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Pricing the ecosystem and taxing ecosystem services: A general equilibrium approach

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  • Eichner, Thomas
  • Pethig, Rüdiger

Abstract

In an integrated dynamic general equilibrium model of the economy and the ecosystem humans and other species compete for land and prey biomass. Each submodel exhibits a price-driven competitive allocation mechanism, and the endogenously determined habitat is either openly accessible or privately owned. In both scenarios specific corrective taxes or subsidies are needed to internalize ecosystem externalities. An open access habitat causes additional inefficiencies through diverging prices for biomass and land in both subsystems. Values of all ecosystem components are determined in an efficient steady state clarifying the role and the interplay of ecosystem prices and economic prices.

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  • Eichner, Thomas & Pethig, Rüdiger, 2009. "Pricing the ecosystem and taxing ecosystem services: A general equilibrium approach," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1589-1616, July.
    • Handle: RePEc:eee:jetheo:v:144:y:2009:i:4:p:1589-1616
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    Cited by:

    1. Rafat Alam & Nguyen Quyen, 2018. "The conversion of biodiversity-rich land and ecosystem services," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(1), pages 157-178, January.
    2. Yoshida, Jun & Kono, Tatsuhito, 2020. "Land use policies considering a natural ecosystem," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    3. Negar Akbari & Pierre Failler & Haoran Pan & Benjamin Drakeford & Andy Forse, 2023. "The Impact of Fisheries on the Economy: A Systematic Review on the Application of General Equilibrium and Input–Output Methods," Sustainability, MDPI, vol. 15(7), pages 1-17, March.
    4. Haoran Pan & Pierre Failler & Qianyi Du & Christos Floros & Loretta Malvarosa & Emmanuel Chassot & Vincenzo Placenti, 2022. "An Inter-Temporal Computable General Equilibrium Model for Fisheries," Sustainability, MDPI, vol. 14(11), pages 1-23, May.
    5. Thomas Eichner & Rüdiger Pethig, 2007. "Harvesting in an integrated general equilibrium model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 233-252, May.
    6. Hussain, A.M. Tanvir & Tschirhart, John, 2013. "Economic/ecological tradeoffs among ecosystem services and biodiversity conservation," Ecological Economics, Elsevier, vol. 93(C), pages 116-127.
    7. Finnoff, David & Gong, Min & Tschirhart, John, 2012. "Perspectives on Ecosystem Based Management for Delivering Ecosystem Services with an Example from an Eighteen-Species Marine Model," International Review of Environmental and Resource Economics, now publishers, vol. 6(1), pages 79-118, January.
    8. Amegashie, J. Atsu & Ouattara, Bazoumanna & Strobl, Eric, 2007. "Moral Hazard and the Composition of Transfers: Theory with an Application to Foreign Aid," MPRA Paper 3158, University Library of Munich, Germany, revised 06 May 2007.
    9. John Tschirhart, 2012. "Biology as a Source of Non-convexities in Ecological Production Functions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(2), pages 189-213, February.
    10. Yoshida, Jun & Imoto, Tomoko & Kono, Tatsuhito, 2022. "Agricultural and urban land use policies to manage human–wildlife conflicts," MPRA Paper 115375, University Library of Munich, Germany.
    11. Yoshida, Jun & Kono, Tatsuhito, 2022. "Cities and biodiversity: Spatial efficiency of land use," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 685-705.

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    More about this item

    Keywords

    Land Biomass Ecosystem services;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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