The Impact of Land-Use Change on Ecosystem Services,Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

Land-use change has a significant impact on the world’s ecosystems. Changes in the extent and composition of forests, grasslands, wetlands and other ecosystems have large impacts on the provision of ecosystem services, biodiversity conservation and returns to landowners. While the change in private returns to landowners due to land-use change can often be measured, changes in the supply and value of ecosystem services and the provision of biodiversity conservation have been harder to quantify. In this paper we use a spatially explicit integrated modeling tool (InVEST) to quantify the changes in ecosystem services, habitat for biodiversity, and returns to landowners from land-use change in Minnesota from 1992 to 2001. We evaluate the impact of actual land-use change and a suite of alternative land-use change scenarios. We find a lack of concordance in the ranking of baseline and alternative land-use scenarios in terms of generation of private returns to landowners and net social benefits (private returns plus ecosystem service value). Returns to landowners are highest in a scenario with large-scale agricultural expansion. This scenario, however, generated the lowest net social benefits across all scenarios considered because of large losses in stored carbon and negative impacts on water quality. Further, this scenario resulted in the largest decline in habitat quality for general terrestrial biodiversity and forest songbirds. Our results illustrate the importance of taking ecosystem services into account in land-use and land-management decision-making and linking such decisions to incentives that accurately reflect social returns.     

Bringing Ecosystem Services into the Real World: An Operational Framework for Assessing the Economic Consequences of Losing Wild Nature

Policy action to halt the global loss of biodiversity and ecosystems is hindered by the perception that it would be so costly as to compromise economic development, yet this assumption needs testing. Inspired by the recent Stern Review on the Economics of Climate Change, the leaders of the G8+5 nations commissioned a similar assessment of the economics of losing biodiversity, under the Potsdam Initiative on Biodiversity. Here, we propose a conceptual framework for such a global assessment which emphasizes several critical insights from the environmental economics and valuation literature: contrasting counterfactual scenarios which differ solely in whether they include specific conservation policies; identifying non-overlapping benefits; modeling the production, flow, use and value of benefits in a spatially-explicit way; and incorporating the likely costs as well as possible benefits of policy interventions. Tackling these challenges, we argue, will significantly enhance our ability to quantify how the loss of benefits derived from ecosystems and biodiversity compares with the costs incurred in retaining them. We also summarise a review of the current state of knowledge, in order to assess how quickly this framework could be operationalized for some key ecosystem services.     

Mapping Biodiversity Indicators and Assessing Biodiversity Values in Global Forests

Biodiversity loss is a problem of global concern affecting ecosystem functioning and services provided to humans. The Millennium Ecosystem Assessment is built on a conceptual framework that links biodiversity with the services ecosystems provide to society and human welfare. Numerous empirical studies have measured ecosystem goods and services in terms of economic values; however, less evidence is available of the indirect effect of biodiversity on these values. Based on this, we first compile market and non-market forest valuation studies and, secondly, explore the potential of an econometric modelling exercise by conducting a worldwide meta-analysis. This exercise aims to highlight the role of biodiversity indicators on valuation. In this way, we can study the underlying transmission mechanisms that explain to what extent biodiversity is related to human welfare. Furthermore, we also propose to evaluate the magnitudes of the respective distributional impacts, including the different ecosystem goods and services under consideration. Our results show that biodiversity indicators may have an underlying effect on forest ecosystem values, which also depend on the type of ecosystem services. Lastly, the results are discussed and analysed with respect to their policy implications concerning biodiversity conservation.     

Restoration of the longleaf pine ecosystem on private lands in the US South: an ecological economic analysis

The longleaf pine ecosystem is one of the most biologically diverse in North America, supporting hundreds of plant and animal species. Because of its timber and many non-timber benefits, there is strong interest among forestry professionals, conservation groups, and the public at large in restoring longleaf pine ecosystems. However, many landowners are reluctant to grow longleaf pine on their lands on a commercial basis because the economic returns from longleaf pine timber production are usually less than those of slash pine. In this study, we develop a model that determines the profitability of longleaf and slash pine timber production after consideration of carbon sequestration, habitat for the endangered red-cockaded woodpecker, and other amenity benefits. Results suggest that internalizing carbon sequestration benefits and red-cockaded woodpecker habitat benefits alone is not enough for landowners to switch from slash pine to longleaf. Additional payments of $16 to 33 per ha per year, reflecting extra amenity benefits associated with longleaf pine relative to slash pine, make longleaf production financially competitive. Incentives that reflect carbon, biodiversity, and amenity benefits associated with longleaf production may be the optimal way of restoring longleaf pine ecosystems on rural private lands in the US South.     

