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More than total economic value: How to combine economic valuation of biodiversity with ecological resilience

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  • Admiraal, Jeroen F.
  • Wossink, Ada
  • de Groot, Wouter T.
  • de Snoo, Geert R.

Abstract

The assessment of total economic value has become a pragmatic and popular approach in nature valuation, yet criticisms have been raised. One major point of critique is that total economic value bases the monetary value of ecosystems purely on the flow of human benefits of services of ecosystems and consequently ignores questions of sustainable use of natural capital per se. This paper explains why total economic value by itself is in principle an inadequate concept to guide sustainable use of ecosystems and gives an overview of essential ecological theory that needs to be taken into account in addition to total economic value to fully include ecosystem sustainability. The paper concludes with a framework for combining ecological theory with economic valuation. The key elements here are theoretical ecological insights about ecosystem resilience and portfolio theory which offers an economic perspective on investment in biodiversity. Portfolio theory puts total economic value in a framework where investment in biodiversity is expanded to cover functional diversity and mobile link species in order to maintain ecosystem resilience and so fosters sustainable use of ecosystems.

Suggested Citation

  • Admiraal, Jeroen F. & Wossink, Ada & de Groot, Wouter T. & de Snoo, Geert R., 2013. "More than total economic value: How to combine economic valuation of biodiversity with ecological resilience," Ecological Economics, Elsevier, vol. 89(C), pages 115-122.
  • Handle: RePEc:eee:ecolec:v:89:y:2013:i:c:p:115-122
    DOI: 10.1016/j.ecolecon.2013.02.009
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    References listed on IDEAS

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    1. Felix Schläpfer & Michael Tucker & Irmi Seidl, 2002. "Returns from Hay Cultivation in Fertilized Low Diversity and Non-Fertilized High Diversity Grassland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 89-100, January.
    2. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
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    4. Nunes, Paulo A. L. D. & van den Bergh, Jeroen C. J. M., 2001. "Economic valuation of biodiversity: sense or nonsense?," Ecological Economics, Elsevier, vol. 39(2), pages 203-222, November.
    5. Brian Walker & Leonie Pearson & Michael Harris & Karl-Göran Maler & Chuan-Zhong Li & Reinette Biggs & Tim Baynes, 2010. "Incorporating Resilience in the Assessment of Inclusive Wealth: An Example from South East Australia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 183-202, February.
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    Cited by:

    1. Valentinov, Vladislav, 2014. "K. William Kapp's theory of social costs: A Luhmannian interpretation," Ecological Economics, Elsevier, vol. 97(C), pages 28-33.
    2. Tobon Orozco, David & Molina Guerra, Carlos & Vargas Cano, John Harvey, 2016. "Extent of Expected Pigouvian Taxes and Permits for Environmental Services in a General Equilibrium Model with a natural capital constraint," BORRADORES DEPARTAMENTO DE ECONOMÍA 015258, UNIVERSIDAD DE ANTIOQUIA - CIE.
    3. Saner, Marc A. & Bordt, Michael, 2016. "Building the consensus: The moral space of earth measurement," Ecological Economics, Elsevier, vol. 130(C), pages 74-81.
    4. Kindler, Elisabeth, 2016. "A comparison of the concepts: Ecosystem services and forest functions to improve interdisciplinary exchange," Forest Policy and Economics, Elsevier, vol. 67(C), pages 52-59.

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