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The Economics of Hawaii’s Invasive Species

The Economics of Hawaii’s Invasive Species. Kimberly M. Burnett University of Hawaii at Manoa Department of Economics. What is an “Invasive Species”?. An “invasive species” is defined as a species that is non-native (or alien) to the ecosystem under consideration and

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The Economics of Hawaii’s Invasive Species

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  1. The Economics of Hawaii’s Invasive Species Kimberly M. Burnett University of Hawaii at Manoa Department of Economics

  2. What is an “Invasive Species”? • An “invasive species” is defined as a species that is • non-native (or alien) to the ecosystem under consideration and • whose introduction causes or is likely to cause economic or environmental harm or harm to human health. Executive Order 13112, President Clinton, 1999 • Invasive species can be plants, animals, and other organisms (e.g., microbes). Human actions are the primary means of invasive species introductions.

  3. Hawaii as a Laboratory • Most isolated place on earth • Lots at risk: biodiversity, tourism, “paradise” • Potential to keep things out • Why do we see increasing invasion? • Increased trade • Globalization, disappearance of borders • Ease of mobility • Intentional introductions: driven by individual benefits; without accounting for potential social costs

  4. Invasive Species as Externalities • Intentional introductions • Agriculture/Aquaculture (Apple snails) • Horticulture (Miconia) • Pet trade (Salvinia) • Unintentional introductions • Floriculture trade (Coqui) • Transport (Brown treesnake)

  5. Outline • Threat from invasives • Policy • Bioeconomics (interdisciplinary problem) • 3 case studies: • Existing invader • Potential invader • Explosive invader • Conclusions for economics/policy • Conclusions for biology

  6. Economic: Direct damages to physical capital Direct damages to human health Direct damages to natural resource assets Ecological: Ecosystem change Water quality/ quantity Soil conditions Loss of biodiversity Loss of resilience Loss of productive resources Threat from Invasives

  7. Threats to Hawaii Miconia landslide, Tahiti

  8. Role of Policy for Invasive Species • Policy currently fragmented and inefficient • Black lists • Inspections • Control efforts • Biological and economic tools must be used together to target policies that minimize disturbances to economy and environment • Successful policy will integrate prevention and control decisions

  9. Prevention Reduce entrance vectors Interdiction at source Interdiction at destination Control Eradication Population reduction Containment Adaptation Prevention and Control

  10. Planning Optimal Policy • Prevention and control decisions should be integrated and incorporate expected damages • Need to include both ecological and economic factors: Biological capacity Entrance vectors Reproduction Rate of transport Relative isolation Adaptability Habitat Costs Competitors Risks Predators Damages

  11. Biology + Economics = Bioeconomics • Biology (and ecology and hydrology): how fast does it grow, where is it now, where is it going, how will it affect other species… • Economics: cost of control, value of expected damages • Show why all are necessary through case studies

  12. The Existing Invader: Miconia calvescens • Native to South America • Intentionally introduced to a Big Island nursery in 1960’s • Attractive purple and green leaves • Aggressive growth • Long-lived seed bank • Shallow roots • Forms monotypic stands, dense canopy • “Purple plague” • “Green cancer” • Present on 4 main islands

  13. Biology: How Fast Does it Grow? Where K = 100 trees per acre above 1800 mm/yr rainfall line

  14. Ecology: Endangered Species

  15. Hydrology: Potential WatershedChange from Invasion • Reduction in groundwater speeds up depletion of aquifer, increases water prices and need for desalination • Increase in sedimentation decreases water quality and viability of forest and nearshore resources

  16. Watershed

  17. Economics: The Value of Losing Birds & Water

  18. Economics: Cost of Control?

  19. Current Population?

  20. Optimal Population

  21. Policy Comparisons

  22. Recap • Population reduction optimal for most islands. • May be preferable to let population increase on Kauai (search costs high relative to damage) • For Molokai, optimal to spend on prevention and keep at zero • Difficulty with nonmarket valuation (true value of endangered birds, etc.).

