IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v89y2013icp115-122.html
   My bibliography  Save this article

More than total economic value: How to combine economic valuation of biodiversity with ecological resilience

Author

Listed:
  • Admiraal, Jeroen F.
  • Wossink, Ada
  • de Groot, Wouter T.
  • de Snoo, Geert R.

Abstract

The assessment of total economic value has become a pragmatic and popular approach in nature valuation, yet criticisms have been raised. One major point of critique is that total economic value bases the monetary value of ecosystems purely on the flow of human benefits of services of ecosystems and consequently ignores questions of sustainable use of natural capital per se. This paper explains why total economic value by itself is in principle an inadequate concept to guide sustainable use of ecosystems and gives an overview of essential ecological theory that needs to be taken into account in addition to total economic value to fully include ecosystem sustainability. The paper concludes with a framework for combining ecological theory with economic valuation. The key elements here are theoretical ecological insights about ecosystem resilience and portfolio theory which offers an economic perspective on investment in biodiversity. Portfolio theory puts total economic value in a framework where investment in biodiversity is expanded to cover functional diversity and mobile link species in order to maintain ecosystem resilience and so fosters sustainable use of ecosystems.

Suggested Citation

  • Admiraal, Jeroen F. & Wossink, Ada & de Groot, Wouter T. & de Snoo, Geert R., 2013. "More than total economic value: How to combine economic valuation of biodiversity with ecological resilience," Ecological Economics, Elsevier, vol. 89(C), pages 115-122.
    • Handle: RePEc:eee:ecolec:v:89:y:2013:i:c:p:115-122
    DOI: 10.1016/j.ecolecon.2013.02.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800913000700
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecolecon.2013.02.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Felix Schläpfer & Michael Tucker & Irmi Seidl, 2002. "Returns from Hay Cultivation in Fertilized Low Diversity and Non-Fertilized High Diversity Grassland," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 89-100, January.
    2. Eppink, Florian V. & van den Bergh, Jeroen C.J.M., 2007. "Ecological theories and indicators in economic models of biodiversity loss and conservation: A critical review," Ecological Economics, Elsevier, vol. 61(2-3), pages 284-293, March.
    3. Marten Scheffer & Steve Carpenter & Jonathan A. Foley & Carl Folke & Brian Walker, 2001. "Catastrophic shifts in ecosystems," Nature, Nature, vol. 413(6856), pages 591-596, October.
    4. Common, Mick & Perrings, Charles, 1992. "Towards an ecological economics of sustainability," Ecological Economics, Elsevier, vol. 6(1), pages 7-34, July.
    5. Martin L. Weitzman, 2000. "Economic Profitability Versus Ecological Entropy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(1), pages 237-263.
    6. Forest Isbell & Vincent Calcagno & Andy Hector & John Connolly & W. Stanley Harpole & Peter B. Reich & Michael Scherer-Lorenzen & Bernhard Schmid & David Tilman & Jasper van Ruijven & Alexandra Weigel, 2011. "High plant diversity is needed to maintain ecosystem services," Nature, Nature, vol. 477(7363), pages 199-202, September.
    7. Farber, Stephen C. & Costanza, Robert & Wilson, Matthew A., 2002. "Economic and ecological concepts for valuing ecosystem services," Ecological Economics, Elsevier, vol. 41(3), pages 375-392, June.
    8. H. Spencer Banzhaf & James Boyd, 2012. "The Architecture and Measurement of an Ecosystem Services Index," Sustainability, MDPI, vol. 4(4), pages 1-32, March.
    9. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    10. Nunes, Paulo A. L. D. & van den Bergh, Jeroen C. J. M., 2001. "Economic valuation of biodiversity: sense or nonsense?," Ecological Economics, Elsevier, vol. 39(2), pages 203-222, November.
    11. Brian Walker & Leonie Pearson & Michael Harris & Karl-Göran Maler & Chuan-Zhong Li & Reinette Biggs & Tim Baynes, 2010. "Incorporating Resilience in the Assessment of Inclusive Wealth: An Example from South East Australia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 183-202, February.
    12. Peter A. Diamond & Jerry A. Hausman, 1994. "Contingent Valuation: Is Some Number Better than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 45-64, Fall.
