4)Impacts b)Economic Pimentel, Zuniga and Morrison Update on the environmental and economic costs associated with alien-invasive species in the United States ECOLOGICAL ECONOMICS 52 (3): (just read plant-related sections)

4)Impacts b)Economic Pimentel, Zuniga and Morrison Update on the environmental and economic costs associated with alien-invasive species in the United States ECOLOGICAL ECONOMICS 52 (3): introduced crops and animals provide 98% US food, $800 billion value per year Some species have harmed agriculture, forestry, other economic segments, and environment. Estimated 25,000 non-indigenous plants in US; 5000 have escaped to natural systems What are the causes of economic loss due to invasives?

4)Impacts b)Economic How many aliens?

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States

4)Impacts b)Economic i) Total damage estimates: annual. From Pimentel et al. (2000) United States Economic impacts from losses/damage

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts from losses/damage and from costs to control

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts from losses/damage and from costs to control. Sum to get total.

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts Focus only on plants

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts Focus only on plants For example: Aquatic weeds Mark W. USDA-NRCS PLANTS Database

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts Focus only on plants For example: Crop weeds Patrick J. USDA-NRCS PLANTS Database

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts Focus only on plants For example: Lawns, gardens, golf courses Patrick J. USDA-NRCS PLANTS Database

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2000) United States Economic impacts Focus only on plants: Total ~$34 billion annually

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20 United States Global Losses/damage only from plants: $34 billion for US

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20 United States Global Losses/damage only from plants: $34 billion for US, but India is even more

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20 United States Global Losses/damage only from plants: $34 billion for US, but India is even more, and Brazil not far behind

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20 United States Global Losses/damage only from plants: Total ~$95 billion (42% of total losses from all organisms)

4)Impacts b)Economic i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20 United States Global Losses/damage only from plants: Total ~$95 billion (42% of total losses from all organisms) But only a small fraction of other environmental losses or control costs and environmental costs hard to estimate

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness analyses aka: Ex post (after the fact) analysis Assesses damage from invasives vs. cost of various methods to control them

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses Damage from invasives vs. cost to control them Focus generally is on minimizing the cost of controlling to a certain level of damage – in other words, what is the least cost method to control an invasion that has already occurred

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses Damage from invasives vs. cost to control them Minimize control cost to a certain level of damage – least cost method to control Doesn’t quantify economic benefits of control. Assumes that the benefits will exceed the least cost method to control

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses Minimize control cost to a certain level of damage – least cost method to control Assumes: benefits > least cost method to control (2) Ex ante (before the fact) analyses

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses Minimize control cost to a certain level of damage – least cost method to control Assumes: benefits > least cost method to control (2) Ex ante analyses Cost – benefit analysis: what are costs to prevent invasion vs. costs if invasion occurs. Maximizes the cost-benefit ratio.

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses Minimize control cost to a certain level of damage – least cost method to control Assumes: benefits > least cost method to control (2) Ex ante analyses Cost – benefit analysis 2-step process: (a)Understand how invasion affects different species, ecosystem services, and economic activities

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses Minimize control cost to a certain level of damage – least cost method to control Assumes: benefits > least cost method to control (2) Ex ante analyses Cost – benefit analysis 2-step process: (a)Understand how invasion affects different species, ecosystem services, and economic activities (b)Assess the monetary value of all these: “valuation”

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values Consumptive = monetary worth of specific, market-based goods & services

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values Consumptive = monetary worth of specific, market-based goods & services Often easy to analyze

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values Consumptive = monetary worth of specific, market-based goods & services Often easy to analyze But need to include both private (financial) and social (economic) prices

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values Consumptive = monetary worth of specific, market-based goods & services Often easy to analyze But need to include both private (financial) and social (economic) prices Non-consumptive = monetary worth of non-market goods & services (for example, tourism, recreational activities, etc.)

