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Loss of Biodiversity - ECO345

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The document is a research paper for an environmental and resource economics class focusing on natural resource depletion. It discusses sub-topics including depletion of forests, wildlife, water, oil, and agriculture. One section analyzes an article about how economic development can both cause biodiversity loss but also potentially increase conservation efforts and slow extinction rates in more developed areas with higher standards of living. A second article estimates the total economic value of biodiversity services globally and in the US to be in the trillions of dollars.

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ECO 345 - Environmental and Resource Economics Research Paper March 15, 2016 Nicholas C. Niesen Our group will focus on the environmental and economic impacts of Natural Resource Depletion. To better focus our research, we will define Natural Resource Depletion as the consumption of a resource faster than it can be replenished. Sub-topics will focus on the depletion of forests, wildlife/extinction, water, oil, and agriculture. The group member researching each subtopic and corresponding articles are listed below. Agriculture - Loss of Biodiversity At its core, biodiversity simply refers to a variety of life. There are roughly 10 million species of plants, animals, and microbes on earth, and every one of these species has a unique role in ensuring that the world keeps progressing in an efficient manner (Pimm et al., 1995). The increased loss of these species leads to an increased loss of ecosystem services that they may provide to agriculture, forests, or ecosystems. These services range from earthworms that churn and aerate the soil to microbes used to eliminate pollutants. The costs of these services are discussed in the scholarly article that I reviewed while an interesting possible solution to loss of biodiversity is discussed in the popular article. A recent article in The Economist titled Hang On addresses biodiversity and possible solutions to the increased loss of biodiversity throughout the world. The article discusses how economic growth has led to a decline in biodiversity, and, conversely, how economic development may be a way to increase biodiversity. Evidence shows that more developed areas

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have recently shown a preference toward conservation which has helped slow the rate of extinctions in these areas. On the other hand, relatively poorer and less developed countries have increased their impact on the environment. Multiple sources of data are referenced including how the Living Planet Index, which measures trends in species populations, has generally fallen in poor countries and risen in rich countries over the past 40 years. Also, the case of the bald eagle was mentioned as an example of how a once nearly extinct species has rebounded quite well in the United States which is relatively rich. To illustrate the progress of developed countries in promoting biodiversity, South Korea, a fast developing country where forest loss has stabilized, was compared to North Korea, a relatively less developed country, where approximately one third of forests have been lost since 20 years ago. However, the issue of biodiversity loss is in no way solved. As the population continues to increase, additional strain is put on the planet. Specifically, the increase in land needed to grow food has caused a large amount of habitat loss which has greatly contributed to loss of biodiversity. Because of population growth, the land area needed to grow food is expected to double by 2050 (Economist, 2013). The specific issue that the author addressed was the ability of economic development to aid in increasing or preserving biodiversity. To do so, the examples mentioned in the previous paragraph are used as evidence. The method of revealed preference because of the use of indirect data gathering. Recent trends such as agricultural yields, birth rates, and Living Planet Index are used to illustrate humans impact on biodiversity is decreasing in developed countries. While reading this article, willingness to pay (WTP) seemed to be a main economic theory that could be applied to this situation. The findings of this article point to citizens of rich countries having a higher WTP to preserve biodiversity that citizens of relatively poorer

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countries. However, the findings could also mean that poor counties are willing to accept (WTA) relatively less to no longer have biodiversity. This topic can also be related to a classic case of supply and demand. The demand for biodiversity is poor countries is relatively low compared to rich ones, so the supply of biodiversity in poor countries will be relatively less that it will be in rich areas. Almost anytime loss of biodiversity or a rise in extinction rates are discussed, one of the main causes is often economic development. This article take a different approach and discusses how economic growth may be a large reason we are where we are (environment wise) but this same development may also be a large reason why we begin to turn the corner and actually gain biodiversity while improving the environment. Because of this different take on the relationship between economic development and biodiversity, this article is a unique pice of literature in the economics community. The article brings up interesting points but is generally near sighted about the issue of biodiversity. The relatively rich counties of the present have been the ones that have historically produced the most pollution over the industrial revolution. As a result of operations that were extremely harmful to local ecosystems, these countries prospered while others took a relatively small tole on their local ecosystems by not participating in the Industrial Revolution. A market for pollution like the one in class was not mentioned in the article. There is the real possibility that rich countries may be outsourcing their pollution to poorer one thus increasing the biodiversity discrepancy between rich and poor countries. The article does not mention how citizens of poor countries do not have a high WTP for biodiversity because their basic needs fail to be met. People are referred to as being either members of poor or rich countries which