    13. Oliver Fromm, 2000. "Ecological Structure and Functions of Biodiversity as Elements of Its Total Economic Value," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(3), pages 303-328, July.
    14. Shahid Naeem & Shibin Li, 1997. "Biodiversity enhances ecosystem reliability," Nature, Nature, vol. 390(6659), pages 507-509, December.
    15. Ian Bateman & Georgina Mace & Carlo Fezzi & Giles Atkinson & Kerry Turner, 2011. "Economic Analysis for Ecosystem Service Assessments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(2), pages 177-218, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Daams, Michiel N. & Sijtsma, Frans J. & Veneri, Paolo, 2019. "Mixed monetary and non-monetary valuation of attractive urban green space: A case study using Amsterdam house prices," Ecological Economics, Elsevier, vol. 166(C), pages 1-1.
    2. De Valck, Jeremy & Rolfe, John, 2019. "Comparing biodiversity valuation approaches for the sustainable management of the Great Barrier Reef, Australia," Ecosystem Services, Elsevier, vol. 35(C), pages 23-31.
    3. Saner, Marc A. & Bordt, Michael, 2016. "Building the consensus: The moral space of earth measurement," Ecological Economics, Elsevier, vol. 130(C), pages 74-81.
    4. Villegas-Palacio, Clara & Berrouet, Lina & López, Connie & Ruiz, Aura & Upegui, Alba, 2016. "Lessons from the integrated valuation of ecosystem services in a developing country: Three case studies on ecological, socio-cultural and economic valuation," Ecosystem Services, Elsevier, vol. 22(PB), pages 297-308.
    5. Drupp, Moritz A. & Baumgärtner, Stefan & Meyer, Moritz & Quaas, Martin F. & von Wehrden, Henrik, 2020. "Between Ostrom and Nordhaus: The research landscape of sustainability economics," Ecological Economics, Elsevier, vol. 172(C).
    6. Valentinov, Vladislav, 2014. "K. William Kapp's theory of social costs: A Luhmannian interpretation," Ecological Economics, Elsevier, vol. 97(C), pages 28-33.
    7. Tobon Orozco, David & Molina Guerra, Carlos & Vargas Cano, John Harvey, 2016. "Extent of Expected Pigouvian Taxes and Permits for Environmental Services in a General Equilibrium Model with a natural capital constraint," Borradores Departamento de Economía 15258, Universidad de Antioquia, CIE.
    8. Krause, Marlen S. & Nkonya, Ephraim & Griess, Verena C., 2017. "An economic valuation of ecosystem services based on perceptions of rural Ethiopian communities," Ecosystem Services, Elsevier, vol. 26(PA), pages 37-44.
    9. Retallack, Matthew, 2021. "The intersection of economic demand for ecosystem services and public policy: A watershed case study exploring implications for social-ecological resilience," Ecosystem Services, Elsevier, vol. 50(C).
    10. Kindler, Elisabeth, 2016. "A comparison of the concepts: Ecosystem services and forest functions to improve interdisciplinary exchange," Forest Policy and Economics, Elsevier, vol. 67(C), pages 52-59.
    11. Aryal, Kishor & Ojha, Bhuwan Raj & Maraseni, Tek, 2021. "Perceived importance and economic valuation of ecosystem services in Ghodaghodi wetland of Nepal," Land Use Policy, Elsevier, vol. 106(C).
    12. Lya Sierra & Wilmer Marin & Luis Guillermo Castro & Olga Lucía Hernández-Manrique, 2021. "Economic Valuation of Benefits in Freshwater Ecosystems: Complex Wetlands System Belonging to the San Juan River in the Magdalena Medio Region, Colombia," Sustainability, MDPI, vol. 13(10), pages 1-17, May.
    13. Valente, Donatella & Miglietta, Pier Paolo & Porrini, Donatella & Pasimeni, Maria Rita & Zurlini, Giovanni & Petrosillo, Irene, 2019. "A first analysis on the need to integrate ecological aspects into financial insurance," Ecological Modelling, Elsevier, vol. 392(C), pages 117-127.
    14. Stephen Fox & Yusuf Mubarak & Abdurasak Adam, 2020. "Ecological Analyses of Social Sustainability for International Production with Fixed and Moveable Technologies," Sustainability, MDPI, vol. 12(20), pages 1-15, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matsushita, Kyohei & Yamane, Fumihiro & Asano, Kota, 2016. "Linkage between crop diversity and agro-ecosystem resilience: Nonmonotonic agricultural response under alternate regimes," Ecological Economics, Elsevier, vol. 126(C), pages 23-31.
    2. Useche, Pilar & Blare, Trent, 2014. "The Sustainable Choice: How Gendered Difference in the Importance of Ecological Benefits Affect Production Decisions of Smallholder Cacao Producing Households in Ecuador," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174285, Agricultural and Applied Economics Association.