  23. The Potential Invader: Brown Treesnake • Native to New Guinea/Australia • Accidentally introduced to Guam during WW2 • Heavy transport btw Guam and Hawaii (esp. military) • 8 intercepted at HI ports since 1980 • Survived trip from Guam to Texas for months in a washing machine • Hitchhikes in wheels of airplanes, hidden in cargo • Mildly venomous • “Just a matter of time” (and money)

  24. Biology: Growth

  25. Ecology: Biodiversity Losses

  26. Economics: Damage • Based on Guam, • Power outage costs: $121.11 /snake • Snakebite costs: $0.07 /snake • Biodiversity: $0.32 – $1.93 /snake • Loomis and White (1996) • Total expected damages: $122.31 per snake

  27. Economics: Control Cost • Catching 1 out of 1: $100 million (?) • Catching 1 out of 100: $100,000 • Catching 1 out of 39m: $0.64

  28. Arrival Function

  29. Optimal Prevention and Control Expenditures control C(x*)=$10 m $6 m Optimal population n = 543 y*=$ 84,000 prevention

  30. Policy Comparisons

  31. Recap • If zero snakes, spend heavily on prevention • If more than zero snakes, spend on control • May be large returns to early detection of small populations • Uncertainty about current population warrants diversification between strategies

  32. The Explosive Invader: Coqui Frog • Native to Puerto Rico • Introduced to Hawaii late 1980s through nursery trade • Spread to 4 islands by movement of plant material and intentional introductions • No external tadpole stage; does not require standing water; 2 week breeding cycle • Have attained some of the highest densities ever observed for terrestrial amphibian populations (up to 133,000 per ha on Hawaii) • New populations being reported weekly Coqui photos: USDA/APHIS/NWRC Hilo Field Station “ko-KEE” Full chorus

  33. Falling Property Prices?Hedonic Pricing Theory • Wish to explain determinants of total property price • Some things add to price, others subtract • Structural • Number of rooms, number of bathrooms, square footage (+) • Acreage (+) • Neighborhood/Accessibility • Proximity to public transportation, school districts, other amenities (+/–) • Zoning (+/–) • Environmental • Presence of coqui (–???) • Elevation (+) • Financial • Mortgage rates (–) • Buyer in HI (–) • Derive implicit value of each characteristic from explicit price of property using multiple regression analysis

  34. Study Site and Data • 50,033 real estate transactions on Big Island, 1995-2005 • 9 main districts (see map) divided into 10 sub-districts each to control for neighborhood characteristics • SFLA to represent structure • Frog complaints registered to NWRC Hilo, 1997-2001 • Use GIS to identify property transactions occurring after complaint, within 500m and 800m of frog complaints • Financial variables • Prices deflated using West Urban CPI • 30 year mortgage rates from Federal Reserve • Buyer residing in HI used to control for information effects

  35. Percentage of Transactions with Frog Complaints Prior to Sale

  36. Puna Close-up Frogs within 500 m Frogs within 800 m Transactions

  37. Impact on Property Price ***,** indicate statistical significance at 99% and 95% confidence respectively Huber-White Robust Standard errors in parentheses.

  38. Recap • Presence of frogs have a negative impact on property value • Tells us nothing about optimal policy (don’t know the response of population to spending) • Need to build model of frog population response to spending if want to evaluate policy options

  39. Limitations • General • Nonmarket values controversial/hard to measure • Miconia • How to deal with seed bank (is zero really zero?) • Lack of spatial considerations • Brown treesnake • “Not here”, so… • Uncertain about population • Uncertain about annual arrivals • Unknown control costs • Lack of spatial considerations • Coqui • Ecological threats not accounted for

  40. Directions of Future Research • Miconia • Better data on: current number of trees on each island, growth, costs, locations • Brown treesnake • Early detection/rapid response • Probabilistic model • Coqui • Real estate analysis: increase years of BI data, add Maui data • Calculate lost profits to horticultural industry from • Reduced revenues from lost sales if infested • Increased costs from removing frogs for certification • Model the increase in potential viability of brown treesnake and accompanying increase in potential damages (biodiversity loss, power supply and medical expenses) due to coqui prey base

  41. Conclusions • Invasive species can cause real economic damage • Eradication not necessarily preferred over population maintenance or adaptation • An ounce of prevention not necessarily “worth a pound of cure” • Optimal policy will depend on economic as well as ecological characteristics of an invasion • Essential to consider benefits versus costs over some time horizon

  42. Acknowledgements James Roumasset, Brooks Kaiser, William Pitt, Sean D’Evelyn, and Porntawee Nantamanasikarn

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