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Economic land use, ecosystem services and microfounded species dynamics

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  • Eichner, Thomas
  • Pethig, Rudiger

Abstract

In an integrated economy-ecosystem model humans choose their land use and leave the residual land as habitat for three species forming a food chain. The size of habitat determines the diversity and abundance of species. That biodiversity generates, in turn, a flow of ecosystem services with public-good characteristics for human consumption. The ecosystem submodel yields (rather than assumes!) population growth functions with each species’ growth depending on the size of habitat. First the relationship between habitat and species growth (sustenance, decline and extinction) is explored. The laissez-faire economy is shown to result in an underprovision of habitat, making the case for land use restrictions for nature protection. The optimal land use policy is characterized with full regard of ecosystem dynamics. Finally, labor-augmenting technical change is introduced to generate ever increasing pressure towards further habitat reductions. In the laissez-faire economy the habitat is consequently squeezed to zero in the long-run so that all species are doomed. Social optimality demands, however, to refrain from using all land for economic purposes despite ever-growing labor productivity.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 52 (2006)
Issue (Month): 3 (November)
Pages: 707-720

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Handle: RePEc:eee:jeeman:v:52:y:2006:i:3:p:707-720

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Web page: http://www.elsevier.com/locate/inca/622870

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  1. Jérôme Chave & Simon Levin, 2003. "Scale and Scaling in Ecological and Economic Systems," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(4), pages 527-557, December.
  2. Swanson, Timothy M, 1994. "The Economics of Extinction Revisited and Revised: A Generalised Framework for the Analysis of the Problems of Endangered Species and Biodiversity Losses," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 800-821, Supplemen.
  3. Thomas Eichner & Rüdiger Pethig, 2003. "A Microfoundation of Predator-Prey Dynamics," CESifo Working Paper Series 950, CESifo Group Munich.
  4. Partha Dasgupta & Karl-Göran Mäler, 2003. "The Economics of Non-Convex Ecosystems: Introduction," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(4), pages 499-525, December.
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Cited by:
  1. Angela Münch, 2010. "Agri-Environmental Schemes and Grassland Biodiversity: Another Side of the Coin," Jena Economic Research Papers 2010-026, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  2. Thomas Christiaans & Thomas Eichner & Rüdiger Pethig, 2005. "Optimal pest control in agriculture," Volkswirtschaftliche Diskussionsbeiträge 122-05, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
  3. Walls, Margaret & Riddle, Anne, 2012. "Biodiversity, Ecosystem Services, and Land Use: Comparing Three Federal Policies," Discussion Papers dp-12-08, Resources For the Future.
  4. Hertzler, Greg, 2008. "Dynamic Contingent Valuation and Choice Modelling for Ecosystem Services," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6024, Australian Agricultural and Resource Economics Society.
  5. Chen, Yong & Irwin, Elena G. & Jayaprakash, Ciriyam, 2009. "Dynamic modeling of environmental amenity-driven migration with ecological feedbacks," Ecological Economics, Elsevier, vol. 68(10), pages 2498-2510, August.
  6. Thomas Christiaans & Thomas Eichner & Rüdiger Pethig, 2005. "A micro-level ‘consumer approach’ to species population dynamics," Volkswirtschaftliche Diskussionsbeiträge 123-05, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.

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