    3. Finger, Robert & Buchmann, Nina, 2014. "An ecological economic assessment of risk reducing effects of species diversity in grassland production," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182681, European Association of Agricultural Economists.
    4. Barkmann, J. & Glenk, K. & Keil, A. & Leemhuis, C. & Dietrich, N. & Gerold, G. & Marggraf, R., 2008. "Confronting unfamiliarity with ecosystem functions: The case for an ecosystem service approach to environmental valuation with stated preference methods," Ecological Economics, Elsevier, vol. 65(1), pages 48-62, March.
    5. Fabio Pranovi & Gianluca Sarà & Piero Franzoi, 2013. "Valuing the Unmarketable: An Ecological Approach to the Externalities Estimate in Fishing Activities," Sustainability, MDPI, vol. 5(2), pages 1-11, February.
    6. Finger, Robert & Buchmann, Nina, 2015. "An ecological economic assessment of risk-reducing effects of species diversity in managed grasslands," Ecological Economics, Elsevier, vol. 110(C), pages 89-97.
    7. Lim, Terence & Lo, Andrew W. & Merton, Robert C. & Scholes, Myron S., 2006. "The Derivatives Sourcebook," Foundations and Trends(R) in Finance, now publishers, vol. 1(5–6), pages 365-572, April.
    8. McVittie, Alistair & Norton, Lisa & Martin-Ortega, Julia & Siameti, Ioanna & Glenk, Klaus & Aalders, Inge, 2015. "Operationalizing an ecosystem services-based approach using Bayesian Belief Networks: An application to riparian buffer strips," Ecological Economics, Elsevier, vol. 110(C), pages 15-27.
    9. Venn, Tyron J. & Quiggin, John C., 2006. "Accommodating Indigenous Cultural Heritage Values in Resource Assessment," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139919, Australian Agricultural and Resource Economics Society.
    10. Carl Obst & Lars Hein & Bram Edens, 2016. "National Accounting and the Valuation of Ecosystem Assets and Their Services," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 64(1), pages 1-23, May.
    11. Baral, Nabin & Stern, Marc J. & Bhattarai, Ranju, 2008. "Contingent valuation of ecotourism in Annapurna conservation area, Nepal: Implications for sustainable park finance and local development," Ecological Economics, Elsevier, vol. 66(2-3), pages 218-227, June.
    12. Carvalho Ribeiro, Sónia & Soares Filho, Britaldo & Cesalpino, Tiago & Araújo, Alessandra & Teixeira, Marina & Cardoso, Jussara & Figueiras, Danilo & Nunes, Felipe & Rajão, Raoni, 2024. "Bioeconomic markets based on the use of native species (NS) in Brazil," Ecological Economics, Elsevier, vol. 218(C).
    13. Rau, Anna-Lena & von Wehrden, Henrik & Abson, David J., 2018. "Temporal Dynamics of Ecosystem Services," Ecological Economics, Elsevier, vol. 151(C), pages 122-130.
    14. Lars Hein & Pete Roberts & Lucia Gonzalez, 2016. "Valuing a Statistical Life Year in Relation to Clean Air," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-24, December.
    15. Häyhä, Tiina & Franzese, Pier Paolo & Paletto, Alessandro & Fath, Brian D., 2015. "Assessing, valuing, and mapping ecosystem services in Alpine forests," Ecosystem Services, Elsevier, vol. 14(C), pages 12-23.
    16. Martinet, Vincent & Blanchard, Fabian, 2009. "Fishery externalities and biodiversity: Trade-offs between the viability of shrimp trawling and the conservation of Frigatebirds in French Guiana," Ecological Economics, Elsevier, vol. 68(12), pages 2960-2968, October.
    17. Venn, Tyron J. & Quiggin, John, 2007. "Accommodating indigenous cultural heritage values in resource assessment: Cape York Peninsula and the Murray-Darling Basin, Australia," Ecological Economics, Elsevier, vol. 61(2-3), pages 334-344, March.
    18. Egoh, Benis & Rouget, Mathieu & Reyers, Belinda & Knight, Andrew T. & Cowling, Richard M. & van Jaarsveld, Albert S. & Welz, Adam, 2007. "Integrating ecosystem services into conservation assessments: A review," Ecological Economics, Elsevier, vol. 63(4), pages 714-721, September.
    19. Strunz, Sebastian, 2012. "Is conceptual vagueness an asset? Arguments from philosophy of science applied to the concept of resilience," Ecological Economics, Elsevier, vol. 76(C), pages 112-118.
    20. Hein, Lars & van Koppen, Kris & de Groot, Rudolf S. & van Ierland, Ekko C., 2006. "Spatial scales, stakeholders and the valuation of ecosystem services," Ecological Economics, Elsevier, vol. 57(2), pages 209-228, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:89:y:2013:i:c:p:115-122. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.