| Resource purchasing funds have become a major tool for environmental protection and resource conservation. These funds use various strategies to target resources for environmental conservation, the choice of which may lead to striking differences in environmental performance. This paper develops an analytical framework to compare the effects of alternative targeting strategies on consumer surplus, producer surplus, and environmental benefits. We demonstrate that ignoring the output price effect of purchasing funds reduces environmental gain from the purchasing fund and, in some cases, may make a purchasing fund counterproductive. A purchasing strategy that targets resources with the highest environmental benefits may be counterproductive even if the price... |
