FREE ELECTRONIC LIBRARY - Dissertations, online materials

Pages:     | 1 |   ...   | 31 | 32 ||

«The Economic and Social Aspects of Biodiversity Benefits and Costs of Biodiversity in Ireland REPORT PREPARED BY: CRAIG BULLOCK, OPTIMIZE CONSULTANTS ...»

-- [ Page 33 ] --

12.1 THE BENEFITS OF BIODIVERSITY Fundamentally, biodiversity is so crucial to our own survival on this planet that efforts to place a value on it can never be sufficient. Nevertheless, water is crucial to our survival too, but we still price it for policy purposes. Just as with biodiversity, we cannot aim to demonstrate the absolute value of water. However, we do price water so as to manage supply and demand, and to ensure that it is used responsibly and not wasted.

The same considerations apply to biodiversity. If anything, biodiversity is more prone to market failure than water. Nobody supplies it as such. There are no costs to cover in the form of artificial reservoirs for its storage or pipes for its distribution. Rather the reservoir is provided by the natural environment, within soils, rivers, oceans, forests and the wider countryside. Biodiversity is simply all around us.

Or sometimes it is not! Where biodiversity has been diminished for any reason, for example from over-exploitation, pollution or through the introduction of alien species or disease, we begin to realise costs in terms of loss of ecosystem services. To pre-empt this situation, the best that we can do to rectify the market failure that applies to a non-market good like biodiversity is to provide examples of the benefits of ecosystem services. These benefits are best described as marginal values, as opposed to absolute values. Marginal values include the successive contribution of ecosystem services to plant yields, timber growth and quality, fish catches or water purity. Thus, the value of ecosystem services is revealed in terms of the marginal value of an extra unit of output.

This value can be interpreted as a marginal gain where we are seeking to restore the functioning of ecosystems, or as a marginal loss avoided through biodiversity protection.

The difficulty is identifying the precise contribution of ecosystem services to market goods compared with other inputs. In fact this is extremely difficult and, even where possible, we inevitably have to fall back on a limited range of examples. So it has proven to be the case of this report.

What we have tried to do is to use examples from each productive sector to demonstrate the importance of biodiversity. The benefit estimates at which we arrive amount to at least 2.6 billion per year. They are, of course, partial estimates and very imprecise at that. Fundamentally, they omit some key biodiversity contributions such as waste assimilation, maintenance of human health, or the full range of benefits that the soil biota provides to productivity and carbon recycling and storage.

Some of the benefits of ecosystem services can be substituted. We have been extracting as much productivity as we can from natural systems for thousands of years. In more recent times, we have begun to substitute for these natural systems through the application of artificial inputs. Agriculture and forestry provide the obvious examples through their use of fertilizers and pesticides. In fisheries, we have been developing aquaculture systems, while in water supply we can substitute natural purification with chemicals and other processes. However, we can only substitute to a finite extent. There is much uncertainty over both the nature of ecosystem services and their interaction with artificial processes. We have also found out to our cost that artificial processes often have unwanted external costs such as pollution and toxicity. We can propel productivity through artificial means as in the case of monocultural farming systems, but ultimately this leaves us more dependent on artificial inputs and more vulnerable to problems such as pests or disease.

Numerous studies have demonstrated that incomes are stabilised in the long-term by systems that produce diverse products or outputs and which protect the underlying natural diversity.

Such sustainable systems are not just good for the environment, but are also good for long-run productivity. The quality of output is often better as in cases where organic methods are used to produce food crops. Neither is gross productivity necessarily compromised even in the short-term.

The case of fishing provides an obvious example where over exploitation of the system and neglect of biodiversity has led to a collapse in fish stocks around the world. We know hardly anything about the functioning of the marine ecosystem, but it is obvious that far higher catches are possible in a well-managed marine environment. Biodiversity therefore has a sizeable option value. We do not understand all ecosystem processes, but it is possible to place a provisional value on the potential output.

The final contributions of biodiversity are in terms of its contribution to human welfare and to health. In terms of the former, we can value biodiversity through those activities to which it makes a direct contribution, such as angling, birdwatching or ecotourism.We can also value the indirect contribution in terms of all types of countryside recreation or water sports. Where biodiversity is misused, external costs are passed on to society. Sometimes these external costs impact on a distinct population or economic sector. On other occasions, they impact on all of us given the utility that we derive from having access to the natural environment.

