Monday, September 9, 2013

Biodiversity as a global public good

Below is an excerpt from a recently published manuscript regarding the conservation of biodiversity.  

Citation:  Rands, Michael RW, et al. "Biodiversity conservation: challenges beyond 2010." Science 329.5997 (2010): 1298-1303.

"...To address the continued global loss of biodiversity, we propose the pursuit of three interconnecting priorities: (i) to manage biodiversity as a public good, (ii) to integrate biodiversity into public and private decision-making, and (iii) to create enabling conditions for policy implementation. 

Managing biodiversity as a public good. An appreciation of biodiversity as a public good (65) and of its economic value (66) is, we believe, central to future effective conservation. Biodiversity loss is rarely the intended consequence of human actions; more often it is an unintended side effect of decisions taken for other reasons—an economic “externality” (67). Biodiversity is a special kind of externality, as the impacts of a particular action are often distant in space and time (e.g., local rainforest loss may affect the global carbon cycle, with consequences for future generations). This makes effective regulation difficult, as no single body has jurisdiction over the world’s biodiversity. It also makes transaction-based solutions difficult, because those who damage biodiversity are often widely separated, in space or time, from those who experience the consequences. Actors have few incentives or opportunities to change their behavior, whether they are smallholder households planning their annual agricultural cycles or large multinational companies determining their corporate priorities. Thus, understanding and managing biodiversity as a global public good, which must be provided through conscious collective choices (68), is fundamental to achieving its conservation (5).
The recognition of biodiversity as a public good is not a new concept, and in recent years economists have made substantial progress in developing valuation techniques that quantify the local and global benefits of biodiversity (69). Measuring the economic values of biodiversity (5) and estimating spatially explicit economic values of services across landscapes to inform management decisions (70) are vital. However, making these values explicit is insufficient to bring about a change in behavior, unless supporting public policies are in place that either reward positive individual actions or penalize harm. Economists need to work more closely with conservationists and policy makers to develop intervention strategies that shift individual actors toward more biodiversity-friendly behavior, using regulatory devices as well as incentives, thereby securing the provision of biodiversity conservation as a global public good. 

Integrating biodiversity into public and private decision-making. The value of biodiversity must be made an integral element of social, economic, and political decision-making, as is starting to happen with carbon and climate change. Government, businesses, and civil society all have crucial roles in this transition.
For government, maintenance of stocks of natural capital must become an explicit, accountable, and implemented element of policy. Concern for biodiversity cannot be restricted to a nation’s environment ministry but must extend across all sectors of government, such as treasury, industry, and defense. Policy change will require clear and cost-effective metrics of natural capital consumption and depletion (71) and the development of systems of public accounts that include both sustainability (72) and the specific issue of biodiversity loss (5). Government staff and politicians may need in-service training in biodiversity science and ecological economics, with effective research support. Research investment will need to focus on applied transdisciplinary problems. Government will need to remove perverse subsidies detrimental to biodiversity, such as in agriculture, forestry, and fisheries. Fishing subsidies encourage overexploitation of two-thirds of fish stocks across the globe, threatening both the fishing industry (worth $80 billion to $100 billion per year) and the 27 million people dependent on it (5, 73). Government policy needs to integrate biodiversity conservation, poverty alleviation, and the demands of a sustainable economy (74) to meet the Millennium Development Goals (75). 

The actions of the private sector are central to the future of biodiversity, as the CBD recognized in the context of the 2010 biodiversity target. Corporate environmental performance is increasingly important to investors and therefore corporate leaders (76), and many initiatives now exist to address corporate biodiversity impacts in particular business sectors or individual corporations (e.g., in minerals extraction). Yet a recent survey found that only two of the Financial Times Stock Exchange (FTSE) 100 companies recognize biodiversity to be of strategic importance to their business (5). Biodiversity lacks the visibility achieved by energy and climate change as issues important to corporate decision makers (77). Consistent government regulation is important in providing a level playing field for corporate environmental innovation and competition, but there are challenges in extending regulation internationally (78)...."

There's a lot of stuff here related to our class. Personally I was really excited to read this in Science, as these are messages that colleagues and I have been trying to deliver for a long time. I highly recommend reading the whole article.

Anyone care to attempt a summary sentence or two?


Stephanie chizmar said...

Declaring biodiversity as a global public could can benefit the Earth as a whole through creating economic costs and incentives concerning the "use" of biodiversity. However, without the proper management and regulation, Hardin's prediction in his work could become reality concerning biodiversity. Ultimately, with comprehensive regulations, making biodiversity a global public good can unite the private and public sectors in promoting behaviors that benefit biodiversity.

