Direct Economic Value of Biodiversity - Web.nmsu.edu · Potential solutions convert external costs to internal ones give economic value to current external costs create ownership

Direct Economic Value of Biodiversity

Brook Milligan

Department of BiologyNew Mexico State University

Las Cruces, New Mexico [email protected]

Fall 2009

Brook Milligan Direct Economic Value of Biodiversity

mailto:[email protected]

Economic Markets

Adam Smith

assumption: economic transactions benefit both partiesindividuals acting in self interest yield a prosperous society

Economic issues associated with the environment

not all costs/benefits included within a transactionexternalities: hidden costs and benefitsTragedy of the Commons

Potential solutions

convert external costs to internal onesgive economic value to current external costscreate ownership rights to resources to create long-terminterests


Economic Markets

Adam Smith




Potential solutions



Economic Markets

Adam Smith




Potential solutions



National Economies

Often sustained by environmental degradation

Gross domestic product (GDP): measure of economicproductivity

Examples

Costa RicaAustraliaRussia and the “Stans”


Aral Sea


Aral Sea

Fourth largest inland saline body of water

68,000km2 in surface area

1,100km3 in volume

Shrinking in size since 1960s

2004: 25% of original surface area, 5× increase in salinity

2007: 10% of original size, three lakes, 2 too salty for fish (3×seawater)

Equivalent to draining Lakes Erie and Ontario


Aral Sea

Fourth largest inland saline body of water

68,000km2 in surface area

1,100km3 in volume

Shrinking in size since 1960s

2004: 25% of original surface area, 5× increase in salinity

2007: 10% of original size, three lakes, 2 too salty for fish (3×seawater)

Equivalent to draining Lakes Erie and Ontario


Aral Sea


Aral, Kazakhstan


Aral, Kazakhstan


Moynaq, Uzbekistan


Direct Economic Benefit of Aral Sea

Aral Sea fishing industry

employment: 40,000–60,000production: one-sixth of the Soviet Union’s entire fish catchfish processing industry

Muskrat trapping

tributary deltas: Amu Darya and Syr Daryayield: 500,000 muskrat pelts annually


Cause of Aral Sea Decline

Water project development

Canal systemQaraqum Canal, Turkmenistan

largest irrigation and water supply canal in the world1,375km in length13km3 water carried annuallynavigable over much of its length

almost 50% of water escapeslakes and ponds created along the canalrise in groundwater levelswidespread soil salinization

Russian cotton production

Uzbekistan a major world cotton producer, but . . .increased soil salinityincreased water requirementsincreased health problems


Cause of Aral Sea Decline

Water project development

Canal systemQaraqum Canal, Turkmenistan

largest irrigation and water supply canal in the world1,375km in length13km3 water carried annuallynavigable over much of its lengthalmost 50% of water escapeslakes and ponds created along the canalrise in groundwater levelswidespread soil salinization

Russian cotton production

Uzbekistan a major world cotton producer, but . . .increased soil salinityincreased water requirementsincreased health problems


Economic Valuation of Natural Resources

Types of valuationDirect use value: value of harvested products put into humanuse

productive use value: marketed harvestsconsumptive use value: non-marketed harvests, localconsumption

In situ value: value of unharvested resources put to other use

indirect use value: use not involving harvestfuture value or option valueexistence value


Direct Economic Value of Biodiversity - Web.nmsu.edu · Potential solutions convert external costs to internal ones give economic value to current external costs create ownership

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