Where human health is concerned the contribution of biodiversity is less discrete and often little understood. The value that we place on our physical health is considerable, noting the amounts that we are prepared to spend on our own well-being and healthcare. Consequently, the economic benefit of disease prevention is huge. As noted above, careful management of ecosystem services can contribute to high quality food and that, of course, is good for health. Biodiversity is also integral to some environments such as sand dunes, salt marshes, estuaries or wetlands that are vital for buffering the effect of storms and flooding. Each of these is vulnerable to the effects of climate change. However, it is the relationship between disease, wild populations and ourselves that is least understood and so difficult to demonstrate. We understand the significant impact of diseases spread from wild populations. The economic and social costs of AIDS or avian influenza are huge.

We know much less about how such risks are controlled within ecosystems that are not compromised by human interference.

12.2 BIODIVERSITY POLICIES Evidently, Government is spending very little on biodiversity in comparison with the benefits it provides. There is some direct expenditure on biodiversity protection, for example by the National Parks and Wildlife Service. There are also various policies which protect biodiversity indirectly, including any policies that aim to protect the environment, for example, by controlling pollution.

Typically these policies are reactive in that they are aiming to mitigate threats to the environment.

Often, the costs, or at least some of the costs, are borne by private companies and individuals in relation to the polluter pays principle. However, there are very few policies which aim to proactively protect biodiversity.

The chapter on benefits and costs identified policy costs of 370 million per year. Clearly, these are just a fraction of the benefits of the very limited range of ecosystem services that we have used as examples. It is clear that there are some sectors, such as the marine sector, where we obtain huge economic benefits from ecosystem services, and where we could be enjoying much greater benefits were biodiversity adequately managed. In other sectors, such as with agri-environmental policy, we are now spending significant amounts on policies that protect biodiversity, albeit indirectly.

However, these amounts are being spent largely in response to previous mismanagement and also with ulterior objectives, including social benefits and transfers. The general perception, in terms of the very limited data that most government departments either possess, or were able to impart, is that there is lamentably little appreciation of the economic benefits of biodiversity.

Policies are needed to correct market failure and to ensure that both the productive and social value of biodiversity is realised through the sustainable management of resources. Generally, economists encourage the use of economic instruments to achieve these ends rather than command and control approaches such as regulation. Taxes or charges are the preferred approach in that these provide market signals which influence behaviour without the implications that subsidies have for income transfers. The greater use of taxes or charges to encourage biodiversity protection also imposes less costs on government. If these methods were used more extensively, we would have been giving more attention to private costs, rather than public costs and expenditure, in the chapter on Benefits and Costs.

In practice, governments tend to prefer subsidies and transfer payments as means to cajole economic agents into behaving in particular, in more desirable ways. Indeed, market exchanges and prices within primary productive sectors such as agriculture, forestry and fisheries, have become largely determined by complex systems of market protection, subsidies and grants. On the one hand, these artificial systems makes it possible to inject additional economic incentives to protect biodiversity. On the other hand, these same incentives must compete - even compensate - for other policies, some of which are actually undermining biodiversity objectives.

In the short-run, there will be occasions when biodiversity protection requires that economic agents are given economic incentives that influence behaviour even in the face of numerous similar incentives. However, we can achieve at least as much by removing the incentives which act contrary to biodiversity or which underpin less sustainable systems of production. Ultimately, this will allow economic sectors to become more conscious of their reliance on the provisioning and regulating services provided by biodiversity and do so without huge outlays in terms of Government expenditure.

Printed on recycled paper containing a

Pages:     | 1 |   ...   | 31 | 32 ||

Similar works:

«The Application of Waste Minimisation to Business Management to Improve Environmental Performance in the Food and Drink Industry M Poonprasit, P S Phillips, A Smith, W Wirojanagud, D Naseby May 2005 1. Introduction The food and drink industry is one of the major sectors in the UK and makes a significant contribution to national and regional economies. The sector produces a large amount of waste compared to other industries and it faces increasing demands to improve resource efficiency and...»

«CITY OF ARLINGTON, SOUTH DAKOTA February 8, 2016 The City Council met as the Zoning Commission. There was no business. Meeting adjourned. The City Council met in regular session in the Municipal Building. Present on Roll Call were Mayor Amiel Redfish and Council Members: Curt Lundquist, Terry Rowbotham, Garth Johnson, Todd Bunker and Keith Wendland. Absent: Jared Steffensen. Addition to the Agenda: Changes to the Fire Dept roster. Table Utility Ordinance issue until March meeting. Motion was...»

«NBER WORKING PAPER SERIES SOPHISTICATED MONETARY POLICIES Andrew Atkeson V. V. Chari Patrick Kehoe Working Paper 14883 http://www.nber.org/papers/w14883 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 April 2009 Atkeson, Chari, and Kehoe thank the National Science Foundation for financial support and Kathleen Rolfe for excellent editorial assistance. The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of...»

