The economic value of ecological stability

Abstract

Seemingly intangible ecosystem characteristics that preoccupy ecologists, like ecosystem stability and the responsiveness of populations to environmental variation, have quantifiable economic values. We show how to derive these values, and how their consideration should change environmental decision making. To illustrate these concepts, we use a simple reserve design model. When resource managers choose a particular landscape configuration, their decision affects both the mean abundance of species and the temporal variation in abundances. Population stability and related phenomena have economic value, because management actions affect the variance of ecosystem components. In our example, a larger reserve size is recommended when accounting for the stability of the managed ecosystem.

Fig. 1.

Present value of in situ revenues (Eq. 5, case ii) for a constant environment (dashed curve) and opportunity cost in lost timber revenue (dot–dash line) as functions of reserve size. The optimal reserve size maximizes the difference between the revenue and the opportunity cost (vertical dashed line). In a variable environment, the expected present value of in situ revenues (solid curve) is less than for a constant environment, but the optimal reserve size can be greater (solid vertical line). Parameters are [a, K, μ, δ, p, α, L] = [0.5, 100, 0.1, 0.05, 5, 0.1, 100], and CV(a) = 3 (solid).

Fig. 2.

Optimal reserve size as a function of environmental variability, CV(a) (solid curve). The dashed line indicates the corresponding optimal reserve size in a constant environment. For modest amounts of environmental variability, larger reserves are favored in fluctuating environments. If environmental fluctuations are too violent (CV(a) ≥ 3.8), then no reserve is optimal, and the curve jumps to zero. Case ii (Eq. 5), with parameters [a, K, μ, δ, p, α, L] = [0.5, 100, 0.1, 0.05, 5, 0.1, 100].

Fig. 3.

Marginal values of ecosystem attributes in the optimal solution as CV(a) increases to the point at which a reserve ceases to be worthwhile (CV(a) > 3.8). Marginal values of changes to the mean (solid curve), stability (dashed), and environmental sensitivity (dot–dash) of the population, which sum to equal the marginal value of clearing 1 more acre for timber (crosses). Case ii (Eq. 5), with parameters [a, K, μ, δ, p, α, L] = [0.5, 100, 0.1, 0.05, 5, 0.1, 100].