When Climate Change Turns Good Plant Bad–A Dynamic Multispecies Model of Reindeer Herding in a Changing Arctic

In many Nordic countries, climate-induced encroachment of the native and allelopathic Empetrum nigrum (crowberry) on other palatable vegetation decreases pasture quality for the culturally important reindeer herds. Unfortunately, current pasture management plans do not include pasture quality indicators. To argue for the importance of pasture quality and provide adaptation guidance, we develop a three-species bioeconomic model (reindeer-vegetation-crowberry) with three controls (reindeer slaughter, supplementary feeding of reindeer, and crowberry control). Our model indicates that without human intervention, vegetation biomass and reindeer herd size will decline due to crowberry’s allelopathic effects, resulting in 42% loss in reindeer stock and 40% (100 million NOK) profit loss. Human interventions, specifically supplementary feeding and crowberry control, reduces the profit loss by half. To incentivize these interventions, which are partially public goods, the paper proposes a conditional subsidy program that only compensates herders for crowberry control when the shadow value of crowberry becomes negative. This approach can be generalized to other regions experiencing similar ecological changes, in which habitat quality is a crucial yet often overlooked factor.