Predicting and Valuing Species Populations in an Integrated Economic/Ecosystem ModelEPA Grant Number: R830819
Title: Predicting and Valuing Species Populations in an Integrated Economic/Ecosystem Model
Investigators: Tschirhart, John , Finnoff, David
Institution: University of Wyoming , University of Central Florida
Current Institution: University of Wyoming
EPA Project Officer: Hahn, Intaek
Project Period: July 17, 2003 through February 28, 2005
Project Amount: $203,176
RFA: Decision-Making and Valuation for Environmental Policy (DMVEP) (2002) RFA Text | Recipients Lists
Research Category: Environmental Justice
Decision makers are continuously reminded that their policies directed toward economic activity impact ecosystems and that their policies directed toward ecosystems impact economic activity. The reciprocal impacts follow because important economic and ecosystem variables are jointly determined. Unfortunately, decision makers have very incomplete knowledge about the reciprocity; therefore, they cannot reasonably determine how economic welfare will be affected by poorly understood ecosystem impacts. Basic indicators of ecosystem impacts are changes in species populations. The threefold objective is to: 1) predict how species’ populations in an ecosystem are changed by economic activity; 2) value these population changes; and 3) predict how the population changes impact economic activity. The objective will be accomplished by using a new, tightly integrated economic/ecological model.
This new approach has three components: 1) construct a computable general equilibrium ecosystem model (GEEM) using individual plant and animal optimizing behavior to predict population dynamics of many interacting species; 2) combine GEEM with a computable general equilibrium (CGE) economic model to obtain one seamless, integrated bioeconomic model; and 3) gather ecological and economic data for application to a real ecosystem/economy. A marine ecosystem in the Eastern Bering Sea and the Alaskan economy provide the application. This ecosystem contains some of the world’s largest fisheries in addition to endangered and keystone species, and the economy significantly depends on biological resources.
Simultaneous predictions are obtained for economic variables including prices, quantities, investment, and incomes and profits for consumers and firms, and for ecological variables including species populations and biomass transfers between predators and prey. Obtaining changes in total biomass and biodiversity can be done using population changes. Valuing population changes depends on which of three categories a species falls into: 1) for a harvested species (e.g., fish), market values can be applied; 2) for a high-profile species (e.g., sea otter), existing results from contingent valuation studies that ask how much consumers are willing to pay for a change in population can be applied; and 3) for a low-profile species (e.g., plankton at the base of the food web), its value in the ecosystem can be converted to dollars by using the derived demands from GEEM that species in categories 1) and 2) have for plankton.