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removes the reader from the fact that biodiversity loss is a worldwide issue that can only be addresses with a unified effort between everyone on earth. Overall, the article provides an interesting perspective on the subject of biodiversity loss, but fails to address the possibility that mankind may have already done irreparable damage to biodiversity and the environment as a whole. The second article that was reviewed, Economic and Environmental Benefits of Biodiversity, dealt with the value of biodiversity services. Data is compiled from previous research to assist the authors in arriving at the value that biodiversity brings to the United States and the world. This paper breaks down the monetary value of biodiversity into categories found in Table 2 and uses the known cost of similar activities to assign a dollar value to the biodiversity services. The main conclusion is that the conservative total value of services provided to humanity by the wide range on species on earth is $2.928 trillion and $319 billion in the United States alone (Pimental et al., 1997). One of the main points of biodiversity preservation is that the supply of biodiversity services is dependent on human activity. The more negative impact we have on biodiversity, the less services we receive. It is to our advantage to preserve and encourage biodiversity because it not only benefits the environment, but it also translates to more biodiversity services that we essentially get for free. The issue of biodiversity is a classic example of the basis of economics which involves how society disperses scarce resources while dealing with unlimited demand. The optimal level of biodiversity is not achieved because it is a public good which is typical because people are willing to pay less for public goods due to a tendency to think on an individual basis. Mankind has historically given more consideration to present needs than needs

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of future generations. As a result, we have natural resource depletion and specifically biodiversity loss. The article contributes to research literature by taking a systematic and conservative approach to estimate total value of biodiversity services to humans and to the natural environment as a whole. The paper states that this research is vital because it can be used as a basis for implementing policies that encourage enhanced biodiversity based on its large economic contribution to mankind. Source: BioScience, Vol. 47, No. 11 Economic and Environmental Benefits of Biodiversity is effective in illustrating the overall contribution of biodiversity. When dealing with costs that can sometimes be difficult to

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estimate, it is important to be conservative in estimates. The authors of this paper take a conservative approach which improves the accuracy of any policies that come about as a result of this research. A wide range of biodiversity services are taken into account which give an accurate representation of the net social benefits received from them. Based on this, I feel that the authors wrote a very accurate and interesting paper that was a valuable addition to the research community.

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References Pimm S.L., Russell G.J., Gittleman J.L., & Brooks, T.M. (1995). The future of biodiversity. Science 269, pp. 347-350. Economist, The (2013). Hang On: More growth, not less, is the best hope for averting a sixth great extinction. The Economist, Hang On, September 14, 2013. Retrieved from http:// www.economist.com/news/leaders/21586346-more-growth-not-less-best-hope-averting- sixth-great-extinction-hang Pimentel, D., Wilson, C., McCullum, C., Huang, R., Dwen, P., Flack, J., Tran, Q., Saltman, T., & Cliff, B. (1997). Economic and Environmental Benefits of Biodiversity. BioScience, Vol. 47, No. 11, pp. 747-757.

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Loss of Biodiversity - ECO345

