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Evaluating the Return in Ecosystem Services from Investment in Public Land Acquisitions

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  • Kovacs, Kent F.
  • Polasky, Stephen
  • Keeler, Bonnie
  • Pennington, Derric
  • Nelson, Erik
  • Plantinga, Andrew J.
  • Taff, Steven J.

Abstract

We evaluate how land use change and the value ecosystem services affect the decision to invest in public land acquisitions. Our application is for the state of Minnesota, and we consider the acquisitions by Department of Natural Resources over the last two decades. We calculate a return on investment (ROI) in conservation showing the increase in the value of ecosystem goods and services from public lands per dollar spent on acquisition. A spatially-explicit modeling tool, the Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST), quantifies how changes in land use and land cover (LULC) influence the provision and value of a suite of ecosystem services: carbon sequestration, timber production, water quality, habitat quality, and outdoor recreation. The present value of the difference in the value of ecosystem services from landscapes with and without acquisitions in 1992 and for the econometrically modeled future landscapes in 2022 and 2052 is the return from the investment in the acquisitions. We find a limited number of acquisitions have a ROI above one. Also, we observe the estimated return in the acquisitions is much more influenced by the economic value of ecosystem services than the projected development threat to the acquisitions.

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Bibliographic Info

Paper provided by Agricultural and Applied Economics Association in its series 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington with number 124660.

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Date of creation: 2012
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Handle: RePEc:ags:aaea12:124660

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Keywords: Environmental Economics and Policy; Land Economics/Use;

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  1. Newburn, David A. & Berck, Peter, 2006. "Modeling suburban and rural residential development beyond the urban fringe," CUDARE Working Paper Series 1008R, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy, revised May 2006.
  2. Stephen Polasky & Erik Nelson & Derric Pennington & Kris Johnson, 2011. "The Impact of Land-Use Change on Ecosystem Services, Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(2), pages 219-242, February.
  3. Lubowski, Ruben & Plantinga, Andrew & Stavins, Robert, 2007. "What Drives Land Use Change in the United States? A National Analysis of Landowner Decisions," Working Paper Series rwp07-059, Harvard University, John F. Kennedy School of Government.
  4. Richard B. Howarth, 2009. "Discounting, Uncertainty, and Revealed Time Preference," Land Economics, University of Wisconsin Press, vol. 85(1), pages 24-40.
  5. Ron Johnston, 2005. "On journals," Environment and Planning A, Pion Ltd, London, vol. 37(1), pages 2-8, January.
  6. Lubowski, Ruben N. & Plantinga, Andrew J. & Stavins, Robert N., 2006. "Land-use change and carbon sinks: Econometric estimation of the carbon sequestration supply function," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 135-152, March.
  7. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.
  8. Elena G. Irwin, 2002. "Interacting agents, spatial externalities and the evolution of residential land use patterns," Journal of Economic Geography, Oxford University Press, vol. 2(1), pages 31-54, January.
  9. Lewis, David J. & Provencher, Bill & Butsic, Van, 2009. "The dynamic effects of open-space conservation policies on residential development density," Journal of Environmental Economics and Management, Elsevier, vol. 57(3), pages 239-252, May.
  10. Johnston, Robert J. & Thomassin, Paul J., 2010. "Willingness to Pay for Water Quality Improvements in the United States and Canada: Considering Possibilities for International Meta-Analysis and Benefit Transfer," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(1), February.
  11. Robert J. Johnston & Elena Y. Besedin & Richard Iovanna & Christopher J. Miller & Ryan F. Wardwell & Matthew H. Ranson, 2005. "Systematic Variation in Willingness to Pay for Aquatic Resource Improvements and Implications for Benefit Transfer: A Meta-Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 53(2-3), pages 221-248, 06.
  12. Van Houtven, George & Powers, John & Pattanayak, Subhrendu K., 2007. "Valuing water quality improvements in the United States using meta-analysis: Is the glass half-full or half-empty for national policy analysis?," Resource and Energy Economics, Elsevier, vol. 29(3), pages 206-228, September.
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