Measuring and Implementing Ecological Economics

Gary FlomenhoftGund Institute4-15-03

HWI vs GDP/CAP PPP y = 17.117Ln(x) - 101.27

R2 = 0.8012

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GDP-CAP PPP

HWI

HDI v GDP/CAP PPPy = 14.792Ln(x) - 55.199

R2 = 0.8663

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GDP/CAP PPP

HDI

Fundamental

Human Needs

Being

(qualities)

Having

(things)

Doing

(actions)

Interacting

(settings)

Subsistence physical and

mental health

food, shelter

work

feed, clothe,

rest, work

living environment,

social setting

Protection care,

adaptability

autonomy

social security,

health systems,

work

co-operate,

plan, take care

of, help

social environment,

dwelling

Affection respect, sense

of humour,

generosity,

sensuality

friendships,

family,

relationships

with nature

share, take care of,

make love, express

emotions

privacy,

intimate spaces

of togetherness

Understanding critical

capacity,

curiosity, intuition

literature,

teachers, policies

educational

analyse, study,meditate

investigate,

schools, families

universities,

communities,

Participation receptiveness,

dedication,

sense of humour

responsibilities,

duties, work,

rights

cooperate,

dissent, express

opinions

associations,

parties, churches,

neighbourhoods

Leisure imagination,

tranquillity

spontaneity

games, parties,

peace of mind

day-dream,

remember,

relax, have fun

landscapes,

intimate spaces,

places to be alone

Creation imagination,

boldness,

inventiveness,

curiosity

abilities, skills,

work,

techniques

invent, build,

design, work,

compose,

interpret

spaces for

expression,

workshops,

audiences

Identity sense of

belonging, self-

esteem,

consistency

language,

religions, work,

customs,

values, norms

get to know

oneself, grow,

commit oneself

places one

belongs to,

everyday

settings

Freedom autonomy,

passion, self-esteem,

open-mindedness

equal rights dissent, choose,

run risks, develop

awareness

anywhere

The Valuation of Ecosystem Goods and The Valuation of Ecosystem Goods and ServicesServices

Matthew A. Wilson

Gund Institute for Ecological Economics&

School of Business Administration

Email: Wilson@bsad.uvm.edu

ECOSYSTEM SERVICES

Gas regulation

Climate regulation

Disturbance regulation

Water regulation

Water supply

Erosion control and sediment retention

Soil formation

Nutrient cycling

Waste treatment

Pollination

Biological control

Refugia

Food production

Raw materials

Genetic resources

Recreation

Cultural

ECOSYSTEM FUNCTIONS

Regulation of atmospheric chemical composition.

Regulation of global temperature, precipitation, and other biologically mediatedclimatic processes at global, regional, or local levels. Capacitance, damping and integrity of ecosystem response to environmental fluctuations such as sea level rise.

Regulation of hydrological flows.

Storage and retention of water.

Retention of soil within an ecosystem.

Soil formation processes.

Storage, internal cycling, processing, and acquisition of nutrients.

Recovery of mobile nutrients and removal or breakdown of excess or xenic nutrients and compounds. Movement of floral gametes.

Trophic-dynamic regulations of populations.

Habitat for resident and transient populations.

That portion of gross primary production extractable as food.

That portion of gross primary production extractable as raw materials.

Sources of unique biological materials and products.

Providing opportunities for recreational activities.

Providing opportunities for non-commercial uses.

List of Ecosystem Goods and ServicesList of Ecosystem Goods and Services

Adapted from Costanza et. Al. (1997) “The Value of the World’s Ecosystem Services and Natural Capital” Nature, vol. 387 pp.253-260

•Avoided Cost (AC): services allow society to avoid costs that would have been incurred in the absence of those services; flood control (barrier islands) avoids property damages, and waste treatment by wetlands avoids incurred health costs.

•Replacement Cost (RC): services could be replaced with man-made systems; natural waste treatment can be replaced with costly treatment systems.

•Factor Income (FI): services provide for the enhancement of incomes; water quality improvements increase commercial fisheries harvest and thus, incomes of fishermen.

•Travel Cost (TC): service demand may require travel, whose costs can reflect the implied value of the service; recreation areas attract distant visitors whose value placed on that area must be at least what they were willing to pay to travel to it.

• Hedonic Pricing (HP): service demand may be reflected in the prices people will pay for associated goods: For example, housing prices along the shore of pristine freshwater lakes tend to exceed the prices of inland homes.

•Contingent Valuation (CV): service demand may be elicited by posing hypothetical scenarios that involve some valuation of alternatives; people would be willing to pay for increased water quality in freshwater lakes and streams.

•Marginal Product Estimation (MP): Service demand is generated in a dynamic modeling environment using production function (i.e., Cobb-Douglas) to estimate value of output in response to corresponding material input.

•Group Valuation (GV): This approach is based on principles of deliberative democracy and the assumption that public decision making should result, not from the aggregation of separately measured individual preferences, but from public debate.

Techniques for Valuing Ecosystem ServicesTechniques for Valuing Ecosystem Services

Full World or Empty World?