A dynamic approach to PES pricing and finance for interlinked ecosystem services: Watershed conservation and groundwater management

A theory of payment for ecosystem services (PES) pricing consistent with dynamic efficiency and sustainable income requires optimized shadow prices. Since ecosystem services are generally interdependent, this requires joint optimization across multiple resource stocks. We develop such a theory in the context of watershed conservation and groundwater extraction. The optimal program can be implemented with a decentralized system of ecosystem payments to private watershed landowners, financed by efficiency prices of groundwater set by a public utility. The theory is extended to cases where land is publicly owned, conservation instruments exhibit non-convexities on private land, or the size of a conservation project is exogenous. In these cases, conservation investment can be financed from benefit taxation of groundwater consumers. While volumetric conservation surcharges induce inefficient water use, a dynamic lump-sum tax finances investment without distorting incentives. Since the optimal level of conservation is generated as long as payments are correct at the margin, any surplus can be returned to consumers through appropriate block pricing. The present value gain in consumer surplus generated by the conservation-induced reduction in groundwater scarcity serves as a lower bound to the benefits of conservation without explicit measurement of other benefits such as recreation, biodiversity, and cultural values.     

The conservation against development paradigm in protected areas: Valuation of ecosystem services in the Doñana social-ecological system (southwestern Spain)

The ecosystems of the Doñana social-ecological system (southwestern Spain) provide numerous ecosystem services to society. We valued the most important ecosystem services through a market-based approach, revealed-preference and stated-preference methods to assess the conservation effectiveness of the Doñana Protected Area, with consideration of existing human activities in surrounding lands. We also analysed the spatial distribution of the ecosystem services beneficiaries and the scale of their related markets. We found a clear trade-off between the local and global market values of ecosystem services because landscape management outside of the Doñana Protected Area promotes the provision of ecosystem services associated with international markets. Our results suggest that a conservation against development model occurs in the Doñana social-ecological system, in which land use intensification takes place outside of the Protected Area borders as a result of promoting marketed ecosystem services, while biodiversity conservation is the main activity inside the Protected Area. We conclude that protected areas should be part of a larger-scale, adaptive landscape management strategy in which conservation planning should be the focal element in coordinating sectoral policies in the context of social-ecological systems.     

Ecological discounting

Which rates should we use to discount costs and benefits of different natures at different time horizons? We answer this question by considering a representative agent consuming two goods whose availability evolves over time in a stochastic way. We extend the Ramsey rule by taking into account the degree of substitutability between the two goods and of the uncertainty surrounding the economic and environmental growths. The rate at which environmental impacts should be discounted is in general different from the one at which monetary benefits should be discounted. We provide arguments in favor of an ecological discount rate smaller than the economic discount rate. In particular, we show that, under certainty and Cobb-Douglas preferences, the difference between the economic and the ecological discount rates equals the difference between the economic and the ecological growth rates. Using data about the link between biodiversity and economic development, I estimate that the rate at which changes in biodiversity should be discounted is 1.5%, whereas changes in consumption should be discounted at 3.2%.     

