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Ecological Economics (part 1) Ch. 4: Direct use values

Ecological Economics (part 1) Ch. 4: Direct use values. Resources (The Goods). 4 categories of “Goods”. Commons Goods. Rival/Nonexcludable: Owned by society (or nobody), accessible to all Concept: “ Tragedy of the Commons ” ( Garrett Hardin : 1968 ). Science 2003 special issue.

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Ecological Economics (part 1) Ch. 4: Direct use values

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  1. Ecological Economics (part 1)Ch. 4: Direct use values

  2. Resources (The Goods) • 4 categories of “Goods”

  3. Commons Goods • Rival/Nonexcludable: Owned by society (or nobody), accessible to all • Concept: “Tragedy of the Commons” (Garrett Hardin: 1968) Science 2003 special issue

  4. Tragedy of the Commons

  5. Tragedy of the Commons: Marine Systems Who am I (lecture #1)? Interested? See pdf on class webpage about deep sea fishery sustainability

  6. Tragedy of the CommonsSolutions • 1) economic: pay for use/damage, regulations • How? Taxes/fees/laws: government involvement! • 2) ethics: restrain self-interest (Ch. 6)

  7. Environmental Impact Assessments • Estimate current/future environmental effects of project • Type Cost-Benefit Analysis: costs and benefits compared Challenges….

  8. Environmental Impact Assessments • Challenges • 1) Predict future economic conditions, value of resources • 2) Subsidies (incentives, support programs, tax breaks) • May not be included (perverse subsidies: harm both economy and environment)

  9. New Approach:Precautionary Principle • 1) If harm may result, delay until new information • 2) Burden of proof: those proposing activity show it’s harmless Ex: Hg pollution

  10. Indices of Economic Productivity What am I? ??

  11. Indices of Economic Productivity • GDP=Gross Domestic Product • Traditional measure productivity • Problem: Exxon Valdez oil spill (Alaska 1989) • Net economic gain to GDP!

  12. Suggestion: New Index • Ex 1: Genuine Progress Indicator (GPI) • Includes environmental damage • U.S.: 1986-1994 as decline (GDP showed growth)

  13. Suggestion: New Index • Ex 2: Environmental Sustainability Index (ESI) • Includes environmental health • Question: Can country be sustainable and economically competitive? (Fig. 4.2)

  14. Suggestion: New Index • New ideas still being developed.

  15. Types of Economic Value of Resources

  16. Economic Value of Resources • Direct use value: products harvested by people (private goods)

  17. Economic Value of Resources • Direct use value: products harvested by people (private goods) • Indirect use value (Ch. 5): benefits to society from resources when not harvested • Option value (Ch. 5): possible future benefits to society • Existence value (Ch. 5): $ value assigned to biodiversity (perhaps by conservation groups)

  18. Types of Economic Value Rare species webpage Economic Value connection….. Fig. 4.3

  19. Direct Use Value • Harvested Goods (Rivalrous). Includes: • 1) Consumptive use value: consumed locally • 2) Productive use value: sold in markets

  20. Consumptive Use • Not in GDP! • Exs.: • 80% people: traditional medicines • Protein: “bush meat” in Africa • Fuelwood/dung energy (33% people)

  21. Consumptive Use Value • How assign value? • 1) Estimate cost if sold (use productive use value) • 2) Estimate cost to replace in market (substitute cost approach) • Problematic…

  22. Productive Use Value • Sold nationally/internationally (shows in GDP) • Problem: how assign value? • First point of sale? Finished product? • Ex: bark wild cascara (laxative) • Bark sold for $1 million • Final product sold for $75 million

  23. Productive Use Value • Importance? • 4.5% U.S. GDP (wild species) • $630 billion (2008)

  24. Ecological economics (part 2)Ch. 5: Non-direct values

  25. Economic value of biodiversity • Direct use value: consumptive and productive use values (Ch. 4) • Indirect use value: or non-consumptive use value. • Option value: possible future benefits to society • Existence value: value to those wishing to save species/habitat.

  26. Indirect use value • “Ecosystem services (4):” • 1) Provisioning: water, energy (food: direct use) • 2) Regulating: climate/flood control, waste processing • 3) Supporting: foundation all ecosystems • 4) Cultural: spiritual, educational, recreational Fig. 5.1

  27. 1: Provisioning • Watershed value: • New York City spent $1.5 billion (1980s) to protect watersheds (reservoirs) • Filtration plants: would cost $8-9 billion

  28. 2: Regulating • Wetlands: Buffering storm impacts • Textbook Box 5.1: Prophecy Fulfilled • Katrina cost $100-200 billion! Hurricane Katrina Aug. 29, 2005

  29. 2: Regulating • Local climate: • Trees: shade, evaporative cooling, absorb air pollution. Helps “heat island” effect • Ex, Atlanta: 5-8 F > surroundings • Urban deforestation: Loss tree cover (cities) • Ex: tree cover Chicago & Philadelphia <20%

  30. 2: Regulating • Larger scale: • Forests (transpiration: evaporation water from leaves) • Deforestation: tropical cloud forests drier if lowland forests cleared Deforested moisture Forested moisture Cloud forest

  31. 2: Regulating • Processing nutrients • Ex, New York Bight (Hudson River) • Sewage 20 million people • $ billions to replace

  32. 3: Supporting • Humans harvest (or waste) 50% terrestrial productivity (25% global)! • Supports direct use value Geoduck clam!

  33. 3: Supporting • Biodiversity & ecosystem function • How much richness decrease before declines? 2012 article: Biodiversity loss and its impact on humanity (Nature 486: 59-67)

  34. 3: Supporting • Ex, Biotic pollination mutualism • Native pollinators worth $20-40 billion/yr (U.S.) • 150 food crops Who am I? Solitary bees Bee crops

  35. 3: Supporting • Ex, Biotic pollination • Ex, blueberries (Alabama). Southeastern blueberry bee: 1 bee pollinates $75 worth berries (visits 50,000 flowers/yr). SE blueberry bee on the job!!

  36. 4: Cultural • “Amenity value”: Economic activity to enjoy nature • U.S. parks: $4 billion/yr! • Ecotourism: tourism to experience biodiversity

  37. Ecotourism • Important developed countries (Text Box 4.1) • Developing countries: • 1) protect natural areas • 2) improve life

  38. Ecotourism Dangers • 1) Little money to developing area • 60-80% $ stays in developed country • 0.01-1%: fees to native parks • 2) Tourist use can harm area/species

  39. 4: Cultural • Nature as intellectual content: books! The Boyd Book: Available for just $160 (postpaid!)

  40. 4: Cultural • TV/radio shows • Classroom materials Steve Irwin (Crikey!)

  41. Value of Intact Systems: $ Examples • Ecological economics: August 2002 (Science) • Searched 300 economic case studies • Intact (indirect use + consumptive use) value vs. productive use value

  42. Value of Intact Systems • Ex 1: Tropical Forest, Malaysia • Conventional logging $10,000/ha • Reduced-impact logging $11,200/ha • Intact forest $13,000/ha • Watershed value, harvest renewable products Sundaland!

  43. Value of Intact Systems • Ex 2: Coastal mangrove forest, Thailand • Shrimp farming $16,700/ha • Intact forest $60,400/ha • Storm protection, fisheries value major factors Indo-Burma!

  44. Value of Intact Systems • Ex 3: Freshwater marsh, Canada • Drained & farmed $3,700/ha • Intact $8,800/ha • Hunting, fishing, trapping important.

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