Source:

Ecological Economics Principles & Applications,

Farley and Daly

Source:

Center for

A New

American

Dream

If World consumption = US: Need 4 more planets

Herman Daly’s Policies for a steady-state economy

Criteria:

1. Constant stock of humans

2. Constant stock of goods for providing services and meeting needs.

3. Sufficient and sustainable level of 1&2

4. Throughput reduced to the lowest level

Social Institutions

Constant PopulationTransferable birth licenses (China 1 child policy)(Demographic Trend)

Population growth

China population-1.22B-one child policy

Constant GoodsDepletion quotas (Fisheries, hunting licenses)

Pollution quotas (vehicle emissions, SO2)

Fishing quotas

Lease 15  Tons19 Tons8  Tons2  Tons25 Tons1 Ton North Sea CodHaddockWhitingMegrimMonksSkate Macduff Fish Selling               Lease 7 Tons2 Tons2 Tons West Coast HaddockMonkMegrim Macduff Fish Selling             

VERMONT HUNTING, FISHING AND TRAPPING DATES

2001 SEASON (All Dates Inclusive)FISHINGTrout & Landlocked Salmon April 14– Oct 28Trout & Landlocked Salmon (Lake Champlain) No Closed SeasonLargemouth & Smallmouth Bass June 9 – Nov 30Catch & Release – Lakes and Ponds April 14– June 8Pickerel, N. Pike, Yellow Perch No Closed SeasonWalleye (Lake Champlain, Lake Carmi & certain areas of Lamoille & Missisquoi Rivers)May 6, 2000 - March 15, 2001May 5, 2001- March 15, 2002(All other waters except Connecticut River) No Closed SeasonSmelt May 26, 2001 - March 31, 2002Smelt (Lake Champlain) No Closed SeasonBIG GAME HUNTINGDeer (Bow & Arrow Only) Oct 6 –28Youth Deer Day Nov. 4, 2001Deer (16 Day regular season) Nov. 10 – Nov. 25Deer (Muzzleloader or Bow & Arrow Only) Dec 1 – 9Black Bear Sept. 1 – Nov. 14Turkey Spring May 1 – 31Fall seasons vary by wildlife management units

SMALL GAME HUNTINGHare, Rabbit Sept. 30, 2000 – March 11, 2001 & Sept. 29, 2001 – March 10, 2002Gray Squirrel Sept. 1 – Dec. 31Bobwhite Quail No Closed SeasonRuffed Grouse (Partridge) Sept. 29 – Dec. 31Woodcock Set AnnuallyPheasant Sept. 29 – Dec. 31Crow March 14 – April 30 & Aug. 16 – Oct 29FURBEARER HUNTINGBobcat Jan. 10 – Feb. 7Red & Gray Fox Oct. 27, 2001 – Feb. 10, 2002Raccoon Oct. 13 – Dec. 31Muskrat March 20 – April 19Coyote No Closed SeasonFURBEARER TRAPPINGMink, Skunk, Red & Gray Fox, Raccoon, Coyote Oct. 27 – Dec. 31Otter Oct. 27 – Dec. 31(Otter Continued During Beaver Season)Muskrat 4th Sat. in Oct. – April 19Fisher, Bobcat Dec. 1 – 16Beaver TO BE ANNOUNCEDMarten No Open SeasonWATERFOWL HUNTINGSet Annually

Read the Guide to Hunting, Fishing & Trapping Laws for more information and exceptions.Issued June, 2000 by the Vermont Fish and Wildlife Department, Waterbury, Vermont

CFC Phaseout Schedules: Allowed Production

and Consumption for Developed Countries

(percent of baseline)

1987 1990 1992 1990 1994

Original Montreal Protocol

London Montreal Protocol

Copenhagen Montreal Protocol

U.S. Clean Air Act Amendments

European Community Schedule

1990 100%        

1991 100% 100%   85%  

1992 100% 100%   80%  

1993 80% 80%   75% 50%

1994 80% 80% 25% 25% 15%

1995 80% 50% 25% 25% 0%

1996 80% 50% 0% 0%  

1997 80% 15%      

1998 80% 15%      

1999 50% 15%      

2000 50% 0%      

CFC Quotas

Kyoto Protocol

Kyoto Protocol

DistributionMinimum and maximum incomeAll corporate profits distributed to stockholders

Minimum: Speenhamland, minimum income Experiments, European social democracy,Welfare, dole, unemployment insurance. Alaska oil dividend.

Maximum: European marginal tax rates, USTax rates in 1950s.

21 years of dividends2002 $1,540.762001 $1,850.282000 $1,963.861999 $1,769.841998 $1,540.881997 $1,296.541996 $1,130.681995 $990.301994 $983.901993 $949.461992 $915.841991 $931.341990 $952.631989 $873.161988 $826.931987 $708.191986 $556.261985 $404.001984 $331.291983 $386.151982 $1,000.00

Shareholder Equity-dividends (ALASKA PF)

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Alaska has the smallest gap between rich and poor of any state, according to figures released Wednesday by the U.S. Census Bureau. ALASKA Dividend checks help make for more equal distribution.