• Selected
• Entire List

Abstract:
This paper introduces and surveys ecological-economic analysis and valuation of biodiversity. Furthermore, the notion and application of economic, monetary valuation of biodiversity is critically evaluated. A classification of biodiversity values is offered, based on a system of logical relationships among biodiversity, ecosystems, species and human welfare. Suggestions are made about which economic valuation methods can address which type of biodiversity value. The resulting framework is the starting point for a survey and evaluation of empirical studies at each of the four levels of diversity. The resulting monetary value estimates seem to give unequivocal support to the belief that biodiversity has a significant, positive social value. The contingent valuation method is by far the most used method. An important reason is that the other valuation methods are unable to identify and measure passive or nonuse values of biodiversity. Nevertheless, most studies lack a uniform, integrated perspective on biodiversity. Therefore, available economic valuation estimates should generally be regarded as providing a partial perspective on, and at best lower bounds, to the unknown value of biodiversity changes.

Biodiversity, biotic richness, use economic value, nonuse economic value, monetary values, contingent valuation, ecosystem health, integrated modeling

Abstract:
Evolutionary and environmental economics have a potentially close relationship. This paper reviews past and identifies potential applications of evolutionary concepts and methods to environmental economics. This covers a number of themes: resource use and ecosystem management; growth and environmental resources; economic and evolutionary progress; and individual behavior and environmental policy. The treatment will cover both biological and economic - including institutional, organizational and technological - evolutionary phenomena. Attention will be drawn to the fact that evolutionary economics shows a surprising neglect of environmental and natural resource factors.

Coevolution, economic growth, environmental policy, innovation, progress, self-regulation, renewable resources, resilience, social preferences

Abstract:
Expectations and information about the growth of GDP per capita have a large influence on decisions made by private and public economic agents. It will be argued here that GDP (per capita) is far from a robust indicator of social welfare, and that its use as such must be regarded as a serious form of market and government failure. This article presents an update on the most important criticisms of GDP as an indicator of social welfare and economic progress. It further examines the nature and extent of the impact of GDP information on the economy, revisits the customary arguments in favour of the GDP indicator, and critically evaluates proposed alternatives to GDP. The main conclusion is that it is rational to dismiss GDP as an indicator to monitor economic progress and to guide public policy. As is clarified, this conclusion does not imply a plea against growth, innovation or national accounting.

Distribution, externalities, genuine savings, happiness, HDI, informal sector, ISEW, status goods

Abstract:
A spatial welfare framework for the analysis of the spatial dimensions of sustainability is developed. It incorporates agglomeration effects, interregional trade, negative environmental externalities and various land use categories. The model is used to compare rankings of spatial configurations according to evaluations based on social welfare and ecological footprint indicators. Five spatial configurations are considered for this purpose. The exercise is operationalized with the help of a two-region model of the economy that is in line with the 'new economic geography'. Various (counter) examples show that the footprint method is not consistent with an approach aimed at maximum social welfare.

Agglomeration effects, Trade advantages, Negative externalities, Population density, Spatial configuration, Transport

Abstract:
The rationale for conservation and creation of wetlands stems from the recognition of both their ecological and economic values. This paper examines the welfare impacts of goods and services provided by wetlands. We collected 385 estimates of the economic value of 181 natural and man-made wetlands from 167 studies worldwide. The resulting database is less biased towards North America than previous reviews of the literature. The relative importance of characteristics of the valuation study, of the wetland site, and of the socio-economic and geographical context is estimated by means of a meta-regression analysis of wetland values. Provision of amenities, flood control and storm buffering, and water quality improvement are the most highly valued wetland services. The relevance of the socio-economic and geographical context clearly emerges from the analysis and, in particular, the proximity to other wetland sites is negatively correlated with valuations. An analysis of the effect of environmental stress on wetland value shows that the latter increases with stress from human development activities and uses. In addition to the basic meta-regression model, the influence of authorship effects and of the geographic regions is examined by means of a multi-level approach. A second extended meta-regression model including cross-effects shows that the valuations of specific services vary according to the type of wetland producing them.

Constructed Ecosystems, Economic Valuation, Man-Made Wetlands, Meta-Regression, Wetland Values

Abstract:
What is a 'sustainable nation' and how can we identify and rank 'sustainable nations'? Are nations producing and consuming in a sustainable way? Aggregate indicators have been proposed to answer these questions. This paper quantitatively compares three aggregate indicators of sustainability: the World Bank's 'Genuine Savings' measure, the 'Ecological Footprint' and the 'Environmental Sustainability Index'. It is concluded that rankings of sustainable nations vary significantly among these indicators. Implications of this disagreement for analysis and policy are suggested.

Adjusted Net Savings, Ecological Debt, Ecological Footprint, Environmental Sustainability Index, Genuine Savings, Sustainability

Abstract:
We study the conditions for the emergence of cooperation in a spatial common-pool resource game. We consider three types of agents: cooperators, defectors and enforcers. The role of enforcers is to punish defectors for overharvesting the resource. Agents are located around a circle and they only observe the actions of their two nearest neighbors. Their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest payoffs on average. Using theoretical and numerical analysis, we find that a large diversity of equilibria exists in this game. In particular, we derive conditions for the occurrence of equilibria in which the three strategies coexist. We also discuss the stability of these equilibria. Finally, we show that introducing resource dynamics favors the occurrence of cooperative equilibria.

