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REM 363/ENV 399 - Week 14 ECONOMICS & BIODIVERSITY

REM 363/ENV 399 - Week 14 ECONOMICS & BIODIVERSITY. What is biodiversity and how much is being lost?. Biodiversity is defined by one source as: "… the variety and variability among living organisms and the ecological complexes in which they occur." (U.S. OTA)

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REM 363/ENV 399 - Week 14 ECONOMICS & BIODIVERSITY

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  1. REM 363/ENV 399 - Week 14 ECONOMICS & BIODIVERSITY

  2. What is biodiversity and how much is being lost? • Biodiversity is defined by one source as: "… the variety and variability among living organisms and the ecological complexes in which they occur." (U.S. OTA) • Recorded biodiversity (species) loss since 1600: • vertebrates … 337 species • invertebrates … 389 species • plants … 90 species • Recent losses may be 128 (birds) to 176 (mammals) times the background rate

  3. Proximate (superficial) causes of biodiversity loss • vulnerability factors (e.g. polar bear) • habitat destruction (e.g. tall and short grass prairies of North America) • bio-invasions - refers to the introduction of an alien species to a new habitat (e.g. feral cats, rabbits in Australia). • overharvesting - rarely leads to extinction (e.g. various whale species)

  4. Underlying reasons for biodiversity loss .. • Market failure explanations (e.g. public goods, externalities, lack of property rights, trade and invasives, etc.) • Policy failure explanations (e.g. clearing and drainage for agriculture) • An example .. conservation in tropical protected areas • Also, “Human society has a choice in regard to the amount of biodiversity that will be retained along its development path, and this choice has thus far been made in a haphazard fashion” (Swanson 1995:2)

  5. Conservation Challenges in a National Park in a Tropical Country Park Protection Farming Vulnerable Species Access to natural resources Eco-tourism Livelihood Poaching

  6. Economics and which species to preserve • Initial (and narrow) view: single species valuations: • Grizzly bear …. $18.50 • Bald eagle …. $12.40 • Blue whale …. $9.30 • Bighorn sheep …. $8.60 • California sea otter $8.10 • Whooping crane …. $1.20 [Generally, these are annual willingness-to-pay per household] • Ecological economics view: focus on uncertainty! • Conventional economics view: benefits minus costs

  7. More complex views of biodiversity value • Biodiversity value and genetics • Weitzman (1992) proposed measuring biodiversity in relation to genetic distance • strategy that minimizes the loss from extinction is the one that permits one species of a closely related pair to go extinct • Another view concerns the probability of extinction and cost of improving the odds of increasing probability of survival • Noah’s ark problem (Metrick & Weitzman 1998) • combines these and previous approaches in order to select which species to preserve, given limited resources for conservation • when results are compared to real conservation expenditures, they differ significantly from what the model predicts

  8. Convention on Biological Diversity (1992) • Came into force in 1993 & ratified by 193 countries and signed by 168 (as of Nov 2010) • Funding for protected areas, national strategies, training & education programs & international co-operation • Interesting aspects: • Global Environment Facility (GEF) • Acting without ‘full knowledge’ .. “Noting also that where there is a threat of significant reduction of loss of biological diversity, lack of full scientific certainty should not be used as a reason for postponing measures to avoid or minimise such a threat.” • Application of the ‘Precautionary Principle’

  9. Economic Incentives and Poaching of the One-horned Indian Rhinoceros in Nepal

  10. Rhinoceros in Nepal’s Chitwan National Park • Background on rhino in Nepal • high level of poaching for horn • significant expenditures on protection • parks-people conflicts • substantial tourism benefits • some community management now • In situ policy approaches to conserve rhino: • Enhanced patrolling and enforcement within park • Community-based wildlife (CBWM) management with household level incentives

  11. Park-people conflicts are an issue ...

  12. a) Protected areas and incentives for rhino poaching • Following Milner-Gulland and Leader-Williams (1992): π = p - Pc (f + p) - c πis the financial gain from poaching rhino p is the price from the sale of one animal Pcis the probability of capture and conviction f is the fine for a conviction of poaching c is the cost for supplies to bag one animal

  13. Empirical results for rhino in Nepal • Before intensification of anti-poaching: Rs10,000 - .05 (Rs25,000 + Rs10,000) - Rs570 = Rs7680 (US$135) • After intensification of anti-poaching and increase in fine: Rs10,000 - .15(Rs100,000 + Rs10,000) - Rs570 = Rs -15,570 (- US$273) • Incentive for poaching has reversed .. • An alternative .. community-based eco-tourism ??

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