What Every Conservation Biologist Should Know about Economic Theory

Abstract: The last century has seen the ascendance of a core economic model, which we will refer to as Walrasian economics. This model is driven by the psychological assumptions that humans act only in a self‐referential and narrowly rational way and that production can be described as a self‐contained circular flow between firms and households. These assumptions have critical implications for the way economics is used to inform conservation biology. Yet the Walrasian model is inconsistent with a large body of empirical evidence about actual human behavior, and it violates a number of basic physical laws. Research in behavioral science and neuroscience shows that humans are uniquely social animals and not self‐centered rational economic beings. Economic production is subject to physical laws including the laws of thermodynamics and mass balance. In addition, some contemporary economic theory, spurred by exciting new research in human behavior and a wealth of data about the negative global impact of the human economy on natural systems, is moving toward a world view that places consumption and production squarely in its behavioral and biophysical context. We argue that abandoning the straightjacket of the Walrasian core is essential to further progress in understanding the complex, coupled interactions between the human economy and the natural world. We call for a new framework for economic theory and policy that is consistent with observed human behavior, recognizes the complex and frequently irreversible interaction between human and natural systems, and directly confronts the cumulative negative effects of the human economy on the Earth's life support systems. Biophysical economics and ecological economics are two emerging economic frameworks in this movement.     

Integration of ecological–biological thresholds in conservation decision making

In the Anthropocene, coupled human and natural systems dominate and only a few natural systems remain relatively unaffected by human influence. On the one hand, conservation criteria based on areas of minimal human impact are not relevant to much of the biosphere. On the other hand, conservation criteria based on economic factors are problematic with respect to their ability to arrive at operational indicators of well‐being that can be applied in practice over multiple generations. Coupled human and natural systems are subject to economic development which, under current management structures, tends to affect natural systems and cross planetary boundaries. Hence, designing and applying conservation criteria applicable in real‐world systems where human and natural systems need to interact and sustainably coexist is essential. By recognizing the criticality of satisfying basic needs as well as the great uncertainty over the needs and preferences of future generations, we sought to incorporate conservation criteria based on minimal human impact into economic evaluation. These criteria require the conservation of environmental conditions such that the opportunity for intergenerational welfare optimization is maintained. Toward this end, we propose the integration of ecological–biological thresholds into decision making and use as an example the planetary‐boundaries approach. Both conservation scientists and economists must be involved in defining operational ecological–biological thresholds that can be incorporated into economic thinking and reflect the objectives of conservation, sustainability, and intergenerational welfare optimization.     

Five challenges to reconcile agricultural land use and forest ecosystem services in Southeast Asia

Southeast Asia possesses the highest rates of tropical deforestation globally and exceptional levels of species richness and endemism. Many countries in the region are also recognized for their food insecurity and poverty, making the reconciliation of agricultural production and forest conservation a particular priority. This reconciliation requires recognition of the trade‐offs between competing land‐use values and the subsequent incorporation of this information into policy making. To date, such reconciliation has been relatively unsuccessful across much of Southeast Asia. We propose an ecosystem services (ES) value‐internalization framework that identifies the key challenges to such reconciliation. These challenges include lack of accessible ES valuation techniques; limited knowledge of the links between forests, food security, and human well‐being; weak demand and political will for the integration of ES in economic activities and environmental regulation; a disconnect between decision makers and ES valuation; and lack of transparent discussion platforms where stakeholders can work toward consensus on negotiated land‐use management decisions. Key research priorities to overcome these challenges are developing easy‐to‐use ES valuation techniques; quantifying links between forests and well‐being that go beyond economic values; understanding factors that prevent the incorporation of ES into markets, regulations, and environmental certification schemes; understanding how to integrate ES valuation into policy making processes, and determining how to reduce corruption and power plays in land‐use planning processes.     

Conservation and the Myth of Consensus

Abstract:  Environmental policy makers are embracing consensus-based approaches to environmental decision making in an attempt to enhance public participation in conservation and facilitate the potentially incompatible goals of environmental protection and economic growth. Although such approaches may produce positive results in immediate spatial and temporal contexts and under some forms of governance, their overuse has potentially dangerous implications for conservation within many democratic societies. We suggest that environmental decision making rooted in consensus theory leads to the dilution of socially powerful conservation metaphors and legitimizes current power relationships rooted in unsustainable social constructions of reality. We also suggest an argumentative model of environmental decision making rooted in ecology will facilitate progressive environmental policy by placing the environmental agenda on firmer epistemological ground and legitimizing challenges to current power hegemonies that dictate unsustainable practices.     

