[Coral-List] Economic Valuation and market based conservation

Ulf Erlingsson ceo at lindorm.com
Fri Aug 19 17:09:59 EDT 2011

John, you mention two ways, putting a value on resources and putting  
a value on the income. The sustainability-index idea that I have  
(copied below) is based on a different approach:

Estimate degree of sustainability, and tax usage (or pollution, or  
destruction of ecosystems) until the usage reaches a sustainable level.

That was it is the USERS who put the value on the resource through  
their pocket books. It will automatically reorient society's  
technology towards a sustainable path, if at all possible, and IF THE  
SCIENTISTS can define the sustainable level well enough.

 From the point of view of scientists it would be great because they  
would be in huge demand. But beware of corruption...


On 2011-08-18, at 13:41, John McManus wrote:

> I would like to see coral reef valuation efforts restricted to  
> cautious
> assessments of income generation per unit time, rather than the  
> assessment
> of a fixed value per unit area. Attempts to assess a value per unit  
> area
> usually involve setting a  positive rate of discounting. The value  
> one comes
> up with is strongly dependent on the chosen rate of discounting.  
> And yet,
> the choice of discounting rate as applied to ecosystems is highly
> controversial (Norgaard and Howarth 1991). As mentioned by others in
> previous posts, there are strong arguments for using a negative  
> rate of
> discounting with regard to particular ecosystems, particularly if  
> one is
> concerned about intergenerational transfer of the resource and if one
> accounts for the increasing value of remaining high quality coral  
> reefs as
> others decline in quality (Hellweg et al. 2003). In some sense, the  
> value of
> a coral reef which exists over long periods of time in the future  
> may be
> essentially infinite.
> The assessment of annual income from a natural resource is a little  
> more
> tractable. However, as Hector Reyes pointed out, it makes a huge  
> difference
> as to who gets the income. This is a general problem with many  
> bioeconomic
> models and concepts derived from them (including many fisheries  
> models such
> as the Gordon-Schaefer Model). There is often an assumption that  
> one should
> maximize the total net income available from a natural resource  
> (social
> rent), as if it did not matter whether the income goes to local  
> coastal
> dwellers or wealthy corporations based in other countries. As anyone
> involved in participatory coastal management can tell you, success  
> is often
> strongly linked to ensuring that local resources benefit local people.
> Hellweg S, Hofstetter TB, Hungerbuhler K (2003). Discounting and the
> environment: should current impacts be weighted differently than  
> impacts
> harming future generations? The International Journal of Life Cycle
> Assessment 8(1): 8-18.
> Norgaard RB, Howarth RB (1991) Sustainability and the problem of  
> valuation.
> Pages 58-74 in Costanza R. Ecological Economics, Columbia Press, NYC.
> Note: though aging a bit, the latter book lays out the foundations and
> challenges of Ecological Economics very clearly in simple terms,  
> and these
> have not changed much. I recommend in particular the chapters by  
> Daly and
> Hardin.
> Cheers!
> John
> John W. McManus, PhD
> Director, National Center for Coral Reef Research (NCORE)
> Professor, Marine Biology and Fisheries
> Coral Reef Ecology and Management Lab (CREM Lab)
> Rosenstiel School of Marine and Atmospheric Science (RSMAS)
> University of Miami, 4600 Rickenbacker Causeway, Miami, 33149
> jmcmanus at rsmas.miami.edu      http://ncore.rsmas.miami.edu/
>  Phone: 305-421-4814
> "Far better an approximate answer to the right question, which is  
> often
> vague,
>    than an exact answer to the wrong question, which can always be  
> made
> precise."
>      --John Tukey, Statistician, National Medal of Science and IEEE  
> Medal of
> Honor
> _______________________________________________
> Coral-List mailing list
> Coral-List at coral.aoml.noaa.gov
> http://coral.aoml.noaa.gov/mailman/listinfo/coral-list

The way I see the failure of economics can best be described by a
similitude. Imagine that Nature is a bank vault full of money.
Economic activities drill holes in the walls and extract the money.
The amount of money they extract is the "value" of what they
"create", but the amount of decreasing resources inside remain
unknown, or even unknowable.

Many years ago I made a simple index that relates present use levels
to sustainable use levels. This refers to natural resources.
Pollution is regarded as the usage of the resource of clean nature,
and the sustainable level is the one that nature can absorb (e.g. by
breaking down a toxic compound). Thus, one equation can be used for
all situations. The crux is just to find out what the sustainable
level is.

When it comes to renewable resources the sustainable level is the
rate of renewal. When it comes to cyclically renewed resources, such
as glacial deposits, the renewal rate is [amount / length of an ice
age cycle]. When it comes to substances formed in stars, it is of
course the age of our solar system we should consider.

Rather than writing it all here I refer to a popular presentation at

Ulf Erlingsson

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