Quantification of interdependencies between economic systems and ecosystem services: An input-output model applied to the Seine estuary

The aim of this paper is to assess the possible contribution of an input-output model towards two of the basic principles of the sustainability strategy of integrated coastal zone management (ICZM) and Post-Normal Science. According to these principles, decision-support tools should offer a holistic perspective and handle high uncertainty. The difficulties in reaching sustainability are due partly to the prevailing use of “narrow-system-boundary” tools that are non-holistic. Consequently, they fail to capture important ecosystem services and ignore interdependencies between them. To comply with the basic principles, our method allows environmental assets to be evaluated in multiple units and integrates results from recent researches in natural sciences. Both enable coverage of interdependencies between ecosystem services. Thereby, we enlarge input-output modelling from the two conventional ecosystem services of sink and provisioning to the most vital ones: the supporting services. An application to the Seine estuary addresses the impacts of maritime transportation infrastructures on nursery habitats for commercial fish. The ecosystem services covered are life support and resource provisioning. Our results show that the restoration of a total of 73.7 km² of nursery areas over the period 2004-2015 would result in a stock of sole in 2015 that exceeds the “business as usual” scenario by 44.2% (uncertainty range: 35.9%-69.9%). In spite of high restoration costs, the negative macro-economic impact is very low. However, on the sector level, a trade-off results between nurseries and three economic sectors. The quantification of such trade-offs in our model is particularly useful to public participation in decision-making.     

Pricing the ecosystem and taxing ecosystem services: A general equilibrium approach

In an integrated dynamic general equilibrium model of the economy and the ecosystem humans and other species compete for land and prey biomass. Each submodel exhibits a price-driven competitive allocation mechanism, and the endogenously determined habitat is either openly accessible or privately owned. In both scenarios specific corrective taxes or subsidies are needed to internalize ecosystem externalities. An open access habitat causes additional inefficiencies through diverging prices for biomass and land in both subsystems. Values of all ecosystem components are determined in an efficient steady state clarifying the role and the interplay of ecosystem prices and economic prices.     

Efficient ecosystem services and naturalness in an ecological/economic model

In an integrated economic/ecological model, the economy benefits from ecosystem services that include: (1) the consumptive use of a harvested species, (2) the non-consumptive use of popular species, and (3) naturalness, i.e., the divergence of the ecosystem’s biodiversity from its natural steady state. The biological component of the model, which is applied to a nine-species Alaskan marine ecosystem, relies on individual optimizing behaviour by plants and animals to establish population dynamics. The biological component is used to define naturalness. By varying harvesting we arrive at different steady-state populations and humans choose from among these steady states. Welfare maximizing levels of the ecosystem services are derived, then it is shown that in the laissez-faire economy overharvesting occurs when the harvesting industry ignores ecosystem services (2) and (3). Lastly, we introduce efficiency restoring taxes and standards that internalize the ecosystem externalities.

An assessment of market-based approaches to providing ecosystem services on agricultural lands

Market-based approaches are increasingly being advocated as tools for achieving the conservation of ecosystem services. We examine the reasons why markets so far appear to have failed to provide an efficient allocation of many ecosystem services, and identify the conditions under which markets deliver efficient resource allocation. We discuss different forms of market-based approaches to ecosystem services and identify the characteristics of services that make them better suited to one or another of these approaches. We find that lack of low-cost measurability and valuation currently precludes efficient allocation of many ecosystem services through market-based approaches. Still, some forms of market-based approaches hold promise for cost-effectively managing some ecosystem services provided by and to agricultural lands. In many cases some form of well-designed government involvement will be required to seek outcomes that protect the public interest.     

An economic framework for forecasting land-use and ecosystem change

This paper develops a joint econometric–simulation framework to forecast detailed empirical distributions of the spatial pattern of land-use and ecosystem change. In-sample and out-of-sample forecasting tests are used to examine the performance of the parcel-scale econometric and simulation models, and the importance of multiple forecasting challenges is assessed. The econometric–simulation method is integrated with an ecological model to generate forecasts of the probability of localized extinctions of an amphibian species. The paper demonstrates the potential of integrating economic and ecological models to generate ecological forecasts in the presence of alternative market conditions and land-use policy constraints.     

