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Products: Environmental Valuation

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Economic impacts of non-indigenous species: Miconia and the Hawaiian economy

Imperfect scientific information regarding potential invasiveness, differences between private and public outcomes for individual decisions regarding planting, and inadequate prevention activity combine to impose costs through a change in native ecosystems susceptible to invasion by hardy, rapidly reproducing non-indigenous species. Concepts and tools from economic theory that may improve policy decisions are explored through the specific example of Miconia calvescens in Hawaii. Rapid expansion of Miconia calvescens, an ornamental tree introduced to several Pacific Islands over the last century, threatens local watersheds, endangered species, and recreational and aesthetic values in the Hawaiian and Society Islands. Potential welfare losses from the unchecked spread of Miconia in Hawaii are illustrated. Policy options investigated include accommodation of these losses, efforts at containment, or eradication. Estimates are determined through an optimal control model describing the potential expansion of the weed and its control costs and damages. Results suggest that cost-effective policies will vary with the level of invasion as well as the expected net benefits from control efforts.

working paper

Efficient Water Allocation with Win-Win Conservation Surcharges: The Case of the Ko‘olau Watershed

The one-demand Hotelling model fails to explain the observed specialization of non-renewable resources. We develop a model with multiple demands and resources to show that specialization of resources according to demand is driven by Ricardian comparative advantage while the order of resource use over time is determined by Ricardian absolute advantage. An abundant resource with absolute advantage in all demands must be initially employed in all demands. When each resource has an absolute advantage in some demand, no resource may be used exclusively. The two-by-two model is characterized. Resource and demand-specific taxes are shown to have significant substitution effects. 

working paper

Valuing Indirect Ecosystem Services: the Case of Tropical Watersheds

Mitigating the harmful effects of development projects and industries (negative environmentalism) is inadequate, especially in resource-dependent economies whose resources are at risk from other forces. While positive environmentalism includes conservation projects, the non-market benefits of such projects are difficult to evaluate. This paper provides and illustrates a method for evaluating the indirect, watershed benefits of a tropical forest, without resorting to survey methods. The conservation of trees prevents a reapportionment from groundwater recharge to runoff that would otherwise occur. The value of the water saved is then valued at the shadow prices obtained from an optimizing model. An illustration of the model shows that watershed conservation projects may have very high payoffs, even before assessing existence values and other forest amenities.

working paper

Control of Invasive Species: Lessons from Miconia in Hawai'i

 The threat of invasive species stems from their ability to rapidly and irreversibly change ecosystems and degrade the value of ecosystem services. Optimal control of a pre-established exotic pest minimizes the costs of population reduction plus the residual damages from the remaining pest population. The shrubby tree, Miconia calvescens, is used to illustrate dynamic policy options for a forest invader. Potential damages to Hawaii's forest ecosystems are related to decreased aquifer recharge, biodiversity, and other ecosystem values. We find that population reduction is the optimal management policy for the islands of Oahu, Maui, and Hawaii. On the island of Kauai, however, optimal policy calls for deferring control expenditures until the (larger) steady state population is reached.

working paper

Mitigating Runoff As Part of an Integrated Strategy for Nearshore Resource Conservation

This report first presents theoretical considerations for integrated resource management of forested watershed and nearshore resources, then estimates current economic benefits from nearshore resources (beaches and reef) as well as expected economic benefits, in the form of preserved nearshore resource benefits, from conservation of forest resources.

Uhero project report

Environmental Valuation and the Hawaiian Economy

Economic planning and policy analysis are commonly criticized for their failure to properly account for adverse effects of economic development on the environment and other interactions between nature and the market economy. The limited and piecemeal curbs on land development projects, e.g. as provided by environmental impact requirements, fail to diagnose the major negative impacts of the economy on development and to direct available resources to the most serious environmental problems in a cost-effective manner.

working paper

Political economy of protecting unique recreational resources: Hanauma Bay, Hawai'i


Published: Mak, J. and Moncur, J., 1998. Political economy of protecting unique recreational resources: Hanauma Bay, Hawai'i.  Ambio, 27 (3), 217-223.

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