Environmental Constituent Interest, Green Electricity Policies, and Legislative Voting

Research in political economy has traditionally sought to disentangle the effects of legislative ideology and constituent interest in explaining policy decisions. Frequently, proxy variables are used to measure constituent interest. However, these measures do not adequately reflect true constituent interest, which is based upon the costs and benefits of the policies under consideration, incorporating the scope of the policies. Using Haiku, a detailed model of the US electricity sector, and TAF, an integrated assessment model of pollution pathways and valuation, I construct economic measures of constituent interest at the state level as well as for federal policy. I then use these measures to analyze state adoption of more stringent green electricity policies and congressional roll-call voting on federal environmental policy. Previous studies that use proxy measures of constituent interest typically find that the legislator ideology matters more, while my study shows that both ideology and constituent interest are significant factors.     

Urban Fluid Mechanics: Air Circulation and Contaminant Dispersion in Cities

Recently, many urban areas of the world have experienced rapid growth of population and industrial activity raising concerns of environmental deterioration. To meet challenges associated with such rapid urbanization, it has become necessary to implement wise strategies for environmental management and planning, addressing the exclusive demands of urban zones for maintaining environmental sustainability and functioning with minimum disruption. These strategies and related public policy must be based on state-of-the-science tools for environmental forecasting, in particular, on mathematical models that accurately incorporate physical, biological, chemical and geological processes at work on urban scales. Central to such models are the mechanics of environmental fluids (air and water) and their transport and transformation characteristics. Although much progress has been made on understanding environmental flow phenomena, a myriad of issues akin to urban flow, the transport phenomena, air and water quality and health issues (epidemiology) remain to be understood and quantified. We propose to initiate a new focus area – Urban Fluid Mechanics (UFM) – tailored to research on such issues. For optimal societal impact, UFM must delve into fundamental and applied fluid flow problems of immediate utility for the development of urban public policy and environmental regulations. Such efforts often entail the use of `whole' systems approach to environmental studies, requiring careful synthesis between crosscutting areas.In this paper, a few topics in the realm of UFM are presented, the theme being the flow and air quality in urban areas. Topics such as the scales of flow, the atmospheric boundary layer, pollutants and their transport and modeling of flow and air quality are briefly reviewed, discussed and exemplified using case studies. Identification of important flow-related issues, rigorous multidisciplinary approaches to address them and articulation of results in the context of socio-political cause calebre will be the challenges faced by UFM.     

Environmental economics: An evolutionary critique and a plea for pluralism

Environmental economics is a contradiction in terms. The contradiction is intuitive to the puzzled lay person inquiring about the nature of our subdiscipline. It is explicit to those who think of environmental systems in terms of complex, evolving interconnectedness and identify the economic model with the atomistic and mechanistic assumptions of classical mechanics. Within the subdiscipline, we try to resolve the contradiction by internalizing externalities, by matching market feedbacks with environmental relations. While acknowledging that insights can be drawn from the market view of environmental problems, I argue in this essay that (1) the contradiction is nerver resolved; (2) multiple, incongruous perspectives are all we have for understanding the interface between economic and environmental systems; and (3) environmental economics will thrive with a return to philosophical pluralism, to the open acceptance of the contradiction.     

Renewable Resource Economists and Policy: What Differences Have We Made?

This paper surveys developments in fisheries economics and fisheries policy over the past half century. Early work clarified the nature of the economic issues associated with open access, laying the groundwork for changes in policies after coastal nations expanded their jurisdictions in 1976. Perhaps the most important point made by economists is that property rights matter and that open-access conditions create economic as well as biological problems. The policy process has begun to create property rights systems, although many of the world's fisheries still operate under mixed systems of regulations and open access incentives.     

An empirical analysis of economic strategies for controlling air pollution

In evaluating current environmental protection policy, economists often note that current regulations are more costly than necessary to meet environmental quality standards. While the a priori case is strong that current regulatory approaches are resulting in higher-than-necessary costs to attain environmental standards, there is relatively little empirical evidence to support this claim. The purpose of this paper is to supply some of the missing evidence by presenting the results of one study that assesses some of the potential savings associated with implementing economic, rather than command-and-control, regulatory approaches to abate one type of air pollution in one region of the country. Specifically, the paper examines the costs of meeting a prospective short-term standard for nitrogen dioxide under a range of alternative emissions control strategies for stationary sources of nitrogen oxide emissions in the Chicago Air Quality Control Region. The alternative strategies that are considered range from those that might result under current regulatory policy to those that economic policy approaches (such as emissions charges or marketable permits) are designed to implement. The analysis shows that the most efficient program of emissions controls may be more than an order of magnitude less costly than current regulatory strategies, and that economic approaches have additional advantages over more conventional regulatory approaches.     

