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Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary

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  • Martin D. Smith

    () (Nicholas School of the Environment and Department of Economics, Duke University, Box 90328, Durham, NC 27701, USA)

  • Larry B. Crowder

    () (Center for Ocean Solutions, Stanford University, Stanford, CA 94305, USA)

Abstract

Valuing ecosystem services with microeconomic underpinnings presents challenges because these services typically constitute nonmarket values and contribute to human welfare indirectly through a series of ecological pathways that are dynamic, nonlinear, and difficult to quantify and link to appropriate economic spatial and temporal scales. This paper develops and demonstrates a method to value a portion of ecosystem services when a commercial fishery is dependent on the quality of estuarine habitat. Using a lumped-parameter, dynamic open access bioeconomic model that is spatially explicit and includes predator-prey interactions, this paper quantifies part of the value of improved ecosystem function in the Neuse River Estuary when nutrient pollution is reduced. Specifically, it traces the effects of nitrogen loading on the North Carolina commercial blue crab fishery by modeling the response of primary production and the subsequent impact on hypoxia (low dissolved oxygen). Hypoxia, in turn, affects blue crabs and their preferred prey. The discounted present value fishery rent increase from a 30% reduction in nitrogen loadings in the Neuse is $2.56 million, though this welfare estimate is fairly sensitive to some parameter values. Surprisingly, this number is not sensitive to initial conditions.

Suggested Citation

  • Martin D. Smith & Larry B. Crowder, 2011. "Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary," Sustainability, MDPI, Open Access Journal, vol. 3(11), pages 1-39, November.
  • Handle: RePEc:gam:jsusta:v:3:y:2011:i:11:p:2229-2267:d:14850
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nielsen, Max & Ravensbeck, Lars & Nielsen, Rasmus, 2014. "Green growth in fisheries," Marine Policy, Elsevier, vol. 46(C), pages 43-52.
    2. Qi Fu & Bo Li & Linlin Yang & Zhilong Wu & Xinshi Zhang, 2015. "Ecosystem Services Evaluation and Its Spatial Characteristics in Central Asia’s Arid Regions: A Case Study in Altay Prefecture, China," Sustainability, MDPI, Open Access Journal, vol. 7(7), pages 1-19, June.
    3. Nikolaos Mykoniatis & Richard Ready, 2016. "Spatial Harvest Regimes for a Sedentary Fishery," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(2), pages 357-387, October.
    4. repec:kap:enreec:v:69:y:2018:i:1:d:10.1007_s10640-016-0066-7 is not listed on IDEAS

    More about this item

    Keywords

    nutrient pollution; hypoxia; bioeconomics; ecosystem services; predator-prey; open access; habitat-dependent fishery;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • 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
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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