Direct Economic Value of Biodiversity Brook Milligan Department of Biology New Mexico State University Las Cruces, New Mexico 88003 brook@nmsu.edu Fall 2009 Brook Milligan Direct Economic Value of Biodiversity
Economic Markets Adam Smith assumption: economic transactions benefit both parties individuals acting in self interest yield a prosperous society Brook Milligan Direct Economic Value of Biodiversity
Economic Markets Adam Smith assumption: economic transactions benefit both parties individuals acting in self interest yield a prosperous society Economic issues associated with the environment not all costs/benefits included within a transaction externalities: hidden costs and benefits Tragedy of the Commons Brook Milligan Direct Economic Value of Biodiversity
Economic Markets Adam Smith assumption: economic transactions benefit both parties individuals acting in self interest yield a prosperous society Economic issues associated with the environment not all costs/benefits included within a transaction externalities: hidden costs and benefits Tragedy of the Commons Potential solutions convert external costs to internal ones give economic value to current external costs create ownership rights to resources to create long-term interests Brook Milligan Direct Economic Value of Biodiversity
National Economies Often sustained by environmental degradation Gross domestic product (GDP): measure of economic productivity Examples Costa Rica Australia Russia and the “Stans” Brook Milligan Direct Economic Value of Biodiversity
Aral Sea Brook Milligan Direct Economic Value of Biodiversity
Aral Sea Fourth largest inland saline body of water 68,000km 2 in surface area 1,100km 3 in volume Brook Milligan Direct Economic Value of Biodiversity
Aral Sea Fourth largest inland saline body of water 68,000km 2 in surface area 1,100km 3 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 Brook Milligan Direct Economic Value of Biodiversity
Aral Sea Brook Milligan Direct Economic Value of Biodiversity
Aral, Kazakhstan Brook Milligan Direct Economic Value of Biodiversity
Aral, Kazakhstan Brook Milligan Direct Economic Value of Biodiversity
Moynaq, Uzbekistan Brook Milligan Direct Economic Value of Biodiversity
Direct Economic Benefit of Aral Sea Aral Sea fishing industry employment: 40,000–60,000 production: one-sixth of the Soviet Union’s entire fish catch fish processing industry Muskrat trapping tributary deltas: Amu Darya and Syr Darya yield: 500,000 muskrat pelts annually Brook Milligan Direct Economic Value of Biodiversity
Cause of Aral Sea Decline Water project development Canal system Qaraqum Canal, Turkmenistan largest irrigation and water supply canal in the world 1,375km in length 13km 3 water carried annually navigable over much of its length Brook Milligan Direct Economic Value of Biodiversity
Cause of Aral Sea Decline Water project development Canal system Qaraqum Canal, Turkmenistan largest irrigation and water supply canal in the world 1,375km in length 13km 3 water carried annually navigable over much of its length almost 50% of water escapes lakes and ponds created along the canal rise in groundwater levels widespread soil salinization Russian cotton production Uzbekistan a major world cotton producer, but . . . increased soil salinity increased water requirements increased health problems Brook Milligan Direct Economic Value of Biodiversity
Economic Valuation of Natural Resources Types of valuation Direct use value: value of harvested products put into human use productive use value: marketed harvests consumptive use value: non-marketed harvests, local consumption In situ value: value of unharvested resources put to other use indirect use value: use not involving harvest future value or option value existence value Brook Milligan Direct Economic Value of Biodiversity
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