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BIOL 381 > 9 - Valuing Ecosystems > Flashcards

9 - Valuing Ecosystems Flashcards

1
Q

What is neoclassical economics

A

Theory of economics that explains market prices in terms of consumer preferences for units of particular commodities
Buyers desire the lowest possible price, whereas sellers desire the highest possible price = results in the “right” quantities of commodities being bought and sold

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2
Q

Four assumptions of the neoclassical theory

A
  1. Resources are infinite or substitutable
  2. Long-term effects should be discounted
  3. Costs and benefits are internal (no externalities)
  4. Growth is good
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3
Q

The assumptions of the neoclassical theory have…

A

massive environmental implications

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4
Q

Why aren’t resources infinite or substitutable

A

Earth is a closed system

Even renewable resources can be used quicker than they can be replenished

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5
Q

What is the tragedy of the commons

A

Analogy showing how self-interested individuals can end up destroying a resource they all depend on
Each individual acts independently according to their best interest and contrary to the common good by depleting a resource

Slide 8

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6
Q

Why are long-term effects discounted in the neoclassical theory

A

Market value of resource is discounted for future use (do not account for future market value)

Economically, it is best to gain value now instead of waiting

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7
Q

Costs and benefits in neoclassical economics vs real life

A

Neoclassical: all costs and benefits of goods or services are borne by the individuals involved in the transaction

Real life: we are all connected, and our decisions always impact others somehow

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8
Q

What are externalities

A

Costs or benefits of a transaction that involve people other than the buyer or the seller

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9
Q

Is growth good?

A

Commonly used metric for the health of an economy is its growth rate

But do we need more?

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10
Q

What is the single bottom line?

A

Generating profit is the only focus

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11
Q

What is the triple bottom line?

A

Make decisions accounting for social, economic and environmental wellbeing

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12
Q

Slides 15-17

A

Triple bottom line

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13
Q

What should we do about neoclassical economics?

A

Think beyond the single economic bottom line of profit

Triple bottom line!

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14
Q

How do we achieve the triple bottom line from an environmental perspective?

A

Assign a value to the goods and services we receive from the environment

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15
Q

What are ecosystem goods and services?

A

The benefits humans derive, directly or indirectly, from ecosystem functions. Often referred together simply as “ecosystem services”

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16
Q

What is ecosystem function

A

The capacity of natural processes and components to provide goods and services that satisfy human needs, either directly or indirectly

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17
Q

Four categories of ecosystem services

A
  • provisioning
  • regulating
  • cultural
  • supporting
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18
Q

What is provisioning ecosystem service? E.g.

A

The delivery of products that we directly use

e.g. food, water, medicine

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19
Q

What are regulating ecosystem services? E.g.

A

Services provided that regulate our environment

e.g. flood prevention, CO2 sequestration

20
Q

What are cultural ecosystem services

A

“Non-material” benefits that enrich the human experience

21
Q

What are supporting ecosystem services? E.g.

A

Ecosystem processes needed to support life and all other ecosystem services

e.g. primary productivity, nutrient cycling

22
Q

Examples of provisioning services*

A

Food, freshwater, fuelwood, fiber, biochemicals, genetic resources

23
Q

Examples of regulating services

A

Climate regulation, disease regulation, water regulation, water purification, pollination

24
Q

Examples of cultural services

A

Spiritual and religious, recreation and ecotourism, aesthetic, inspirational, educational, sense of place, cultural heritage

25
Q

Examples of supporting services

A

Soil formation, nutrient cycling, primary production

26
Q

Slides 27-30

A

Ecosystem services and functions with examples

27
Q

What is ecosystem valuation

A

The assignment of economic value to an ecosystem or ecosystem services

28
Q

Ecosystem valuation often repesents:

A
  1. the monetary cost of replacing the ecosystem service
  2. the monetary value of the capital gained from the resource
29
Q

Types of estimations that need to be made to value natural capital

A
  • Estimating the values of the Earth’s natural capital: monetary worth of ecosystem services
  • Estimating nonuse values: existence value, aesthetic value, bequest or option value
30
Q

What is bequest or option value?

A

Willingness to pay to protect some forms of natural capital for future generations

31
Q

What is capital?

A

Goods and services of economic value; resources that can be used to produce goods

32
Q

What is social vs natural capital in traditional/neoclassical economics

A

Social: the value of relationships between people

Natural: the summation of all ecosystem services on Earth, available to us for free

33
Q

Natural capital, human capital and manufactured capital in ecological economics

A

Natural: resources and services provided by the Earth’s natural processes

Human: people’s physical and mental talents; includes the “social capital” from traditional economics

Manufactured: tools and materials

34
Q

Slide 36, 37

A

Economics recap

35
Q

Things we must estimate when valuing natural capital and pollution control

A
  • present and future values of a resource or ecosystem service
  • optimum levels of pollution control and resource use
36
Q

What is the marginal cost of resource production?

A

Cost of removal goes up with each additional unit taken

Slide 39 graph

37
Q

What is optimum level of resource use? Pollution cleanup?

A

Resource use: intersection of supply and demand curve (point at which removing more resources is not worth the marginal cost)

Pollution cleanup: when cost of removing pollutants exceeds harmful costs of pollution

38
Q

Value of timber production in Alberta comes from… What is the number?

A

From pulp, saw-logs, veneer

$6.2 billion over 20 years, based of simulated harvest activities based on a preference for 80+ year old trees

39
Q

Ecosystem valuation of carbon sequestration in AB?

A
  • How much C is stored in forests
  • Valued as the market cost of C as defined by the AB government ($20/tonne in 2018)
  • value of forest carbon in AB would be $144 billion based on current storage (4.8 billion tonnes)
40
Q

Two solutions to neoclassical economics

A
  • Ecological economics
  • sustainable economics

Slide 42

41
Q

What is sustainable economics

A
  • a sustainable economy can be maintained over time without causing a depletion of its natural capital
  • “wise use” of renewable resources, harvested at rates equal to or less than their productivity
  • “economic development” = progress made toward a sustainable economic system
42
Q

Slide 46

A

Supply and demand

43
Q

Guidelines to a cost-benefit analysis

A
  • state all assumptions used
  • include estimates of the ecosystem services
  • estimate short- and long-term benefits for all population groups
  • compare costs and benefits of alternative courses of action
44
Q

How can we use resources more sustainably while employing economics?

A
  • include the harmful environmental and health costs of producing goods and services in their market price (full cost accounting)
  • subsidizing environmentally beneficial goods and services
  • taxing pollution and waste instead of wages and profits
45
Q

What is full-cost pricing? Vs?

A

Includes estimated costs of harmful environmental and health effects of production

Versus market price; does not include indirect, external, or hidden costs

46
Q

Slides 50-55

A

Global value of ecosystem services

BIOL 381 (13 decks)

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