  • 1. ECO 345 - Environmental and Resource Economics Research Paper March 15, 2016 Nicholas C. Niesen Our group will focus on the environmental and economic impacts of Natural Resource Depletion. To better focus our research, we will define Natural Resource Depletion as the consumption of a resource faster than it can be replenished. Sub-topics will focus on the depletion of forests, wildlife/extinction, water, oil, and agriculture. The group member researching each subtopic and corresponding articles are listed below. Agriculture - Loss of Biodiversity At its core, biodiversity simply refers to a variety of life. There are roughly 10 million species of plants, animals, and microbes on earth, and every one of these species has a unique role in ensuring that the world keeps progressing in an efficient manner (Pimm et al., 1995). The increased loss of these species leads to an increased loss of ecosystem services that they may provide to agriculture, forests, or ecosystems. These services range from earthworms that churn and aerate the soil to microbes used to eliminate pollutants. The costs of these services are discussed in the scholarly article that I reviewed while an interesting possible solution to loss of biodiversity is discussed in the popular article. A recent article in The Economist titled Hang On addresses biodiversity and possible solutions to the increased loss of biodiversity throughout the world. The article discusses how economic growth has led to a decline in biodiversity, and, conversely, how economic development may be a way to increase biodiversity. Evidence shows that more developed areas
  • 2. have recently shown a preference toward conservation which has helped slow the rate of extinctions in these areas. On the other hand, relatively poorer and less developed countries have increased their impact on the environment. Multiple sources of data are referenced including how the Living Planet Index, which measures trends in species populations, has generally fallen in poor countries and risen in rich countries over the past 40 years. Also, the case of the bald eagle was mentioned as an example of how a once nearly extinct species has rebounded quite well in the United States which is relatively rich. To illustrate the progress of developed countries in promoting biodiversity, South Korea, a fast developing country where forest loss has stabilized, was compared to North Korea, a relatively less developed country, where approximately one third of forests have been lost since 20 years ago. However, the issue of biodiversity loss is in no way solved. As the population continues to increase, additional strain is put on the planet. Specifically, the increase in land needed to grow food has caused a large amount of habitat loss which has greatly contributed to loss of biodiversity. Because of population growth, the land area needed to grow food is expected to double by 2050 (Economist, 2013). The specific issue that the author addressed was the ability of economic development to aid in increasing or preserving biodiversity. To do so, the examples mentioned in the previous paragraph are used as evidence. The method of revealed preference because of the use of indirect data gathering. Recent trends such as agricultural yields, birth rates, and Living Planet Index are used to illustrate humans impact on biodiversity is decreasing in developed countries. While reading this article, willingness to pay (WTP) seemed to be a main economic theory that could be applied to this situation. The findings of this article point to citizens of rich countries having a higher WTP to preserve biodiversity that citizens of relatively poorer
  • 3. countries. However, the findings could also mean that poor counties are willing to accept (WTA) relatively less to no longer have biodiversity. This topic can also be related to a classic case of supply and demand. The demand for biodiversity is poor countries is relatively low compared to rich ones, so the supply of biodiversity in poor countries will be relatively less that it will be in rich areas. Almost anytime loss of biodiversity or a rise in extinction rates are discussed, one of the main causes is often economic development. This article take a different approach and discusses how economic growth may be a large reason we are where we are (environment wise) but this same development may also be a large reason why we begin to turn the corner and actually gain biodiversity while improving the environment. Because of this different take on the relationship between economic development and biodiversity, this article is a unique pice of literature in the economics community. The article brings up interesting points but is generally near sighted about the issue of biodiversity. The relatively rich counties of the present have been the ones that have historically produced the most pollution over the industrial revolution. As a result of operations that were extremely harmful to local ecosystems, these countries prospered while others took a relatively small tole on their local ecosystems by not participating in the Industrial Revolution. A market for pollution like the one in class was not mentioned in the article. There is the real possibility that rich countries may be outsourcing their pollution to poorer one thus increasing the biodiversity discrepancy between rich and poor countries. The article does not mention how citizens of poor countries do not have a high WTP for biodiversity because their basic needs fail to be met. People are referred to as being either members of poor or rich countries which
  • 4. removes the reader from the fact that biodiversity loss is a worldwide issue that can only be addresses with a unified effort between everyone on earth. Overall, the article provides an interesting perspective on the subject of biodiversity loss, but fails to address the possibility that mankind may have already done irreparable damage to biodiversity and the environment as a whole. The second article that was reviewed, Economic and Environmental Benefits of Biodiversity, dealt with the value of biodiversity services. Data is compiled from previous research to assist the authors in arriving at the value that biodiversity brings to the United States and the world. This paper breaks down the monetary value of biodiversity into categories found in Table 2 and uses the known cost of similar activities to assign a dollar value to the biodiversity services. The main conclusion is that the conservative total value of services provided to humanity by the wide range on species on earth is $2.928 trillion and $319 billion in the United States alone (Pimental et al., 1997). One of the main points of biodiversity preservation is that the supply of biodiversity services is dependent on human activity. The more negative impact we have on biodiversity, the less services we receive. It is to our advantage to preserve and encourage biodiversity because it not only benefits the environment, but it also translates to more biodiversity services that we essentially get for free. The issue of biodiversity is a classic example of the basis of economics which involves how society disperses scarce resources while dealing with unlimited demand. The optimal level of biodiversity is not achieved because it is a public good which is typical because people are willing to pay less for public goods due to a tendency to think on an individual basis. Mankind has historically given more consideration to present needs than needs
  • 5. of future generations. As a result, we have natural resource depletion and specifically biodiversity loss. The article contributes to research literature by taking a systematic and conservative approach to estimate total value of biodiversity services to humans and to the natural environment as a whole. The paper states that this research is vital because it can be used as a basis for implementing policies that encourage enhanced biodiversity based on its large economic contribution to mankind. Source: BioScience, Vol. 47, No. 11 Economic and Environmental Benefits of Biodiversity is effective in illustrating the overall contribution of biodiversity. When dealing with costs that can sometimes be difficult to
  • 6. estimate, it is important to be conservative in estimates. The authors of this paper take a conservative approach which improves the accuracy of any policies that come about as a result of this research. A wide range of biodiversity services are taken into account which give an accurate representation of the net social benefits received from them. Based on this, I feel that the authors wrote a very accurate and interesting paper that was a valuable addition to the research community.
  • 7. References Pimm S.L., Russell G.J., Gittleman J.L., & Brooks, T.M. (1995). The future of biodiversity. Science 269, pp. 347-350. Economist, The (2013). Hang On: More growth, not less, is the best hope for averting a sixth great extinction. The Economist, Hang On, September 14, 2013. Retrieved from http:// www.economist.com/news/leaders/21586346-more-growth-not-less-best-hope-averting- sixth-great-extinction-hang Pimentel, D., Wilson, C., McCullum, C., Huang, R., Dwen, P., Flack, J., Tran, Q., Saltman, T., & Cliff, B. (1997). Economic and Environmental Benefits of Biodiversity. BioScience, Vol. 47, No. 11, pp. 747-757.