An economic assessment of the value of tropical river ecosystem services: Heterogeneous preferences among Aboriginal and non-Aboriginal Australians

There is a current debate about development of the river and wetland systems of tropical Australia. Aboriginal and non-Aboriginal residents of tropical river catchment areas have complex values for these systems which are difficult for decision-makers to accommodate. Aboriginal Australians are a large and growing proportion of the population and are also significant landowners, yet there is little information about the impacts of potential development scenarios on the welfare of Aboriginal Australians that can be used in benefit–cost analyses. This paper reports the application of a choice experiment to assess the potential impact of development/management strategies for three tropical rivers in Australia, and explores the differences between the preferences of Aboriginal and non-Aboriginal Australians living in the catchment areas. Most respondents preferred healthy river systems that are managed under conservation schemes even if this comes at a private cost. The willingness-to-pay of Aboriginal Australians was significantly higher than that of non-Aboriginal Australians for some river attributes, particularly those related to cultural values. Aboriginal respondents were also indifferent towards the extraction of water for irrigated agriculture while non-Aboriginal respondents preferred moderate rather than large or small scale use.     

Modeling economic policy with non-symmetric losses and risk aversion

Optimal control theory of stochastic linear models with quadratic cost is extended to handle a class of non-symmetric, risk-sensitive loss functions which constitute a more realistic behavioral model for economic policy.     

On the relation between ecosystem services,intrinsic value,existence value and economic valuation

Various attempts have been made to amalgamate the concepts of intrinsic value and ecosystem services, often with a stop-over at the economic concept of existence value. These attempts are based on a confusion of concepts, however. In this article, two types of non-use values are distinguished: warm glow value, related to the satisfaction people may derive from altruism towards nature, and existence value, related to the satisfaction people may derive from the mere knowledge that nature exists and originating in the human need for self-transcendence. As benefits to humans, warm glow and existence values can be considered ecosystem services. Neither warm glow value nor existence value represents benefits to nature itself, however. Intrinsic value lies outside the scope of the wide palette of ecosystem services.Although the concept of ecosystem services does not cover benefits to nature and the intrinsic value of such benefits, intrinsic value is not necessarily incompatible with economic valuation. Although a deontological ethics does not allow economic valuation of nature as an end in itself, consequentialism does. In consequentialism, however, intrinsic value is not attributed to nature itself, but to benefits to nature. These benefits can be economically valued on the basis of benefit transfer.     

Review of urban ecosystem services from 2010 to 2020:An analysis based on CiteSpace

This paper systematically combs 416 literature on urban ecosystem services (UES) in China and other countries from 2010 to 2020,and carefully interprets the abstracts of 383 effective literature.According to the classification method of the research perspectives of ecosystem services proposed by Luederitz C,the literature is divided into six categories:ecology,governance,methods / tools / guidelines,social networking,economy and planning,and Excel and CiteSpace software were used for data statis...     

The future of farming: The value of ecosystem services in conventional and organic arable land. An experimental approach

In the current work, a novel, experimental ‘bottom-up’ approach is used to quantify the economic value of ecosystem services (ES) associated with highly modified arable landscapes in Canterbury, New Zealand. First, the role of land management practices in the maintenance and enhancement of ES in agricultural land was investigated by quantifying the economic value of ES at the field level under organic and conventional arable systems. This quantification was based on an experimental approach in contrast with earlier value transfer methods. Total economic value of ES in organic fields ranged from US $1610 to US $19,420 ha^− 1 yr^− 1 and that of conventional fields from US $1270 to US $14,570 ha^− 1 yr^− 1. The non-market value of ES in organic fields ranged from US $460 to US $5240 ha^− 1 yr^− 1. The range of non-market values of ES in conventional fields was US $50 — 1240 ha^− 1 yr^− 1. There were significant differences between organic and conventional fields for the economic values of some ES. Next, this economic information was used to extrapolate and to calculate the total and non-market value of ES in Canterbury arable land. The total annual economic and non-market values of ES for the conventional arable area in Canterbury (125,000 ha) were US $332 million and US $71 million, respectively. If half the arable area under conventional farming shifted to organic practices, the total economic value of ES would be US $192 million and US $166 million annually for organic and conventional arable area, respectively. In this case, the non-market value of ES for the organic area was US $65 million and that of conventional area was US $35 million annually. This study demonstrated that arable farming provides a range of ES which can be measured using field experiments based on ecological principles by incorporating a ‘bottom-up’ approach. The work also showed that conventional New Zealand arable farming practices can severely reduce the financial contribution of some of these services in agriculture whereas organic agricultural practices enhance their economic value.     