Conservation Science and Forest Service Policy for Roadless Areas

Abstract:  Questions persist regarding whether the science of conservation biology can successfully affect environmental decision making. One of the most prominent fields of intersection between conservation science and environmental policy is public-lands debates in the United States. I reviewed the role of conservation science in the roadless-area policies of the U.S. Forest Service. Since 1971, the Forest Service has systematically evaluated roadless areas on national forests three times, most recently during the Clinton administration's Roadless Area Conservation Review (1998–2000) ( U.S. Department of Agriculture Forest Service 2000b ). Drawing on the agency's environmental impact statements and supporting documents and the internal records of conservation organizations, I examined the changing goals, methodology, and outcome of roadless-area advocacy and policy. Since the 1970s, conservation science has successfully informed public and administrative concern for roadless-area protection. Conservation science has transformed public discourse regarding roadless areas and has changed the scope and rationale of national conservation organizations' goals for roadless-area policy from protecting some to protecting all remaining national forest roadless areas. The Forest Service has increasingly drawn on the lessons of conservation biology to justify its methodology and its administrative recommendations to protect roadless areas. The 2000 Roadless Area Conservation Review resulted in a recommendation to protect all remaining national forest roadless areas, up from 22% of roadless areas in the first roadless review. Despite the scientific merits of recent roadless-area advocacy and policy, however, such initiatives have faced political difficulties. The emphasis on large-scale, top-down, national approaches to conservation policy has rendered such policies politically problematic.     

The Role of Prices in Conserving Critical Natural Capital

Abstract: Until recent decades, economic decision makers have largely ignored the nonmarket benefits provided by nature, resulting in unprecedented threats to ecological life‐support functions. The economic challenge today is to decide how much ecosystem structure can be converted to economic production and how much must be conserved to provide essential ecosystem services. Many economists and a growing number of life scientists hope to address this challenge by estimating the marginal value of environmental benefits and then using this information to make economic decisions. I assessed this approach first by examining the role and effectiveness of the price mechanism in a well‐functioning market economy, second by identifying the issues that prevent markets from pricing many ecological benefits, and third by focusing on problems inherent to valuing services generated by complex and poorly understood ecosystems subject to irreversible change. I then focus on critical natural capital (CNC), which generates benefits that are essential to human welfare and have few if any substitutes. When imminent ecological thresholds threaten CNC, conservation is essential and marginal valuation becomes inappropriate. Once conservation needs have been met, remaining ecosystem structure is potentially available for economic production. Demand for this available supply will determine prices. In other words, conservation needs should be price determining, not price determined. Conservation science must help identify CNC and the quantity and quality of ecosystem structure required to ensure its sustained provision.     

Resilienz vs. Effizienz – ein kritischer Blick auf die Umweltökonomie

Background, aim, and scope Economists assess politics (also concerning energy supply) due to the efficiency criterion. Thus, economic instruments for environmental protection shall contribute to achieve ecological goals in an (cost-)efficient way. We show that the overemphasis of efficiency is an alien in the way (ecological) systems are working. Mostly, ecological systems are not high-grade efficient. Hence, economic instruments of environmental protection introduce an inappropriate logic to ecological systems that may have severe impacts on their resilience. We illustrate this with the example of emission trading. Time efficiency is considered to be a powerful criterion due to the interest yield requirements of investors, also for ecological investments. We show how the concentration on time efficiency destroys diversity and has negative impacts on the resilience of (eco-)systems. Main features The economic system is embedded in society and natural environment (as self-organizing, living systems). The economy as an ‘instrumental system’ should serve these systems. The guiding value approach (a system theory approach) gives indication that overemphasizing certain guiding values (such as efficiency, as the economic science does) may weaken the functional capability of systems and finally may lead to a collapse of the systems. Results and discussion The article tries to change the focus of the discussion. An altered focus probably has to be implemented by scientists of other subject areas. Contemporary environmental economics (with its focus on efficiency) is unable to give satisfying answers on the pestering problems. Conclusions Criticising the primacy of efficiency is not the same as generally to disclaim considering efficiency needs. Instead, based on the guiding value theory, we want to be contrary to the one-sided and dominating stressing of the of the efficiency criterion. Perspectives Not following the efficiency guide any more means to think over some ‘sacred cows’ such as emission trading or shareholder value. Instead we have to think over alternative designs to reach the ecological targets.     

