Biodiversity and Conservation 11: 1437–1450, 2002.  2002 Kluwer Academic Publishers. Printed in the Netherlands. Conservation of biodiversity in the Arabuko Sokoke Forest, Kenya 1 2, * SAMUEL MURIITHI and WENDY KENYON 1 2 Forest Department, P .O. Box 8020, Nairobi, Kenya; Scottish Agricultural College, West Mains Road, * Edinburgh EH93JG, UK; Author for correspondence (e-mail: w.kenyon@ed.sac.ac.uk; fax: 144-131- 667-2601) Received 23 October 2000; accepted in revised form 24 August 2001 Key words: Biodiversity, Contingent valuation, Forests, Global benefits Abstract. Using an economic approach to provide a rationale for rainforest conservation has been a popular exercise in recent years. This paper uses such an approach to assess the net value of the Arabuko Sokoke Forest in Kenya. The economic benefits associated with the forest derived by local and global populations are estimated by combining evidence from existing studies and the results of a contingent valuation study carried out by the authors. These benefits are set against the cost of preserving the forest to the Kenyan Forest Department. Even when the opportunity cost of the forest land is omitted from the costs of forest preservation, and when the revenues generated from the Global Environment Facility (GEF) funded project are included, the costs of forest conservation outweigh the benefits. It is only when non-use and existence values are included (which are not realised by the Kenyan population) that the forest benefits exceed the costs. The paper concludes by arguing that, although some projects within the Arabuko Sokoke Forest have been successful in capturing some of the economic value associated with the forest, more needs to be done to design additional capture mechanisms so that a greater proportion of the global benefit of the forest can be realised by local populations and local governments. Introduction In 1991 Pearce suggested an economic approach to saving the tropical rainforest whereby monetary estimates of different ‘values’ associated with forest preservation might be estimated and shown to exceed the costs associated with rainforest preservation, thereby providing a rationale for their conservation. This type of analysis has since become popular, but one problem remains. Many of the identified benefits do not accrue to the countries that bear the cost of rainforest preservation. Although forests may maintain biodiversity, store carbon and cycle nutrients (Pearce 1991), the benefits of such activities are shared by the world population and are often not realised in terms of financial benefits to local populations. Some efforts have been made to facilitate the transfer of benefits, such as debt for nature swaps, and the transfer of funds under global institutions such as the Global Environment Facility (GEF). However, the design and implementation of capture mechanisms, alongside the measurement of economic benefits, is key if the economic approach is to provide a practical rationale for helping to preserve rainforests. This paper assesses the economic case for saving the Arabuko Sokoke Forest in