Demand-side factors in optimal land conservation choice

The dominant paradigm of conservation-reserve planning in economics is to optimize the provision of physical conservation benefits given a budget constraint, implicitly assuming the value of biodiversity and ecosystem function is not affected by human proximity to that natural capital. There is evidence, however, that human willingness to pay (WTP) for conservation declines with distance—a phenomenon we call “spatial value decay”. This paper begins a new strand of the conservation planning literature that takes demand-side factors – location of people in the landscape, the degree to which WTP for conservation depends on proximity – into account. We use theoretical models of linear abstract landscapes to explore the impact of demand-side factors on two facets of conservation choices: siting of a single reserve when conservation potential is greatest near a critical site, and siting of multiple reserves when fragmentation reduces physical conservation services produced. Our results show how planners should sometimes employ increased fragmentation to capture value when people's preferences are not very highly localized, and how optimal policy balances proximity to the ecologically critical site with proximity to people. In some scenarios, the payoff to using a reserve design approach that considers demand-side factors is large, but we find that spatial value decay reduces the benefits that can be gained from any conservation-planning approach.     

Trade-offs between conservation and socio-economic objectives in managing a tropical marine ecosystem

Understanding the trade-off relationships between ecological, economic and social objectives is important in designing policies to manage or restore ecosystems. Using the northern South China Sea (NSCS) as a case study, we explore the trade-offs between conservation and socio-economic objectives in managing fisheries in tropical marine ecosystems. Using a numerical optimization routine and ecosystem modelling (Ecopath with Ecosim), the study shows that current management of the NSCS is sub-optimal both in terms of conservation and economic objectives. Therefore, improvement in both conservation status and economic benefits can be achieved by reducing fishing capacity. However, the implementation of conservation plans may be hindered by the reduced number of fisheries-related jobs and the lack of alternative livelihoods. Similar trade-offs are apparent in many tropical marine ecosystems. Thus, this paper supports claims from previous studies that solving the alternative livelihood problems appears to be a priority for improving management and conservation in these ecosystems. A buy-back scheme that is funded by fishers might be effective in reducing fishing capacity. However, public funds are required if management objectives focus strongly on conservation. This might be justified by the direct or indirect benefits to society that could be provided by well-conserved ecosystems. This study highlights the conflict between maximizing conservation and social objectives, although win-win solutions between conservation and economic objectives may be possible.     

Economic prosperity, biodiversity conservation, and the environmental Kuznets curve

Many conservationists contend that economic growth and biodiversity conservation are incompatible goals. Some economists contest this viewpoint, arguing that wealthier countries have the luxury of investing more heavily in efforts to conserve biodiversity. Under this assumption, we expect a U-shaped relationship between per capita wealth and proportion of species conserved. We test this environmental Kuznets curve (EKC) using estimates of per capita income and deforestation rates (index of biodiversity threat) for 35 tropical countries. A prior analysis [Dietz, S., Adger, W.N., 2003. Economic growth, biodiversity loss and conservation effort. Journal of Environmental Management, 68:23-35] using conventional regression techniques failed to provide any support for the parabolic relationship predicted by the EKC hypothesis. Here, we introduce the use of quantile regression and spatial filtering to reanalyze this data, addressing issues of heteroskedasticity and spatial autocorrelation. We note that preliminary analysis using these methods provides some initial evidence for an EKC. However, a series of panel analyses with country-specific dummy variables eliminated or even reversed much of this support. A closer examination of conservation practices and environmental indicators within the countries, particularly those countries that drove our initial support, suggests that wealth is not a reliable indicator of improved conservation practice. Our findings indicate that an EKC for biodiversity is overly simplistic and further exploration is required to fully understand the mechanisms by which income affects biodiversity.     

Economic/ecological tradeoffs among ecosystem services and biodiversity conservation

An integrated economic/ecological model is built to address tradeoffs between biodiversity conservation and two marketable rangeland ecosystem services: cattle grazing and elk hunting. The ecology is represented by an eleven species food web in which individual optimizing plants and animals engage in competitive and predator/prey relationships. The ecological model defines a steady-state set of sustainable grazing and hunting options, and for each option, biodiversity is measured using an index defined over the eleven species. In linking the ecology to the economics, social welfare depends on grazing profits and hunter net benefits. The problem can be stated as maximizing economic welfare over two ecosystem services, subject to their sustainable use and subject to a target level of biodiversity. A numerical application with economic and biological data from the Western United States is used to determine sustainable grazing and hunting options for alternative biodiversity levels, and to select the option that maximizes welfare.     