«Most Gracious Speech To Both Houses of Parliament By His Excellency The Governor-General ON WEDNESDAY, THE TWENTY-SEVENTH OF MARCH, 2013 THRONE SPEECH 2013: Uniting Grenada and Building The New Economy Delivered to the Houses of Parliament By His Excellency Sir Carlyle Glean, Governor-General On the occasion of the First Session of the Ninth Parliament Mr. President, Mr. Speaker, Members of Parliament Our Nation embarks upon this First Session of the Ninth Parliament in difficult circumstances...»

«DOING BUSINESS IN KENYA CONTENTS 1 – Introduction 3 2 – Business environment 4 3 – Foreign Investment 11 4 – Setting up a Business 13 5 – Labour 18 6 – Taxation 20 7 – Accounting & reporting 24 8 – UHY Representation in Kenya 25 DOING BUSINESS IN KENYA 3 1 – 1 – INTRODUCTION UHY is an international organisation providing accountancy, business management and consultancy services through financial business centres in around 90 countries throughout the world. Business partners...»

«United States General Accounting Office GAO Report to the Subcommittee on Domestic Monetary Policy, Technology, and Economic Growth, Committee on Financial Services, House of Representatives CRITICAL January 2003 INFRASTRUCTURE PROTECTION Efforts of the Financial Services Sector to Address Cyber Threats a GAO-03-173 January 2003 CRITICAL INFRASTRUCTURE PROTECTION Efforts of the Financial Services Sector to Highlights of GAO-03-173, a report to the Subcommittee on Domestic Monetary Address Cyber...»

«American Bankers Association Consumer Mortgage Coalition Housing Policy Council of the Financial Services Roundtable Independent Community Bankers of America Mortgage Bankers Association September 13, 2012 Mr. Alfred M. Pollard General Counsel Federal Housing Finance Agency 400 Seventh Street, S.W., Eighth Floor Washington, D.C. 20024 RegComments@fhfa.gov Re: Comments: RIN 2590-AA53 Dear Mr. Pollard: The undersigned are pleased to have the opportunity to submit comments on the Federal Housing...»

«HNP DISCUSSION PAPER Improving Access to Medicines in Developing Countries Application of New Institutional Economics to the Analysis of Manufacturing and Distribution Issues C. James Attridge and Alexander S. Preker March 2005 IMPROVING ACCESS TO MEDICINES IN DEVELOPING COUNTRIES Application of New Institutional Economics to the Analysis of Manufacturing and Distribution Issues C. James Attridge and Alexander S. Preker March 2005 Health, Nutrition and Population (HNP) Discussion Paper This...»

«Capital and profitability in banking: Evidence from US banks MATTHEW OSBORNE1,2, ANA-MARIA FUERTES2 and ALISTAIR MILNE3 1 UK Financial Services Authority, 2Cass Business School, City University, London, 3 Loughborough University School of Business and Economics Abstract This paper examines the effect of capital ratios on bank profitability over economic cycles using data from the US banking sector spanning several economic cycles from the late 1970s to the recent financial crisis of 2008-10....»

«Munich Personal RePEc Archive Selection Factors of Customer towards Islamic and Conventional Home Financing: A Case Study in Johor, Malaysia Mohamad Isa Abd Jalil and Remali Yusoff and Roslinah Mahmud School of Business and Economics, University Malaysia Sabah 15. February 2010 Online at https://mpra.ub.uni-muenchen.de/68433/ MPRA Paper No. 68433, posted 19. December 2015 08:48 UTC Selection Factors of Customer towards Islamic and Conventional Home Financing: A Case Study in Johor, Malaysia...»

«Accepted Manuscript Does bank market power affect SME financing constraints? Robert M. Ryan, Conor M. O’Toole, Fergal McCann PII: S0378-4266(14)00005-3 DOI: http://dx.doi.org/10.1016/j.jbankfin.2013.12.024 Reference: JBF 4316 Journal of Banking & Finance To appear in: Received Date: 16 July 2013 Accepted Date: 25 December 2013 Please cite this article as: Ryan, R.M., O’Toole, C.M., McCann, F., Does bank market power affect SME financing constraints?, Journal of Banking & Finance (2014),...»

«GILFORD BOARD OF SELECTMEN’S MEETING May 9, 2012 Town Hall The Board of Selectmen convened in a regular session on Wednesday, May 9, 2012, at 7:00 p.m., at the Gilford Town Hall, 47 Cherry Valley Road, Gilford, NH. Selectmen present were Gus Benavides, John O’Brien and Kevin Hayes. Also present were Town Administrator Scott Dunn and Executive Secretary Sandra Bailey. Staff members in attendance included Finance Director Geoff Ruggles, Police Chief Kevin Keenan, DPW Director Sheldon Morgan,...»

<<  HOME   |    CONTACTS
2016 www.dissertation.xlibx.info - Dissertations, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.