The Ecological Economics of Biodiversity:

The Ecological Economics of Biodiversity: The Ecological Economics of Biodiversity: - Start

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Biodiversity, ecosystem services and human wellbeing . Outline of Lecture. From empty world to full world. Biodiversity, ecosystem goods and ecosystem services. Biodiversity, markets and the nature of resources. ID: 586948 Download Presentation

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The Ecological Economics of Biodiversity:




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Presentations text content in The Ecological Economics of Biodiversity:

Slide1

The Ecological Economics of Biodiversity: Biodiversity, ecosystem services and human wellbeing

Slide2

Outline of Lecture

From empty world to full world

Biodiversity, ecosystem goods and ecosystem services

Biodiversity, markets and the nature of resources

Economics as if biodiversity and ecosystems mattered

Biodiversity and payments for ecosystem services

Ethics and the new biodiversity economy

Slide3

From Empty World to Full World

Slide4

From empty world to full world

Economic production requires raw materials, energy from

nature

Opportunity cost of economic growth = loss of ecosystem goods and

services

Population and consumption have soared

Relative scarcity of human made and natural capital has shifted

Slide5

Relationship Between GDP and Threatened and Endangered Species

Slide6

What is economics?

The allocation of scarce resources among alternative desirable ends

Sequence of questions:

What are the desirable ends?

What are the scarce resources, and what are their physical and institutional characteristics relevant to allocation?

What allocation

mechanisms are

most effective?

Slide7

Ecological economics

Pre-analytic visionEconomy is part, ecosystem whole: endless growth impossibleHighly complex system, transdisciplinary approach requiredRequirements for human well-beingSustainable and desirable scaleContinuous economic growth undesirableBiodiversity is essentialJust distributionEfficient allocation

Slide8

Environmental economics

Pre-analytic visioneconomic system is whole, ecosystem is partUnlimited economic growth is possibleComplicated system. Disciplinary approach suitableRequirements for human well-beingMaximize total monetary value of market and non-market goods and services.

Slide9

The Ecological-Economic Problem

How do we allocate finite ecosystem structure between:Economic productionProduction of life sustaining ecosystem goods and services, themselves sustained by biodiversityCan markets achieve this?

Slide10

Biodiversity, Ecosystem Goods and Ecosystem Services

Slide11

Ecosystem goods

Raw materials

S

t

ructural

building blocks of ecosystems

Low entropy matter-energy

Stock-flow resources

Materially transformed

into something else

Used up, not worn out: use = depletion

Units independent of

time

we

can clear cut a forest today, or harvest slowly over time

Can be

stockpiled

Mostly market goods

Slide12

Ecosystem services

Structure generates

function

ecosystem

services

Fund-service resources

Fund not materially transformed when generating services

Units time dependent: production per year

Cannot be

stockpile

not

using water regulation this year will not leave us more for next year

Spontaneously restored by solar

energy

Mostly non-market, non-priced

Slide13

So What?

Economic production depletes ecosystem structure, and generates waste

Depletion of ecosystem structure and waste emissions both deplete ecosystem services

Both ecosystem goods and services are essential

Economic growth has an enormous opportunity cost, measured in the depletion of ecosystem services

Slide14

Biodiversity, the nature of resources, and economic institutions

Slide15

Excludability

Excludable resource regime

One person

or group can

prevent

others

from using the resource

Necessary for markets to exist

Non-excludable

No enforceable property rights

Can’t charge for use

Some resources non-excludable by nature. None are inherently excludable.

Excludability function of institutions. Policy variable

Slide16

Rivalry

Rival resources

My use leaves less for you to use

Non-rival

My use does not leave less for you to use

Rationing through prices reduces benefits without reducing costs: INEFFICIENT

Innate characteristic of the resource, not a result of institutions

Slide17

How do we allocate?

Rival:

Non-rival:Markets inefficient

Excludable:Markets possible

Non-Excludable:No market possible

Market Good: Ecosystem structure,Waste absorption capacity (e.g. CO2)

Tragedy of the non-commons: genetic diversity under CBD, patented information

Pure Public Good:Most ecosystem services, unowned genetic diversity, unpatented information

Open Access Regime “tragedy of the commons”:Unowned ecosystem structure, waste absorption capacity (e.g. SO2)

Slide18

The Value of Biodiversity and Ecosystem Services

Slide19

The Value of Biodiversity

The diamond-water paradoxvalue in exchange (marginal value) and value in use (value of all units consumed)Economists emphasize exchange valueThe value of private (rival) vs. public (non-rival) resourcesRival goods: value to highest bidderNon-rival services: sum of values across all users

Slide20

The Value of Critical Natural Capital

Slide21

Total Economic Value

Total Economic Value = Direct use value E.g. shade, timber+ Indirect use valueE.g. food source for valued birds, carbonsink+ Option value+ Non-use valueE.g. spiritual valuesThe sum of marginal values: neoclassical concept, dependent on scarcity

Slide22

Millennium Ecosystem Assessment

Slide23

Estimating Demand Curves: Willingness to Pay

Typical approach to estimating monetary values.

Revealed by market purchases for market resources, typically determined by contingent valuation surveys for non-market resources.

Preferences weighted by purchasing power: one dollar, one vote

Fails to account for values to future generations

Is monetary valuation appropriate?

Slide24

Value of conservation

Slide25

Biodiversity and Payments for Ecosystem Services

Slide26

Payments for Biodiversity and Ecosystem Services

Slide27

Providers and beneficiaries

27

3. Flow paths between areas of provision and areas of use

provision

beneficiaries

1. Areas of provision of ES and biodiversity

2. Areas of use of ES

and biodiversity where

beneficiaries are located

Slide28

Payment for Ecosystem Services

There are real costs to conservation, and someone must pay them

Opportunity costs of conservation: The income gained from conversion (e.g. timber) or from use of the converted ecosystem (e.g. agricultural land)

PES is based on

t

he

beneficiary pays principle

“a transfer of resources between social actors, which aims to create incentives to align individual and/or collective land use decisions with the social interest in the management of natural resources” (

Muradian

et al. 2010

p

. 1205),

Generally

instigated by

beneficiaries

Slide29

Types and Examples of PES

Rival

non-rival

Excludable

Non-excludable

Market Good: Purchase of waste absorption capacity CO2 (CDM); water supply (Perrier, hydroelectric)

Tragedy of the non-commons: (PES inappropriate) Avian flu, Ozone depleting compounds, etc

Pure public goods: Payments by governments, international institutions, NGOs, etc.: payments for biodiversity, public technologies that protect biodiveristy and ecosystem services (e.g. Agroecology, clean energy)

Open Access Regime:Create common property regimes; e.g. cooperatives, government payments, caps on CO2 emissions

Rival, on thresholdof scarcity

Congestible: Club goods: e.g. ecotourism

Green

Certificatio

n

Slide30

Ethics and the new biodiversity economy

Deciding on the desirable ends is inherently normative

Ethical behavior stresses the group over the individual, unethical behavior the individual over the group.

Conserving biodiversity requires cooperative, collective economic institutions, not competitive markets

Slide31

Slide32


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