Biodiversity conservation, loss of natural capital and interest rates
AbstractIt is argued that there is neither regular relationship between changes in the level of the market rate of interest and variations in the rate of biodiversity loss nor does such a regular relationship occur between alterations in the market rate of interest and changes in the rate of natural resource extraction. However, some texts suggest otherwise. Microeconomic examples are given in which a rise in the market rate of interest results in increased biodiversity loss and others in which it does not. It is also posited that the rate of biodiversity loss (as well as the rate of natural resource extraction) tends to rise with the level of aggregate investment and aggregate economic activity. It is demonstrated, using macroeconomic models, that the market rate of interest can increase or decrease with a rise in aggregate investment and also with an increase in the level of aggregate economic activity. Therefore, changes in biodiversity loss (and in the rate of natural resource extraction) are independent of variations in the market rate of interest in macroeconomic models.
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Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 70 (2011)
Issue (Month): 12 ()
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Web page: http://www.elsevier.com/locate/ecolecon
Biodiversity loss; Natural capital; Natural resource depletion; Sustainable development;
Find related papers by JEL classification:
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics
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- Tisdell, Clement A., 2012. "Biodiversity Change and Sustainable Development: New Perspectives," Economics, Ecology and Environment Working Papers, University of Queensland, School of Economics 125211, University of Queensland, School of Economics.
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