Stability of international climate coalitions — A comparison of transfer schemes

This paper studies the impact of pragmatic and optimal transfer schemes on the incentives for regions to join international climate agreements. With an applied model that comprises twelve world regions we investigate: (i) a benchmark without transfers, (ii) scenarios with allocation-based rules where coalition members receive tradable emission permits proportional to initial or future emissions, (iii) scenarios with outcome-based rules where the coalition surplus is distributed proportional to emissions, and (iv) a scenario based on an optimal sharing rule where the coalition surplus is distributed proportional to outside option payoffs.We find that well-designed transfer schemes can stabilise larger coalitions and increase global abatement levels. In our applied setting we find that for allocation-based and outcome-based rules only small coalitions are stable, and, in the case of grandfathered emission permits, there is no stable coalition at all. Some obstacles associated with grandfathered emission permits can be overcome by incorporating the expected growth of emissions in developing countries in the distribution of emission permits. For the optimal transfer scheme we find that larger coalitions, which include key players such as the United States and China, can be stable, but no transfer scheme is capable of stabilising the Grand Coalition.     

Are There Income Effects on Global Willingness to Pay for Biodiversity Conservation?

This paper is concerned with the empirical relationship between biodiversity conservation values and income. We use random effects panel models to examine the effects of income, and then GDP per capita, on willingness to pay for habitat and biodiversity conservation. In a meta-analysis, 145 Willingness To Pay estimates for biodiversity conservation where existence value plays a major role were collected from 46 contingent valuation studies across six continents. Other effects included in the meta-analysis were the study year; habitat type; continent; scope as presented to respondents; whether WTP bids were for preventing a deterioration or gaining an improvement in conservation, whether a specific species or specific habitat was protected; whether the questionnaire used a dichotomous choice or an open-ended format; distribution format; and the choice of payment vehicle. GDP per capita seemed to perform as well as an explanatory variable as respondent’s mean stated income, indicating that it is wealth in society as a whole which determines variations in WTP. Even if large variation, our main conclusion is, that the demand for biodiversity conservation rises with a nation’s wealth, but the income elasticity of willingness to pay is less than one.     

生物多样性保护的生态补偿机制

生物多样性公共性特征的存在,决定了市场交换不能实现其经济价值,要充分发挥它的经济效益,就必须通过生态补偿机制来实现生物多样性保护外部性的内部化.本文从生态系统和物种等不同层次上对生物多样性的生态补偿机制进行探讨,分析了我国生态补偿的现状以及森林生态效益的计量评价体系,并在资源、生态、市场等方面提出了建立生态补偿机制的对策和建议.     

Measures of the effects of agricultural practices on ecosystem services

Agriculture produces more than just crops. Agricultural practices have environmental impacts that affect a wide range of ecosystem services, including water quality, pollination, nutrient cycling, soil retention, carbon sequestration, and biodiversity conservation. In turn, ecosystem services affect agricultural productivity. Understanding the contribution of various agricultural practices to the range of ecosystem services would help inform choices about the most beneficial agricultural practices. To accomplish this, however, we must overcome a big challenge in measuring the impact of alternative agricultural practices on ecosystem services and of ecosystem services on agricultural production. A framework is presented in which such indicators can be interpreted as well as the criteria for selection of indicators. The relationship between agricultural practices and land-use change and erosion impact on chemical use is also discussed. Together these ideas form the basis for identifying useful indicators for quantifying the costs and benefits of agricultural systems for the range of ecosystem services interrelated to agriculture.     

More than total economic value: How to combine economic valuation of biodiversity with ecological resilience

The assessment of total economic value has become a pragmatic and popular approach in nature valuation, yet criticisms have been raised. One major point of critique is that total economic value bases the monetary value of ecosystems purely on the flow of human benefits of services of ecosystems and consequently ignores questions of sustainable use of natural capital per se. This paper explains why total economic value by itself is in principle an inadequate concept to guide sustainable use of ecosystems and gives an overview of essential ecological theory that needs to be taken into account in addition to total economic value to fully include ecosystem sustainability. The paper concludes with a framework for combining ecological theory with economic valuation. The key elements here are theoretical ecological insights about ecosystem resilience and portfolio theory which offers an economic perspective on investment in biodiversity. Portfolio theory puts total economic value in a framework where investment in biodiversity is expanded to cover functional diversity and mobile link species in order to maintain ecosystem resilience and so fosters sustainable use of ecosystems.     

