Direct Economic Value of Biodiversity Brook Milligan Department of - - PowerPoint PPT Presentation

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Direct Economic Value of Biodiversity Brook Milligan Department of Biology New Mexico State University Las Cruces, New Mexico 88003 brook@nmsu.edu Fall 2009 Brook Milligan Direct Economic Value of Biodiversity Economic Markets Adam Smith

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Direct Economic Value of Biodiversity

Brook Milligan

Department of Biology New Mexico State University Las Cruces, New Mexico 88003 brook@nmsu.edu

Fall 2009

Brook Milligan Direct Economic Value of Biodiversity

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Economic Markets

Adam Smith

assumption: economic transactions benefit both parties individuals acting in self interest yield a prosperous society

Brook Milligan Direct Economic Value of Biodiversity

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Economic Markets

Adam Smith

assumption: economic transactions benefit both parties individuals acting in self interest yield a prosperous society

Economic issues associated with the environment

not all costs/benefits included within a transaction externalities: hidden costs and benefits Tragedy of the Commons

Brook Milligan Direct Economic Value of Biodiversity

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Economic Markets

Adam Smith

assumption: economic transactions benefit both parties individuals acting in self interest yield a prosperous society

Economic issues associated with the environment

not all costs/benefits included within a transaction externalities: hidden costs and benefits Tragedy of the Commons

Potential solutions

convert external costs to internal ones give economic value to current external costs create ownership rights to resources to create long-term interests

Brook Milligan Direct Economic Value of Biodiversity

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National Economies

Often sustained by environmental degradation Gross domestic product (GDP): measure of economic productivity Examples

Costa Rica Australia Russia and the “Stans”

Brook Milligan Direct Economic Value of Biodiversity

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Aral Sea

Brook Milligan Direct Economic Value of Biodiversity

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Aral Sea

Fourth largest inland saline body of water 68,000km2 in surface area 1,100km3 in volume

Brook Milligan Direct Economic Value of Biodiversity

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Aral Sea

Fourth largest inland saline body of water 68,000km2 in surface area 1,100km3 in volume Shrinking in size since 1960s 2004: 25% of original surface area, 5× increase in salinity 2007: 10% of original size, three lakes, 2 too salty for fish (3× seawater) Equivalent to draining Lakes Erie and Ontario

Brook Milligan Direct Economic Value of Biodiversity

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Aral Sea

Brook Milligan Direct Economic Value of Biodiversity

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Aral, Kazakhstan

Brook Milligan Direct Economic Value of Biodiversity

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Aral, Kazakhstan

Brook Milligan Direct Economic Value of Biodiversity

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Moynaq, Uzbekistan

Brook Milligan Direct Economic Value of Biodiversity

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Direct Economic Benefit of Aral Sea

Aral Sea fishing industry

employment: 40,000–60,000 production: one-sixth of the Soviet Union’s entire fish catch fish processing industry

Muskrat trapping

tributary deltas: Amu Darya and Syr Darya yield: 500,000 muskrat pelts annually

Brook Milligan Direct Economic Value of Biodiversity

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Cause of Aral Sea Decline

Water project development Canal system

Qaraqum Canal, Turkmenistan

largest irrigation and water supply canal in the world 1,375km in length 13km3 water carried annually navigable over much of its length

Brook Milligan Direct Economic Value of Biodiversity

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Cause of Aral Sea Decline

Water project development Canal system

Qaraqum Canal, Turkmenistan

largest irrigation and water supply canal in the world 1,375km in length 13km3 water carried annually navigable over much of its length almost 50% of water escapes lakes and ponds created along the canal rise in groundwater levels widespread soil salinization

Russian cotton production

Uzbekistan a major world cotton producer, but . . . increased soil salinity increased water requirements increased health problems

Brook Milligan Direct Economic Value of Biodiversity

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Economic Valuation of Natural Resources

Types of valuation

Direct use value: value of harvested products put into human use

productive use value: marketed harvests consumptive use value: non-marketed harvests, local consumption

In situ value: value of unharvested resources put to other use

indirect use value: use not involving harvest future value or option value existence value

Brook Milligan Direct Economic Value of Biodiversity