direct economic value of biodiversity -...
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Direct Economic Value of Biodiversity
Brook Milligan
Department of BiologyNew Mexico State University
Las Cruces, New Mexico [email protected]
Fall 2009
Brook Milligan Direct Economic Value of Biodiversity
Economic Markets
Adam Smith
assumption: economic transactions benefit both partiesindividuals acting in self interest yield a prosperous society
Economic issues associated with the environment
not all costs/benefits included within a transactionexternalities: hidden costs and benefitsTragedy of the Commons
Potential solutions
convert external costs to internal onesgive economic value to current external costscreate ownership rights to resources to create long-terminterests
Brook Milligan Direct Economic Value of Biodiversity
Economic Markets
Adam Smith
assumption: economic transactions benefit both partiesindividuals acting in self interest yield a prosperous society
Economic issues associated with the environment
not all costs/benefits included within a transactionexternalities: hidden costs and benefitsTragedy of the Commons
Potential solutions
convert external costs to internal onesgive economic value to current external costscreate ownership rights to resources to create long-terminterests
Brook Milligan Direct Economic Value of Biodiversity
Economic Markets
Adam Smith
assumption: economic transactions benefit both partiesindividuals acting in self interest yield a prosperous society
Economic issues associated with the environment
not all costs/benefits included within a transactionexternalities: hidden costs and benefitsTragedy of the Commons
Potential solutions
convert external costs to internal onesgive economic value to current external costscreate ownership rights to resources to create long-terminterests
Brook Milligan Direct Economic Value of Biodiversity
National Economies
Often sustained by environmental degradation
Gross domestic product (GDP): measure of economicproductivity
Examples
Costa RicaAustraliaRussia and the “Stans”
Brook Milligan Direct Economic Value of Biodiversity
Aral Sea
Brook Milligan Direct Economic Value of Biodiversity
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
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
Aral Sea
Brook Milligan Direct Economic Value of Biodiversity
Aral, Kazakhstan
Brook Milligan Direct Economic Value of Biodiversity
Aral, Kazakhstan
Brook Milligan Direct Economic Value of Biodiversity
Moynaq, Uzbekistan
Brook Milligan Direct Economic Value of Biodiversity
Direct Economic Benefit of Aral Sea
Aral Sea fishing industry
employment: 40,000–60,000production: one-sixth of the Soviet Union’s entire fish catchfish processing industry
Muskrat trapping
tributary deltas: Amu Darya and Syr Daryayield: 500,000 muskrat pelts annually
Brook Milligan Direct Economic Value of Biodiversity
Cause of Aral Sea Decline
Water project development
Canal systemQaraqum Canal, Turkmenistan
largest irrigation and water supply canal in the world1,375km in length13km3 water carried annuallynavigable over much of its length
almost 50% of water escapeslakes and ponds created along the canalrise in groundwater levelswidespread soil salinization
Russian cotton production
Uzbekistan a major world cotton producer, but . . .increased soil salinityincreased water requirementsincreased health problems
Brook Milligan Direct Economic Value of Biodiversity
Cause of Aral Sea Decline
Water project development
Canal systemQaraqum Canal, Turkmenistan
largest irrigation and water supply canal in the world1,375km in length13km3 water carried annuallynavigable over much of its lengthalmost 50% of water escapeslakes and ponds created along the canalrise in groundwater levelswidespread soil salinization
Russian cotton production
Uzbekistan a major world cotton producer, but . . .increased soil salinityincreased water requirementsincreased health problems
Brook Milligan Direct Economic Value of Biodiversity
Economic Valuation of Natural Resources
Types of valuationDirect use value: value of harvested products put into humanuse
productive use value: marketed harvestsconsumptive use value: non-marketed harvests, localconsumption
In situ value: value of unharvested resources put to other use
indirect use value: use not involving harvestfuture value or option valueexistence value
Brook Milligan Direct Economic Value of Biodiversity