions. We have a new publication in Conservation Biology that presents the first examination of the issue of manager’s risk aversion in relation to prioritisation of threatened species recovery projects:
TULLOCH, A. I.T., MALONEY, R. F., JOSEPH, L. N., BENNETT, J. R., DI FONZO, M. M.I., PROBERT, W. J.M., O’CONNOR, S. M., DENSEM, J. P. and POSSINGHAM, H. P. (2014), Effect of Risk Aversion on Prioritizing Conservation Projects. Conservation Biology. doi: 10.1111/cobi.12386
In this paper, we demonstrate a simple way to account for risk aversion explicitly within a species prioritisation process using a variance discounting heuristic from the economic literature. Using the Project Prioritisation Protocol (PPP) first demonstrated in research led by Liana Joseph, Richard Maloney and Hugh Possingham at the University of Queensland, and applying this cost-effectiveness decision-support tool to rank species recovery projects in New Zealand, we find that managers with high risk aversion will save less species than those willing to accept the risk of management failure. We also show that a variance discounting approach explicitly incorporating uncertainty and managers’ aversion to risk into the decision-making process performs better than traditional threshold approaches to risk that exclude species recovery projects with high risk but potentially high payoffs if they succeed.
Our paper demonstrates that weighing the costs and benefits of conservation decisions against their associated risk of failure in a risk analysis context allows the best decision to be made for a given level of acceptable risk. Our approach can be used by managers and decision-makers to explore how their level of risk aversion changes conservation investment priorities, which will hopefully enhance the utility, accountability and transparency of prioritisation programs in the future.