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Econ 131 lecture 14

Econ 131 lecture 14 - Schedule Today Environmental benets...

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Schedule Today Environmental benefits: Valuation Problem set 5 available on TED (TA session next Monday evening) Thursday Intro. to Natural Resources (Chapter 6) From Lecture 3 Measure benefits (or avoided damages) by people’s willingness-to-pay (WTP) Anthropocentric and individualistic measure Stated preference Take a survey; ask people what their WTP is for particular environmental amenities Revealed preference See how much people actually paid for some amenity (e.g. to live in a neighborhood with less pollution, or to buy BPA-free water bottles)
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Today Measuring the WTP for ecosystems and their services A revealed preference approach, but where people might not be aware that they are paying for the services of an ecosystem Accounting and natural science The science tells you all the various benefits an ecosystem provides The accountant adds them up, assigns a value to particular ecosystems Example: Ecosystems affected by the 2010 gulf oil spill Valuing a Rainforest (Still anthropocentric and individualistic, but trying to account for all the positive externalities it provides) A taxonomy of values (pp. 38-39 in the text) - Use value - In ecosystems convenient to divide further into consumptive (timber) and non-consumptive (tourism?) - Non-use value - Existence value, and option value (e.g. value of preservation for future generations)
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Valuing a Rainforest How do public/private goods relate? - The concepts of goods that are rival or non-excludable help us see where externalities or free-riding are likely - For valuing an ecosystem we want to include all the services it provides. Some will be public goods (e.g. existence value) and some private (e.g. timber) - Both should be included in the estimate if we are considering destroying the ecosystem 1. Use Value (consumptive) Seafood Crops & Livestock Forest Products
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2. Use Value (non-consumptive) Climate Stabilization Water Supply Fire Prevention Flood Control Sedimentation Control Pest Control Pollination Recreation Eco-tourism Scenic beauty 3. Non-use Values Existence Educational value Biodiversity Option value for medicine, adaptation, future generations
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How many, which combinations, what abundances, of species are required to sustain and fulfill human life? ...we don’t know (yet?) What Elements of Ecosystems are Most Important? Example from Recent Research: Crop Pollination - 2/3 of crops require it - Honeybee declines worldwide - Wild bees replacing them, how can we value their habitat?
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Rainforest as an Input to Coffee Production Measure one piece of ecosystem value Do forest pollinators benefit nearby coffee?
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