I Identifying Conservation Priorities using a Return on Investment Analysis Edward T Game, The Nature Conservancy, Brisbane, QLD, Australia r 2013 Elsevier Inc All rights reserved Glossary Benefit function (or curve) Function that describes the relationship between the expected conservation gains relative to level of investment Complementarity Extent to which a given area or action contributes to the conservation of biodiversity that is unrepresented in existing conservation areas or projects Conservation action Any activity aimed at improving conservation outcomes Conservation–investment curve Function describing the marginal change in conservation benefit with magnitude of investment Conservation prioritization Process aimed at determining how conservation resources can best be used to achieve stated objectives Convention on biological diversity International convention aimed at the conservation of biological diversity and the sustainable use of natural resources Cost-effectiveness analysis A type of cost–benefit analysis where the benefit cannot be expressed as a monetary value Decision analysis Discipline concerned with procedures for formally representing and assessing decisions in order to provide insight for decision makers What is a Return-on-Investment (ROI) Analysis? In the field of conservation, return-on-investment (commonly referred to simply as ‘‘ROI’’) has come to be a rather general term for prioritization schemes that explicitly consider the cost of the alternatives being considered These are in contrast to prioritization schemes based principally on the distribution of biodiversity (e.g., biodiversity hotspots; Myers et al., 2000) or biodiversity and threats to it (e.g., Hoekstra et al., 2005) The first published use of the term ROI referring to conservation prioritization was in 1998 (Bryant, 1998), but it was not until 2003 that the utility of ROI analysis for conservation prioritization began to explored in earnest (O’Connor et al., 2003) However, before ROI entered the popular lexicon, the phrase ‘‘getting the biggest bang for our buck’’ had been appearing in conservation publications with increasing frequency The common element of both terminologies is that the expected return or outcome from a conservation action (The term Encyclopedia of Biodiversity, Volume Decision support tools General term for systems, often computer based, that use decision-analysis procedures to provide targeted information to inform decisions Ecoregion Generally large geographic areas defined by characteristic biodiversity that is largely distinct from other ecoregions Lookup tables Tabular data structures that allow users to describe the result of combining two or more variables Used to avoid generating or using otherwise complex functions to describe the relationship between variables Marginal gain Economic concept that refers to the difference between the increase in benefit from investing in more of something relative to the cost of doing so Opportunity cost In conservation, value of alternative activities forgone at site in favor of conservation actions Restoration Process of repairing or renewing degraded habitat Return-on-investment analysis In conservation, process of comparing options in a way that explicitly considers the cost of each alternative ROI Abbreviation or shorthand for return on investment Species–area curve Relationship between area of habitat and number of species that it is expected to contain ‘‘action’’ is used here in a broad sense to include any allocation of resources aimed at improving conservation outcomes.) should be balanced against the cost of achieving that outcome In economic parlance, a return on investment is just that: the ratio of the amount of money you receive relative to the amount you need to invest in some endeavor (e.g., fund into a share portfolio or buying new equipment to improve the output of a business) The comparison between different options based on this ratio between investment and return is known as a cost–benefit analysis Conservation ROI analyses belong to a general class of economic analysis known as cost-effectiveness analysis Economists consider something to be a cost-effectiveness analysis rather than a cost–benefit analysis, when the outcome or return side of the equation is not monetized (i.e., expressed as a dollar value) This tends to be the case in conservation where our return might relate to the number of species saved or habitat protected (The exception to this might be prioritizations involving http://dx.doi.org/10.1016/B978-0-12-384719-5.00328-2 185