Readings

1. Readings Invasions • Pimentel et al. 2000. Environmental and economic costs of nonindigenous species in the United States. BioScience 50:53-65. Environmental Economics • R. Costanza et al.1997.The Value of the World's Ecosystem Services and Natural Capital. Nature 387:253-260.

2. Resources • Steve Hackett (HSU) links to economic and environmental economic websites: http://www.humboldt.edu/~envecon/resources.html • EPA’s national center for Environmental Economics: http://yosemite1.epa.gov/ee/epa/eed.nsf/pages/homepage

3. Outline • Introduction to environmental economics • “free market” economics • Valuing non-market commodities • Approaches to ameliorating market failure • Case study: guest speaker Becky Niell • Simulation model of vegetation dynamics linking costs, benefits, and vegetation

4. Environmental economics • What is it? • What does it include?

5. Environmental economics • What is it? • Expansion of traditional economics to include non-market values • Risk assessment and cost-benefit analyses • What does it include? • Includes non-market values (esthetic, cultural, emotional), ecosystem services, environmental health and safety concerns, sustainable development, carbon accounting etc.

6. “Free Market” economics • Market provides mechanism to allocate resources to best (highest valued) uses • Prices provide information about values • Ideally, resources are allocated in a way that optimizes efficiency • However, does not always optomize for environmental resources: • Information is incomplete, some resources have no market, future discounting devalues conservation, “tragedy of the commons”

7. Valuing environmental resources • What are environmental (non-market) values?

8. Valuing environmental resources • What are some environmental values? • Health, wellbeing • Intrinsic values of wilderness and wildlife • “Ecosystem services” • “natural capital” • Future potential values (e.g. new discoveries)

9. How to place values on resources? • $ value on non-direct costs and benefits • Estimate cost to use technology to perform actions conducted by ecosystems (e.g. water or air filtration) • Estimate costs of amelioration (e.g. healthcare costs VS prevention of environmental pollution) • Surveys: ask people what things are worth (“what would you pay to maintain ecosystem X”)

10. How to place values on resources? • $ value on non-direct costs and benefits • Estimate cost to use technology to perform actions conducted by ecosystems (e.g. water or air filtration) • Estimate costs of amelioration (e.g. healthcare costs VS prevention of environmental pollution) • Surveys: ask people what things are worth (“what would you pay to maintain ecosystem X”)

11. Non-market values in range and forest ecosystems • What are some values that might apply? How would you account for them?

12. “Market Failure” caused by non-market resources • Market failure= non-optimal allocation of resources. • How can it be remedied? Account for non-monetary values, or bypass market mechanism and impose policy.

13. Can non-monetary values be accounted for by traditional economics?

14. Can non-monetary values be accounted for by traditional economics? • Yes: we can translate all values into common metric ($) and can assess using free-market economics

15. Can non-monetary values be accounted for by traditional economics? • No: some things have no $ value. Some decisions (environmental and social policy) must be made outside the realm of the market • Yes: we can translate all values into common metric ($) and can assess using free-market economics

16. Case study: modeling costs, management, and vegetation • Simulation model predicting outcomes of various management strategies • non-market values (e.g. environment values) must be considered external to the model to make management decisions