HOW TO GET THERE FROM HERE: ECOLOGICAL AND ECONOMIC DYNAMIC OF ECOSYSTEM SERVICE PROVISION SANCHIRICO AND SPRINGBORN, 2011 Amanda Luna Mera ECL 212B About the authors James N. Sanchirico • PhD in Agricultural and Resource Economics by UC Davis • Research interests: analysis of policy design and implementation for marine and terrestrial species conservation, the development of economicecological models for forecasting the effects of resource management policies, and the control and prevention of invasive species. Michael Springborn • PhD in Environmental Science and Management by UC Santa Barbara • Research interests: Environmental and resource economics, decisionmaking under uncertainty PURPOSE To include an Ecological Model into a fishery model (Economic Model) where mangroves provide habitat and protection to certain species. The model maximizes NPV from fishing and mangrove conversion and conservation. • The goal of the study was to inform decisions on how to value and conserve habitats (mangroves) and to determine the optimal fish catch. • The Bioeconomic model integrates ecological and economical understanding of the fishery-habitat linkages • The system considers how multiple types of habitats impact the dynamics of the fish population. • mangroves • seagrass • coral reefs METHODOLOGY The model shows multiple ecosystem service provision in a production function framework. Optimal habitat development Optimal Biological Stock Harvesting •Restorable resource •Renewable resource. • The efficient long-run optimal locus was identified in the production frontier The ecological model is embedded in an economic framework Mangroves -inputs - contribute to fish production Choice variables State variables Fishing catch Fish stock Mangrove conversion Proportion of Mangrove conserved • The production function determines: • Fish population changes over time in response to availability and use of mangroves habitats and other ecological processes. • Market approach- calculating fisheries production as the gross revenues of all fish associated with mangroves. • Assumes absolute dependence of the fish population on mangroves. Density-dependence is considered in the recruitment and the use of mangroves. • The environmental parameters influence both population size and intrinsic growth rates. • The mangroves have obligate and facultative use. Species use different habitats at different stages in their lifes. • Seagrass for juveniles- mangroves for future development – coral reef for adults. The objective production function included the habitat alternatives for the fish stock Mangroves - inputs for fish production - Fish population changes in response to availability and use of mangrove habitats. Density-dependence processes are included too. Economical Function Ecological Production Function • The Ecological Economic Model was composed of: Estimates the fisheries’ production value of mangroves as the gross revenues of all fish associated with mangroves. Assumes the population depends completely on mangroves. The model shows that the association between fish and mangroves can be facultative or obligate. The value of mangroves is less. Facultative Not all survivorship depends on mangroves If mangroves are removed Obligate The population is entirely dependent on recruits from the mangroves The fish population will fo extinct. RESULTS The Economic Model maximizes the NPV from fishing, and mangrove development and protection. • The model allows a social planner to chose the level of mangrove conversion and fish catch in each period. Profits Conversion costs Benefits In situ value of mangroves prov. Coastal protection • Mangroves contribute to the value of the system: • Indirectly= production of fish • Directly= protection of coastal area The Optimal interior steady-state for fish stock and mangroves • The optimal extent - M* balances • BM (returns from development) • PM (returns from storm protection) • FM (returns from fishing) Mangroves Fish stock • The optimal stock on the reef occurs when the returns in perpetuity from harvesting another fish minus the opportunity cost is equal to the rate of return of selling the fish and investing the revenues in capital markets. The optimal policies depended on the nature of the species-habitat relationship. The optimal fish stock depends which values are taken into account by the planner • If all values are considered (fish production and storm protection) the resulting optimal fish stock would be lower. Mangroves affect long-run equilibrium • The unexploited steady-state equilibrium is derived as a function of the mangrove coverage to show how mangroves affect long-run equilibrium The extent of mangroves connected to the reef depends on whether they are restored or cleared. • The mangrove dynamics are: • Dt= effort devoted to mangrove conversion at time t • Positive= clearing for development • Negative= restoration • F(Dt)= time rate of change in mangroves • This function considers that restoring mangroves may be more difficult than clearing them. The FOC incorporate the harvest, conversion, fish population and mangrove coverage levels. • The First Order Conditions were obtained using Langrangian values. • The shadow prices for the harvest, conversion, fish population and mangrove coverage levels were determined jointly. • The dynamics of the shadow prices over time depend on the ecological and economic conditions in the ecosystem. The Optimal State was identified in two scenarios – with and without storm protection. Case 1- Omitting storm protection values • Overshooting mangrove equilibrium is part of the solution. • Additional benefits earlier from fishing •Faster recovery rates of pop. • Differences in the trade-off curve between the obligate and facultative setting. • Species won’t go extinct without mangroves. • Case 2- Including storm protection values •The fish stock levels are similar across the obligate and facultative settings. •The fishery is more productive •Overshooting is optimal when the relationship is obligate The optimal PES schedule is interdependent on the ecological and economical context Optimal •Correspond to the optimal fish catch trajectory PES for mangroves • Depend on the relative value of the sectors using the mangroves. • Different habitat uses • PES are interdependent • Change over time • Greater when ecosystems are degraded Dynamic The Fisherman’s WTP to forgo development depends on the marginal value to the fishery forman additional unit of mangrove at time t. CONCLUSIONS The poor understanding of ecosystems is a limiting factor in resource management decisions. • The ecosystem production functions dynamic process models • Map the structure and operation of the biological and physical components of the ecosystems into the provision of services. Mangroves are an input of several services -Fish habitat -Storm protection Fish populations and mangroves can have an obligate or facultative relationship • The planning and management decisions must be based on detailed knowledge of ecological production functions and the economic conditions. The incentives to achieve an efficient trade-off between fish biomass and mangrove habitat conservation are dynamic. • The model developed considers different types of species habitat dependency • Allows variation in the extent of the habitat to affect the growth rate and the long-term fish level. CRITIQUE The study found a numerical solution for an optimal transition to a point in the trade-off curve • The finding was new in the discussion on ecosystem services provision. • Highlights the need for detailed knowledge about the ecological production functions along with the economic conditions of the individuals and species who receive the benefits. • The model succeeds in incorporating not only the ecological and economic components of the system, but also the relationships and interdependences. • The sensitivity analysis explored the implications of the economic and ecological parameters. • This allowed to make fit into the model more realistic species-habitat interactions.