Dr. Peter Schuhmann said...

A comment!! A real comment! Woo-hoo! Nice work Stephanie. As with other public goods, understanding the costs (often opportunity costs) of degrading/losing biodiversity is a critical step in moving toward effective and efficient management.

Other thoughts?

What are the characteristics of biodiversity that allow it to be characterized as a public good?

Becky Doane said...

I read the excerpt fully but only skimmed the entire article finding that the solutions were the most interesting part of the paper. Appreciating biodiversity as a public good does not seem to be possible to me. In order to encompass all the species on this plant into a quantified value is impossible. This is because so many species have still gone undiscovered. Terry Erwin estimated that 30 million species of tropical arthropods exist with only a portion of those discovered (
You can’t put a cost value on something when you can’t quantify its potential benefits for society. It seems that the other solution they present is the most viable where conservation education could be expanded to all sectors of the government. The value of natural resources should be integrated into all aspects of the way people live.
I did have a question, though: The government’s subsidies are having negative effects on fisheries, allowing for exploitation. Subsidies are what we covered in class as a solution to positive externalities, but wouldn’t a decrease in fishery population be a negative externality?

Dr. Peter Schuhmann said...


Appreciating biodiversity as a public good means understanding that markets will fail to provide the efficient amount, so some sort of government protection or provision is required. I'm not sure how you can argue that this is not possible.

If you are arguing against valuation of biodiversity, I don't think anyone would disagree that valuation is often difficult. But does this mean we should continue to use the default value (ie: zero)?

Moreover, I disagree that we cannot quantify the benefits of biodiversity to society. We most certainly can (albeit imperfectly), and in doing so we often make a powerful and easily understood case for conservation. There are hundreds of examples. Put "The economic value of biodiversity" into a search engine and see what you find.

A few things to consider:
1. Economists don't go around trying to value things just for the sake of doing it. We engage in valuation when there is a real policy reason, such as when there is a tradeoff that society is going to make that policy makers want and need to understand. For example, understanding what stands to be lost to a development project or gained via a conservation project.

2. There is almost never a reason to attempt to understand the value of the entire planet's biodiversity (this seems to be what you're worried about when you note that we don't know about all the species that are out there). We attempt to value incremental changes to species and systems that we do understand when their values are subject to change. There actually was an attempt at valuing the entire planet's biodiversity. It garnered a ton of attention and was met with a great deal of controversy and criticism ( Of course, the true value of the entire world's biodiversity is infinite, because without it, we're all dead.

3. As I mentioned in class the other day, as individuals and as a society we're doing valuation anyway through our actions and decisions. Valuation simply makes this process explicit and transparent so that we really understand the tradeoffs we're making.

4. Education most certainly has a role to play, but that role is probably limited. For example, you and I are very educated with regard to the environment and the importance of biodiversity, yet we continue to engage in actions that reduce biodiversity every day. Would more education cause you to drive less, eat less meat or donate more to conservation organizations? How about if the price of gas and meat reflected their true costs (ie: much higher) or if you received larger tax breaks for your donations reflecting their true value? Like it or not, monetary incentives matter a lot. If we're going to use them, we should try to get the prices right.

With regard to your last question, yes, ideally subsidies will be directed toward actions that create positive externalities. The authors of this article (and many others, including myself) are suggesting that fisheries subsidies are often a bad idea... we're subsidizing something that generates a negative externality, which is the opposite of what we should be doing. By the way, fisheries subsidies are not the only example of this. Can anyone think of other examples where gov't subsidizes something that really should be taxed?

Dr. Peter Schuhmann said...

Here is a link to a paper that I wrote last year (regarding the economic value of marine biodiversity (coral cover, fish species, etc.) to scuba divers in Barbados:

My coauthors are another economist and 2 biologists. I'll probably present these results in class later in the term, but I thought that I'd post the link now given the confusion that seems to be arising. In the introduction, we attempt to motivate the importance of valuation as a tool for policy making.

Dr. Peter Schuhmann said...

Here is another paper involving estimation of biodiversity value, where we account for the uncertainty mentioned by Becky. This one looks at the value of marine natural products for pharmaceuticals. My co-authors, Drs. Lopez-Legentil and Irwin did their post-docs at UNCWs Center for Marine Science and are now in our department of biology and marine biology.

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