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Products: Environmental Valuation

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Vog: Using Volcanic Eruptions to Estimate the Health Costs of Particulates

The negative consequences of long-term exposure to particulate pollution are well-established but many studies find no effect of short-term exposure on health outcomes. The high correlation of industrial pollutant emissions complicates the estimation of the impact of individual pollutants on health. In this study, we use emissions from Kilauea volcano, which are uncorrelated with other pollution sources, to estimate the impact of pollutants on local emergency room admissions and a precise measure of costs. A one standard deviation increase in particulates leads to a 23-36% increase in expenditures on ER visits for pulmonary outcomes, mostly among the very young. Even in an area where air quality is well within the safety guidelines of the U.S. Environmental Protection Agency, this estimate is larger than those in the existing literature on the short-term effects of particulates. No strong effects for cardiovascular outcomes are found.

Revised: Posted August 14, 2017


Benefit-Cost Analysis of Watershed Conservation

The objectives of this report are (1) to review studies that estimate the relationship between watershed conservation activities and groundwater recharge in Hawai‘i and (2) to estimate the volume of freshwater yield saved per dollar invested in conservation at several sites on Hawai‘i Island. We conclude from the literature review that more work should be done to integrate information from smaller-scale studies of invasive-native water use differences into regional water balance models. This would help to inform decisions related to watershed conservation activities statewide. Using budget information obtained from the Nature Conservancy and the Division of Forestry and Wildlife as well as publicly available landcover and evapotranspiration (ET) data, we estimate the gallons of freshwater yield saved per dollar invested in watershed conservation. Under baseline conditions—a 3 percent discount rate and a 10 percent rate of spread for existing invasive plant species—roughly 400 gallons are saved on average across management sites per dollar invested. In other words, about $2.50 in present value terms is required to protect every one thousand gallons of freshwater over a 50 year time horizon. Annual benefits increase continuously as the avoided loss of freshwater yield rises over time, while conservation costs tend to be front-loaded, as a result of high fence installation and ungulate removal costs. Thus, it is important to consider the long run when comparing the benefits and costs of conservation activities.

working paper

Benefits and Costs of Implementing the IAPMO Green Plumbing and Mechanical Code Supplement in Hawaii

We calculate the benefits and costs of implementing the International Association of Plumbing and Mechanical Officials (IAPMO) 2012 Green Plumbing and Mechanical Code Supplement (GPMC) for various building types in Hawaii, with particular emphasis on water-use efficiency provisions in the code. Benefits of the GPMC are measured as water savings, where baseline usage is estimated in accordance with the 2012 Uniform Plumbing Code (UPC), which has been recently adopted by the state and will soon be adopted by the counties. We also monetize those benefits at the household level (water bill savings) and at the state level (cost savings to the water supply boards and departments throughout the state). Based on discussions with plumbers, building contractors, developers, architects, mechanical engineers, planners, and other water specialists, as well as an assessment of prices at major home improvement stores and other online retailers, we estimate the costs of GPMC compliance for new structures planned for Hawaii over the next decade. If the GPMC is implemented, the payback period is two years and the net present value assuming a discount rate of zero is $15.13 million. For a discount rate of 5%, the NPV is $11.29 million.


Foundations for Hawai‘i’s Green Economy: Economic Trends in Hawai‘i Agriculture, Energy, and Natural Resource Management

It is clear from previous studies that Hawai‘i’s natural capital is highly valued and should be managed accordingly. For example, Kaiser et al. (1999) estimate that the Ko‘olau watershed provides forest benefits valued between $7.4 and $ 14 billion, comprised of water resource benefits ($4,736-­‐9,156 million), species habitat benefits ($487-­‐1,434 million), biodiversity benefits ($0.67-­‐5.5 million), subsistence benefits ($34.7-­‐131 million), hunting related benefits ($62.8-­‐237 million), aesthetic values ($1,040-­‐3,070 million), commercial harvest ($0.6-­‐2.4 million), and ecotourism ($1,000-­‐2,980 million). Hawai‘i’s coral reefs alone are estimated to generate at least $10 billion in present value, or $360 million per annum (Cesar and van Beukering, 2004). Another recent study considering the value to all U.S. households finds that increasing the current size of marine protected areas in Hawai‘i from 1% to 25% and restoring five acres of coral reefs annually would generate $34 billion per year (Bishop et al., 2011).2 While many studies that place value on Hawai‘i’s natural resources have been undertaken in recent years, little is known about the economic impacts generated by agencies charged with protecting and managing these important resources in Hawai‘i. To that end, an online survey of natural resource managers in Hawai‘i was conducted, and the results are summarized in section 6 of this report.