An instrumental variables approach to estimating tax revenue elasticities: Evidence from Sub-Saharan Africa

This paper exploits the significant response of real GDP growth of Sub-Saharan African countries to exogenous international commodity price and rainfall shocks to construct instrumental variables estimates of the tax revenue elasticity IV estimates yield that a 1% increase in GDP increases tax revenues by up to 2.5%.     

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.     

Kaldorian approach to Greek economic growth

In the last 30 years, Greece has experienced a rapid of economic growth which has transformed the economy and enable it to become a member of the EEC. Specifically Greece transformed itself from an agricultural economy with virtually no industrial base to an economy with a significant industrial sector and consequently a relatively high income per capita. One can explain this on the lines of a Kaldorian framework. In this paper we provide an outline of Kaldor's growth model and test its relevance to the economic experience of Greece during the 1967–1988 period. The empirical results suggest that the model can adequately explain the development in the economy to a considerable degree.     

A maximum likelihood approach to estimating dynamic models with unobserved independent variables

A maximum likelihood method to estimate the parameters of dynamic models containing unobserved independent variables is proposed. The approach is to maximize the likelihood of the residuals produced by the recursive Kalman filter equations applied to the model in state-space form. A simulation study is presented comparing the proposed method to the instrumental variable approach. An example using real data is given which estimates models of the Permanent-Income Hypothesis.     

Valuing ecosystem and economic services across land-use scenarios in the Prairie Pothole Region of the Dakotas, USA

This study uses biophysical values derived for the Prairie Pothole Region (PPR) of North and South Dakota, in conjunction with value transfer methods, to assess environmental and economic tradeoffs under different policy-relevant land-use scenarios over a 20-year period. The ecosystem service valuation is carried out by comparing the biophysical and economic values of three focal services (i.e. carbon sequestration, reduction in sedimentation, and waterfowl production) across three focal land uses in the region [i.e. native prairie grasslands, lands enrolled in the Conservation Reserve and Wetlands Reserve Programs (CRP/WRP), and cropland]. This study finds that CRP/WRP lands cannot mitigate (hectare for hectare) the loss of native prairie from a social welfare standpoint. Land use scenarios where native prairie loss was minimized, and CRP/WRP lands were increased, provided the most societal benefit. The scenario modeling projected native prairie conversion to cropland over the next 20 years would result in a social welfare loss valued at over $4 billion when considering the study's three ecosystem services, and a net loss of about $3.4 billion when reductions in commodity production are accounted for.     

Jointness in production and farmers' willingness to supply non-marketed ecosystem services

This paper highlights how farmers' willingness to supply non-marketed ecosystem services (ES) is influenced by whether or not the non-marketed ES are produced jointly with agricultural products. When marketed products and non-marketed ES share some production inputs the production relationships between the two may be complementary, competitive or substitutive. Using a cost minimization framework, it is shown how complementary relationships lead to costless voluntary provision of non-marketed ES (typically the case for ES that are supportive of provisioning ES for marketed farm products). It is also shown how competitive production relationships lead to provision of non-marketed ES at lower cost than when non-marketed ES are direct substitutes for farm products or are produced outside of agriculture. The paper closes by showing how the minimum willingness to accept (WTA) payment for ES that are complementary/competitive is less than or equal to the minimum WTA for the same ES produced in substitute or independent production relationships.     

Public economics of hitchhiking species and tourism-based risk to ecosystem services

This paper is the first to examine the public economics of export-based externalities arising within the provisioning of ecosystem services, with direct application to policies to prevent the spread of hitchhiking invasive species. We find when risk enters through exports, policy makers face a tradeoff between welfare improvements and reducing risk of invasion. Estimates of visitor demand elasticity for ecotourism are low, so price policies are not likely to reduce risk, though they can raise tax revenue. If demand is elastic enough to reduce risk, trade effects can cause loss of income greater than the risk of the invasion. The paper is motivated by the expansion of invasive species’ within the United States. We apply our model to the specific example of quagga and zebra mussels invasion into the U.S. Pacific Northwest.     

An alternative to economic retrenchment

The remoteness and geography of Alaska create service access rigidities that are difficult to overcome. The delivery of basic services like healthcare, police protection, and justice are often inadequate in rural places. The continued employment of neoclassical assumptions in policy making is a primary reason policies fail to overcome the barriers. A broader scope of analysis can inform the issues faced by rural residents and provide insight into alternate solutions.