Common property, Evolutionary game theory, Local interactions game, Self-organization, Cooperation

Abstract:
We examine the impact of providing a "no-choice" option in an attribute based valuation experiment. The aim of the experiment was to assess monetary values of cockle fishery management practices in the Dutch Wadden Sea for different stakeholder groups, namely Dutch citizens, local residents, and tourists. The current policy debate about the management of the Wadden Sea stresses the fact that individual preferences with respect to cockle-fishery differ. The aim of this paper is to analyze the individual preferences in an objective way. Special attention is given to the influence of including a "no-choice option", which is analyzed using a nested logit model. We test whether the full set of policy options can be considered as close substitutes. The estimation results show that the influence of including the no choice option differs among the stakeholders considered.

Stakeholder valuation, Stated choice method, Multinomial logit model, Binary logit model

Abstract:
Conditions for the emergence of cooperation in a spatial common-pool resource game are studied. This combines in a unique way local and global interactions. A fixed number of harvesters are located on a spatial grid. Harvesters choose among three strategies: defection, cooperation, and enforcement. Individual payoffs are affected by both global factors, namely, aggregate harvest and resource stock level, and local factors, such as the imposition of sanctions on neighbors by enforcers. The evolution of strategies in the population is driven by social learning through imitation. Numerous types of equilibria exist in these settings. An important new finding is that clusters of cooperators and enforcers can survive among large groups of defectors. We discuss how the results contrast with the non-spatial, but otherwise similar, game of Sethi and Somanathan (1996).

Common property, Cooperation, Evolutionary game theory, Global interactions, Local interactions, Social norms

Abstract:
This paper offers an economic value assessment of a nature protection programme in the Veluwe. This programme involves two defragmentation scenarios: the first scenario connects the central part of the Veluwe with the IJssel river forelands in a north-eastern direction, while the second scenario is focused on defragmentation in a south-western direction, where the Rhine river forelands are located. The valuation is based on a questionnaire that was administered during face-to-face interviews in the Veluwe area and through the Internet. We employ a contingent valuation approach to assess the respondents' willingness to pay for the realisation of the defragmentation scenarios. It appears that the mean willingness to pay for the two defragmentation scenarios are Euro 59.7 and Euro 162.2 per respondent. These two willingness-to-pay estimates, which refer to a lump sum payment (or 'once-and-for-all payment'), are based on a lognormal and Weibull distribution respectively. In addition to the willingness to pay, we also estimate recreation benefits of the Veluwe. To that end, we use the travel cost technique, the purpose of which is to arrive at an estimate of the site's consumer surplus. According to this technique, the yearly recreational benefits are estimated between Euro 0.06 and Euro 0.45 per visitor. Whereas the former estimate is based on the fuel costs only, the latter covers also insurance and maintenance costs, and capital depreciation. Finally, we performed an aggregation of individual WTP estimates over Dutch households. With the resulting aggregate estimates we are able to compare the total costs and benefits of the two scenarios for habitat fragmentation in the Veluwe. The result of such a simple comparison turns out to critically depend on whether the mean or median estimate is used for aggregation. If aggregation of individual WTP estimates is based on mean values, then the benefits far exceed the estimated costs of defragmentation. In other words, based on an integrated economic-ecological analysis it makes sense to execute the defragmentation measures described in the scenarios. However, aggregate estimates obtained by using median values result in higher costs than aggregate estimates that are based on mean values. Even stronger, median-based estimates show that the costs of implementing scenario 2 are higher than the total benefits of this scenario.

Economic value, Nature protection, Defragmentation policy, Veluwe

Abstract:
We address the notion of dynamic, endogenous diversity and its role in theories of investment and technological innovation. We develop a formal model of an innovation arising from the combination of two existing modules with the objective to optimize the net benefits of diversity. The model takes into account increasing returns to scale and the effect of different dimensions of diversity on the probability of emergence of a third option. We obtain analytical solutions describing the dynamic behaviour of the values of the options. Next we optimize diversity by trading off the benefits of diversity (due to recombinant innovation) and the benefits associated with returns to scale. We derive conditions for optimal diversity under different regimes of returns to scale. When the investment time horizon is beyond a threshold value, the best choice becomes diversity. This threshold will be larger the higher the returns to scale.

balance, diversity, increasing returns, recombinant innovation, scale effects

Abstract:
Network markets are characterized by composite goods or services that can be obtained from alternative combinations of basic products. Examples are complex, multistage production and consumption systems, transport and communications. Efficiency in these markets depends on the net effect of the complementary and substitution relationships that exist between elementary products, which are determined by network topology and market structure. This paper examines factors that affect equilibria in network markets by considering a number of simple economic models of network markets. First it is shown how network topology influences profits and welfare under different market regimes. In particular, attention is given to price discrimination in monopolistic networks. Next evolution of networks is examined, which may occur via investment in new links by incumbent firms, or via entry of new firms in the network. It is shown that the number of competitors in equilibrium may not coincide with the socially optimal one, which in turn depends on the network structure. In order to show some concrete implications of the theoretical results two examples are presented, dealing with intermediate factors in an input-output production system, and with the trade-off between network externalities and economies of scale and density in hub-and-spoke transportation networks.