Optimal Provision and Finance of Ecosystem Services: the Case of Watershed Conservation and Groundwater Management

Payments for ecosystem services should be informed by how both the providing-resource and the downstream resource are managed. We develop an integrated model that jointly optimizes conservation investment in a watershed that recharges a downstream aquifer and groundwater extraction from the aquifer. Volumetric user-fees to finance watershed investment induce inefficient water use, inasmuch as conservation projects actually lower the optimal price of groundwater. We propose a lump-sum conservation surcharge that preserves efficient incentives and fully finances conservation investment. Inasmuch as proper watershed management counteracts the negative effects of water scarcity, it also serves as adaptation to climate change. When recharge is declining, the excess burden of non-optimal watershed management increases.

working paper


Optimal Management of a Hawaiian Coastal Aquifer with Near-Shore Marine Ecological Interactions

We optimize groundwater management in the presence of marine consequences of submarine groundwater discharge (SGD). Concern for marine biota increases the optimal steady-state head level of the aquifer. The model is discussed in general terms for any coastal groundwater resource where SGD has a positive impact on valuable near-shore resources. Our application focuses of the Kona Coast of Hawai’i, where SGD is being actively studied and where both near-shore ecology and groundwater resources are serious socio-political issues. To incorporate the consequences of water extraction on nearshore resources, we impose a safe minimum standard for the quantity of SGD. Efficient pumping rates fluctuate according to various growth requirements on the keystone marine algae and different assumptions regarding recharge rates. Desalination is required under average recharge conditions and a strict minimum standard, and under low recharge conditions regardless of minimum standards of growth.

working paper

The Value of a Wave: An Analysis of the Mavericks Region Half Moon Bay, California

This study was commissioned by the Save the Waves Coalition to determine the value of the Mavericks surf area to the local community and beyond. 

working paper

Invasive Species Control over Space and Time: Miconia calvescens on Oahu, Hawaii

We use Geographical Information Systems (GIS) to map the current and future populations of an invasive species, Miconia calvescens, on the island of Oahu, Hawaii, and the potential damages to water quantity, water quality, endangered bird habitat, and native habitat housing endangered plants, snails, and insects. We develop a control cost function that includes locating and treating Miconia plants. Using optimal control theory, we find the spatially dependent optimal population levels of Miconia and the paths to these populations over time.

Published: Burnett, K. M., Kaiser, B. A., and Roumasset, J. A., 2007. Invasive Species Control over Space and Time: Miconia calvescens on Oahu, Hawaii. Journal of Agricultural and Applied Economics, 39 (October 2007), 125-132.

Working Paper version

Economic Impacts of E. Coqui frogs in Hawaii

Hawaii’s geographical isolation has resulted in the development of unique and fragile ecosystems in which the arrival of a new species may create dramatic changes in the ecology, and now the economy, of the islands. Successful establishment rates for new species before the arrival of humans in the early 1st millennium AD may have been as low as one new species every 10,000 years (Loope, 1997). Only one terrestrial mammal, a bat (now extinct), reached the island chain without human assistance. Many other suborders are unrepresented; for example, the islands have no native snakes or frogs.

working paper

Environmental Resources and Economic Growth

This chapter assesses the nature and degree of environmental degradation and resource depletion in China and their relationship to economic activity and envi- ronmental policies. We describe regulatory and other policies and consider their political economy determinants. Inasmuch as this objective can only be partially achieved, we hope to contribute to a research agenda for environmental and resource economics in China.

Book Chapter

Optimal Prevention and Control of Invasive Species: The Case of the Brown Treesnake

This dissertation examines the optimal management of a nuisance species that threatens but is not thought to be prevalent in an ecosystem. The three central chapters focus on integrated prevention and control of the Brown Treesnake (Boiga irregularis) in Hawaii.


Models of Spatial and Intertemporal Invasive Species Management

Prepared for the NCEE Valuation for Environmental Policy: Ecological Benefits Conference April 23-24, 2007.

uhero project report

The Economic Value of Watershed Conservation

Watershed conservation creates benefits within and beyond the management area of interest. Direct benefits are those realized in the watershed itself, such as improved water quality and quantity, and biodiversity protection. Additionally, the health of a watershed has profound implications on near-shore resources below its reaches, including beaches and coral reefs. This chapter reviews the major benefits of watershed conservation and discusses the economic value of these activities.

working paper

Economic lessons from control efforts for an invasive species: Miconia calvescens in Hawaii

Once established, invasive species can rapidly and irreversibly alter ecosystems and degrade the value of ecosystem services. Optimal control of an unwanted species solves for a trajectory of removals that minimizes the present value of removal costs and residual damages from the remaining 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, where tree density is lower and search costs higher, optimal policy calls for deferring removal expenditures until the steady state population is reached.

Published: Burnett, K. M., Kaiser, B. A., and Roumasset, J. A., 2007.  Economic lessons from control efforts for an invasive species: Miconia calvescens in Hawaii. Journal of Forest Economics, 13, 151-167. 

Working Paper version

Optimal Public Control of Exotic Species: Preventing the Brown Tree Snake from Invading Hawai‘i

This paper develops a theoretical model for the efficient establishment of economic policy pertaining to invasive species, integrating prevention and control of invasive species into a single model of optimal control policy, and applies this model to the case of the Brown tree snake as a potential invader of Hawaii.

working paper

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