How Research‐Prioritization Exercises Affect Conservation Policy

Abstract: Conservation scientists are concerned about the apparent lack of impact their research is having on policy. By better aligning research with policy needs, conservation science might become more relevant to policy and increase its real‐world salience in the conservation of biological diversity. Consequently, some conservation scientists have embarked on a variety of exercises to identify research questions that, if answered, would provide the evidence base with which to develop and implement effective conservation policies. I synthesized two existing approaches to conceptualizing research impacts. One widely used approach classifies the impacts of research as conceptual, instrumental, and symbolic. Conceptual impacts occur when policy makers are sensitized to new issues and change their beliefs or thinking. Instrumental impacts arise when scientific research has a direct effect on policy decisions. The use of scientific research results to support established policy positions are symbolic impacts. The second approach classifies research issues according to whether scientific knowledge is developed fully and whether the policy issue has been articulated clearly. I believe exercises to identify important research questions have objectives of increasing the clarity of policy issues while strengthening science–policy interactions. This may facilitate the transmission of scientific knowledge to policy makers and, potentially, accelerate the development and implementation of effective conservation policy. Other, similar types of exercises might also be useful. For example, identification of visionary science questions independent of current policy needs, prioritization of best practices for transferring scientific knowledge to policy makers, and identification of questions about human values and their role in political processes could all help advance real‐world conservation science. It is crucial for conservation scientists to understand the wide variety of ways in which their research can affect policy and be improved systematically.     

An economic evaluation framework for land-use-based conservation policy instruments in a changing climate

Climate change is a key threat to biodiversity. To conserve species under climate change, ecologists and conservation scientists suggest 2 main conservation strategies regarding land use: supporting species’ range shifts to enable it to follow its climatic requirements by creating migration pathways, such as corridors and stepping stones, and conserving climate refugia (i.e., existing habitat areas that are somewhat buffered from climate change). The policy instruments that could be used to implement these conservation strategies have yet to be evaluated comprehensively from an economic perspective. The economic analyses of environmental policy instruments are often based on ecological effectiveness and cost-effectiveness criteria. We adapted these general criteria to evaluate policy instruments for species’ conservation under climate change and applied them to a conceptual analysis of land purchases, offsets, and conservation payments. Depending on whether the strategy supporting species’ range shifts or conserving climate refugia is selected, the evaluation of the policy instruments differed substantially. For example, to ensure ecological effectiveness, habitat persistence over time was especially important for climate refugia and was best achieved by a land-purchase policy instrument. In contrast, for the strategy supporting range shifts to be ecologically effective, a high degree of flexibility in the location of conserved sites was required to ensure that new habitat sites can be created in the species’ new range. Offset programs were best suited for that because the location of conservation sites can be chosen comparatively freely and may also be adapted over time.     

Economic and Social Dimensions of Environmental Behavior: Balancing Conservation and Development in Bhutan

Abstract: One of the primary approaches to environmental conservation emphasizes economic development. This conservation‐and‐development approach often ignores how development affects sociocultural characteristics that may motivate environmental behaviors (actions that actively benefit or limit one's negative impacts on the environment). Evolutionary anthropologists espouse a theoretical perspective that supports the conservation‐and‐development approach. Others believe sociocultural factors are the foundation of environmental behavior and worry that development will erode the values and norms that may shape such behavior. My research assistants and I surveyed 170 individuals from eight villages in two communities in Bhutan to explore whether economic (wealth, market integration) or social (religious behaviors, environmental values, social capital) factors are better indicators of environmental behavior. I used multilevel modeling to analyze use of fuelwood, use of agricultural chemicals, and tree planting, and to determine whether social norms were associated with these behaviors. Although economic factors were more often associated with these behaviors than social factors, local conditions and control variables were the best indicators of behaviors. Furthermore, economic factors were not always associated with positive environmental outcomes. Instead, farmers attempted to make the best economic decisions given their circumstances rather than seeking to conserve resources. Although religion was not a strong predictor of any of the behaviors I examined, I found evidence that the understanding of Buddhist philosophy is growing, which suggests that social factors may play a more prominent role as Bhutan's development progresses. My results highlight the need for conservation planners to be aware of local conditions when planning and implementing policies aimed at motivating environmental behaviors and that economic and social motivations for conservation may not be mutually exclusive.     

Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion

We develop a framework for comparing empirically the effects of alternative environmental policy instruments on the diffusion of new technology. "Market-based" and "command-and-control" approaches can he quantitatively compared by estimating the economic penalty that firms, through their actions, reveal to be associated with violation of standards. In the context of concerns about global climate change, we empirically examine the likely effects of Pigouvian taxes, technology adoption subsidies, and technology standards. We employ state-level data on the diffusion of thermal insulation in new home construction, comparing the effects of energy prices, insulation cost, and building codes.     

