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Valuing Ecosystem Services: Oysters, Denitrification, and Nutrient Trading Programs

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  • Geret S. DePiper
  • Douglas W. Lipton
  • Romuald N. Lipcius

Abstract

As part of their strategy to meet total maximum daily load restrictions in the Chesapeake Bay, managers have developed nutrient trading markets to curb nitrogen and phosphorus flows into the estuarine system. Historically, nutrient trading programs have been restricted to credits between point sources or for agricultural mitigation technologies, such as the planting of cover crops. However, the denitrification and nutrient sequestration associated with oyster reefs has recently been a topic of much biological research. We investigate the role that nutrient credits for ecosystem services provided by restored oyster reefs can play in optimally managing oyster reef complexes by developing a coupled bioeconomic model of oyster reef growth and harvest. Our findings suggest that, along with harvest, the regulating services of denitrification and nutrient sequestration lead to positive net benefits in a majority of scenarios analyzed, although local environmental conditions play a prominent role in the ultimate outcomes.

Suggested Citation

  • Geret S. DePiper & Douglas W. Lipton & Romuald N. Lipcius, 2017. "Valuing Ecosystem Services: Oysters, Denitrification, and Nutrient Trading Programs," Marine Resource Economics, University of Chicago Press, vol. 32(1), pages 1-20.
    • Handle: RePEc:ucp:mresec:doi:10.1086/688976
    DOI: 10.1086/688976
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    References listed on IDEAS

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    1. Scarlett, Lynn & Boyd, James, 2015. "Ecosystem services and resource management: Institutional issues, challenges, and opportunities in the public sector," Ecological Economics, Elsevier, vol. 115(C), pages 3-10.
    2. Rasmus Nielsen & Jesper Levring Andersen & Peter Bogetoft, 2014. "Dynamic Reallocation of Marketable Nitrogen Emission Permits in Danish Freshwater Aquaculture," Marine Resource Economics, University of Chicago Press, vol. 29(3), pages 219-239.
    3. Shortle, James, 2013. "Economics and Environmental Markets: Lessons from Water-Quality Trading," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(1), pages 1-18, April.
    4. Nielsen, Rasmus, 2012. "Introducing individual transferable quotas on nitrogen in Danish fresh water aquaculture: Production and profitability gains," Ecological Economics, Elsevier, vol. 75(C), pages 83-90.
    5. Hanson, James C. & McConnell, Kenneth E., 2008. "Simulated Trading for Maryland's Nitrogen Loadings in the Chesapeake Bay," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 37(2), pages 1-16.
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    Cited by:

    1. Hynes, Stephen & Burger, Ryan & Tudella, João & Norton, Daniel & Chen, Wenting, 2022. "Estimating the costs and benefits of protecting a coastal amenity from climate change-related hazards: Nature based solutions via oyster reef restoration versus grey infrastructure," Ecological Economics, Elsevier, vol. 194(C).
    2. Teresa R. Johnson & Kate Beard & Damian C. Brady & Carrie J. Byron & Caitlin Cleaver & Kevin Duffy & Nicholas Keeney & Melissa Kimble & Molly Miller & Shane Moeykens & Mario Teisl & G. Peter van Walsu, 2019. "A Social-Ecological System Framework for Marine Aquaculture Research," Sustainability, MDPI, vol. 11(9), pages 1-20, April.
    3. Barrett, Luke T. & Theuerkauf, Seth J. & Rose, Julie M. & Alleway, Heidi K. & Bricker, Suzanne B. & Parker, Matt & Petrolia, Daniel R. & Jones, Robert C., 2022. "Sustainable growth of non-fed aquaculture can generate valuable ecosystem benefits," Ecosystem Services, Elsevier, vol. 53(C).
    4. Petrolia, Daniel R. & Walton, William C. & Cebrian, Just, 2020. "Oyster Economics: Costs, Returns, and Ecosystem Benefits of Commercial Bottom Production, Commercial Off-Bottom Aquaculture, and Non-Harvested Reefs," Working Papers 309359, Mississippi State University, Department of Agricultural Economics.
    5. Kroetz, Kailin & Kuwayama, Yusuke & Vexler, Caroline, 2019. "What is a Fish Out of Water? The Economics Behind the Joint Management of Water Resources and Aquatic Species in the United States," RFF Working Paper Series 19-09, Resources for the Future.

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