Effect of Diversity of Large Wildlife Species on Financial Benefits to Local Communities in Northwest Namibia

There exist few quantitative assessments of the relationship between biodiversity per se and economic benefits at scales that are relevant for conservation. Similarly, the merits of Community-Based Natural Resource Management programs for both wildlife and people are contested. Here, we harness two databases, on wildlife surveys and financial benefits, to address these issues for communal conservancies in northwest Namibia. We use ordination methods to characterize the diversity and stability of large wildlife assemblages on conservancies, and demonstrate that diversity (but not stability) is an important explanator of conservancy financial benefits. Our results indicate that for this area of Namibia, biodiversity, as represented by large wildlife assemblages, has an important, positive effect on the tangible financial benefits that people derive from conservation programs.     

Ecosystem Service Value and Agricultural Conversion in the Amazon: Implications for Policy Intervention

We explore the welfare implications of agricultural expansion in the Brazilian Amazon by comparing spatially explicit estimates of soybean rents and the value of ecosystem services. Although these estimates are generated from different datasets, models, and estimation techniques, the values are comparable, such that the value of ecosystem services is greater than soybean rents for about 61% of the total area and 24% of the area where soybean rents are positive if protected areas are well enforced. Based on the balance between the benefits and costs of conversion, failure to value ecosystem services reduces total social welfare by 7.13 billion dollars annually relative to an optimum. Policy instruments that internalize the value of ecosystem services via protected lands, land conversion taxes, conservation subsidies, or excise taxes can avoid much of this loss. Regardless of intervention regime, policy makers should be cognizant of the diminishing net benefits of converting natural ecosystems to agriculture. Realizing the final 3.8% requires the conversion of an additional 15% natural ecosystems to soybean production.     

Does endogenous formation of jurisdictions lead to wealth-stratification?

Conditions under which endogenous processes of jurisdiction formation entail wealth-stratification are examined in a model where unequally wealthy households with identical preferences form jurisdictions in order to produce a public good financed by proportional taxation. We define a stable jurisdiction structure to be a partition of the households into jurisdictions that is immune to individual deviations. We define a jurisdiction structure to be wealth-stratified when each jurisdiction is composed of households who form an interval with respect to the ordering of their wealth. We show that a necessary and sufficient condition for the stratification of any stable jurisdiction structure is for the individual preferences for the public and the private good to exhibit a relation of gross substitutability/complementarity between the public good and the private good that is independent from prices and wealth.     

Integrating ecosystem services into conservation assessments: A review

A call has been made for conservation planners to include ecosystem services into their assessments of conservation priority areas. The need to develop an integrated approach to meeting different conservation objectives and a shift in focus towards human wellbeing are some of the motivations behind this call. There is currently no widely accepted approach to planning for ecosystem services. This study contributes towards the development of this approach through a review of conservation assessments and the extent to which they include ecosystem services. Of the 476 conservation assessments identified by a set of search terms on the Web of Science, 100 were randomly selected for this review. Of these only seven had included ecosystem services, while another 13 had referred to ecosystem services as a rationale for conservation without including them in the assessment. The majority of assessments were based on biodiversity pattern data while 19 used data on ecological processes. A total of 11 of these 19 assessments used processes, which could be linked to services. Ecosystem services have witnessed an increase in attention received in conservation assessments since the year 2000, however trends were not apparent beyond this date. In order to assess which types of ecosystem services and how they have been accounted for in conservation assessments, we extended our review to include an additional nine conservation assessments which included ecosystem services. The majority included cultural ecosystem services, followed by regulatory, provisioning and supporting services respectively. We conclude with an analysis of the constraints and opportunities for the integration of ecosystem services into conservation assessments and highlight the urgent need for an appropriate framework for planning for ecosystem services.