Sustainable development in the BRICS countries: an efficiency analysis by data envelopment

There is much concern about the social and environmental impacts caused by the economic growth of nations. Thus, to evaluate the socio-economic performance of nations, economists have increasingly addressed matters related to social welfare and the environment. It is within the scope of this context that this work discusses the performance of countries in the BRICS group regarding sustainable development. The objective of this study regards evaluating the efficiency of these countries in transforming productive resources and technological innovation into sustainable development. The proposed objective was achieved by using econometric tools as well as the data envelopment analysis method to then create economic, environmental, and social efficiency rankings for the BRICS countries, which enabled to carry out comparative analyses on the sustainable development of those countries. The results of such assessments can be of interest for more specific scientific explorations.     

Entitlements, missing markets, and environmental uncertainty: Reply

At one level Dore and Ward seem intent on immunizing received doctrine. They say that I did not prove that rights violated Nozick's principles of justice, and that I did not prove that missing markets were the problem. More telling, they allege I did not prove that my story was better than the particular story favored by Dore and Ward. That is, they argue that : “ … there is an alternative approach, based on the theory of public economics, which is indeed operational.”³ They then use the bulk of their comment to explain and defend this alternative model. They hope to convince the reader that the model of “public economics” survives intact in the face of my alternative model. To the extent that their model allows one to define the problem away, it is not difficult to see why they find it so compelling.More seriously, Dore and Ward fail to make a coherent argument about the concept of rights and duties and the logic of a particular rights structure that happens to prevail. They seem concerned that my article was tampering with some sacred social construct—the status quo rights structure—and that my article threatened the received wisdom of both “public economics” and Paretian-Walrasian bliss. Indeed, theirs seems to be a genuine fear that if economists release their grip on the certitude of received orthodoxy the floodgates will be open to all manner of bumbling regulators seeking to shift rights and wealth positions across generations. My article is apparently threatening because it seems to suggest that the received wisdom may, at times, be misleading.     

Economic Valuation of Biodiversity Conservation: the Meaning of Numbers

Abstract:  Recognition of the need to include economic criteria in the conservation policy decision-making process has encouraged the use of economic-valuation techniques. Nevertheless, whether it is possible to accurately assign economic values to biodiversity and if so what these values really represent is being debated. We reviewed 60 recent papers on economic valuation of biodiversity and carried out a meta-analysis of these studies to determine what factors affect willingness to pay for biodiversity conservation. We analyzed the internal variables of the contingent-valuation method (measure of benefits, vehicle of payment, elicitation format, or timing of payment) and anthropomorphic, anthropocentric and scientific factors. Funding allocation mostly favored the conservation of species with anthropomorphic and anthropocentric characteristics instead of considering scientific factors. We recommend researchers and policy makers contemplate economic valuations of biodiversity carefully, considering the inherent biases of the contingent-valuation method and the anthropomorphic and anthropocentric factors resulting from the public's attitude toward species. Because of the increasing trend of including economic considerations in conservation practices, we suggest that in the future interdisciplinary teams of ecologists, economists, and social scientists collaborate and conduct comparative analyses, such as we have done here. Use of the contingent-valuation method in biodiversity conservation policies can provide useful information about alternative conservation strategies if questionnaires are carefully constructed, respondents are sufficiently informed, and the underlying factors that influence willingness to pay are identified.     

Stochastic environmental research risk assessment

In a briefly approach, sustainability can be defined as the ability to achieve economic prosperity while protecting the natural systems of the planet, and providing a higher quality of life for its people. Nowadays it is a prime and very active area of research, fundamental for human development. Several concepts based on economics, social and environmental concerns have been considered in the development of sustainability indices. The sustainability concept is, not only but necessarily, dependent on “quantification of the environment health”, necessary to determine its effectiveness in achieving or increasing the environmental capacities of ecosystems, as well as to compare alternative plans and policies, to influence decision-makers.Environmental indices are a very important tool for the analysis of some environmental assessment factors, providing quantitative criteria and synthesizing the available information. A good index should be simple to use, transparent, and expandable across other issues. In particular, environmental indices are a useful tool for several audiences, to aid environmental decision making and to allow the media to keep score of and reduce complex information to a smaller, more easily retained, amount of information [Hardi, P., DeSouza-Huletey, J.A., 2000. Issues in analyzing data and indicators for sustainable development. Ecol. Model. 130, 59–65].The goal of this work is the development of environmental indices, based on stochastically simulated scenarios, using probabilistic approaches. This study was applied to assess the impact of particulate air contamination on the Setúbal Peninsula ecosystems (South of Lisbon, Portugal).