Integrating Ecology and Economics

With my viva voce just over two weeks ago I really should be concentrating all my efforts on ensuring that I’m adequately prepared for the oral defence of my PhD thesis. I’m doing OK, but I’m a little distracted by my impending move to the Center for Systems Integration and Sustainability at Michigan State University. There I’ll be working on a project that will take a systems approach to develop an integrated ecological-economic model for the management of a forest landscape in Michigan’s Upper Peninsula.

I touched on some of the difficulties of integrated ecological-economic modelling in my thesis:

The difficulties of integrating ecological and economic theory into a model or framework for study have been outlined by Svedin and Bockstael et al.. These authors highlight some common points regarding time and space scales. First, the spatial boundaries on systems’ analysis may not coincide, as economists place their boundaries according to the extent of the market, whilst ecologists typically use physical features. Second, the temporal extents of study may differ vastly as economists do not believe they can predict too far into the future, but ecologists are often more ambitious. Potentially the biggest stumbling block for integrating economic and ecological approaches however, is the difference in the disciplines’ fundamental approach and philosophy. First, economists disregard things that they cannot value financially but ecologists believe that a theoretical framework must take account of the most important aspects of a problem (regardless of financial value – Bockstael et al.). As ecosystem processes are very difficult (if not impossible) to value in financial terms, these two standpoints are hard to reconcile. These differences in approach, and the difference in the systems of study, result in different “units of measurement, populations of interest, handling of risk and uncertainty and paradigms of analysis” when modelling (Bockstael et al. p.146). Svedin discusses the potential of using energy or information as fundamental units that might be used in common by the two disciplines. However, Bockstael et al. point out that reducing systems to the lowest possible common denominator has often simply resulted in larger black box models, compromising individual model modules’ integrity. Svedin possibly realised this when he concluded that integration should be context-dependent for the study at hand, and that the underlying philosophies of different disciplines must be remembered when attempting integration.

One method that has been developed to address these issues is economic valuation of ecosystem services. A recent example of this sort of exercise was undertaken for the trees of New York City. Designed for use in urban areas, the USFS Stratum model uses a tree growth model coupled with data on the regional climate, building construction and energy use patterns, fuel mix for energy production, and air pollutant concentrations to estimate environmental benefits and costs as well as effects on property values. Alongside the economic value of the trees (the annual monetary value of the benefits provided and costs accrued), Stratum estimates the resource’s structure (species composition, extent and diversity), function (the environmental & aesthetic benefits trees afford the community), and resource management needs (evaluations of diversity, canopy cover, and pruning needs). According to Stratum the nearly 600,000 trees lining the streets of New York City are worth $122 million – and this doesn’t include the 4.5 million trees in parks and on private land.

As the outputs of Stratum suggest, there are both monetary and non-monetary forms of ecosystem valuation, both with pros and cons. One notable form of monetary ecosystem valuation is non-market valuation. Non-market valuation attempts to estimate the value of goods and services that do not have observable market values. In the forthcoming project at CSIS we hope to use non-market valuation as a complementary approach to more traditional market valuation analysis to better examine economic trade-offs between various ecosystem services and ensure the development of sustainable management plans. In developing the model in this way we will be exploring ways to overcome the fundamental differences between economic and ecological theory.

Svedin, U. (1985) Economic and ecological theory: differences and similarities In: Hall, D. O., Myers, N. and Margaris, N. S. Economics of ecosystems management:31-39 Dordrecht: Dr W. Junk Publishers

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