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values Consumptive = monetary worth of specific, market-based goods & services Often easy to analyze But need to include both private (financial) and social (economic) prices Non-consumptive = monetary worth of non-market goods & services (for example, tourism, recreational activities, etc.) More difficult to analyze; usually entail indirect approaches such as “travel cost” or “survey” methods

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Value of ecosystem services

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Value of ecosystem services Even more difficult to assess “Replacement” costs: cost to replace the services provided by the intact ecosystem.

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Value of ecosystem services Even more difficult to assess “Replacement” costs: cost to replace the services provided by the intact ecosystem. e.g. cost of water treatment if wetlands lost

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Value of ecosystem services Even more difficult to assess “Replacement” costs OR “Opportunity” costs

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Value of ecosystem services Even more difficult to assess “Replacement” costs OR “Opportunity” costs: cost of lost opportunities or resources.

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Value of ecosystem services Even more difficult to assess “Replacement” costs OR “Opportunity” costs: cost of lost opportunities or resources. e.g million gallons of water lost to Tamarisk transpiration in southern CA

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values “Existence” value : how to assess?

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values “Existence” value : how to assess? ‘Willingness to pay’ e.g. how much would you pay in tax to preserve wilderness areas even if you didn’t visit them for recreation? “preservation” value: how much might it benefit you in future?

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the future

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the future Typically set at the after-tax interest rate

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the future Typically set at the after-tax interest rate For industrialized countries, typically 1-4% (2-3% commonly used in US)

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the future Typically set at the after-tax interest rate For industrialized countries, typically 1-4% (2-3% commonly used in US) For developing countries with rapid economic growth and high rates of returns on investments, can be up to 10%

4)Impacts b)Economic ii) Methodology (1) Cost effectiveness (ex post) analyses – least cost method to control (2) Ex ante analyses – Cost-benefit analysis 3 major components of valuation Direct-use values: Consumptive & Non-consumptive Indirect-use values Non-use values

4)Impacts b)Economic Case study: Tamarix (saltcedar): Zavaleta 2002 Relatively complete and detailed economic analysis Incorporates direct-use & indirect-use (but not non-use) values

4)Impacts b)Economic Case study: Tamarix Introduced in mid-late 1800’s Originally encouraged and subsidized by governments for windbreaks, erosion control & stream bank stabilization, ornamentals Now widespread & dominant invader on much of the riparian areas of western US

4)Impacts b)Economic Case study: Tamarix Introduced in mid-late 1800’s Originally encouraged and subsidized by governments for windbreaks, erosion control & stream bank stabilization, ornamentals Now widespread & dominant invader on much of the riparian areas of western US Because of widespread distribution and dominance, likely to very expensive to eradicate

4)Impacts b)Economic Case study: Tamarix Introduced in mid-late 1800’s Originally encouraged and subsidized by governments for windbreaks, erosion control & stream bank stabilization, ornamentals Now widespread & dominant invader on much of the riparian areas of western US Because of widespread distribution and dominance, likely to very expensive to eradicate Will the economic benefits justify the costs?

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Economic analyses done by: Zavaleta (2000) Ambio 29: Zavaleta (2000) in Mooney & Hobbs

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Economic analyses done by: Zavaleta (2000) Ambio 29: Zavaleta (2000) in Mooney & Hobbs Assumptions: Discount rate = 0% (overestimates the benefits)

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Economic analyses done by: Zavaleta (2000) Ambio 29: Zavaleta (2000) in Mooney & Hobbs Assumptions: Discount rate = 0% (overestimates the benefits) Costs are computed over a 20-year period to: (1)Evaluate sites (2)Eradicate Tamarix (3)Revegetate and monitor effectiveness

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Economic analyses done by: Zavaleta (2000) Ambio 29: Zavaleta (2000) in Mooney & Hobbs Assumptions: Discount rate = 0% (overestimates the benefits) Costs are computed over a 20-year period to: (1)Evaluate sites (2)Eradicate Tamarix (3)Revegetate and monitor effectiveness Benefits of removing Tamarix and restoring natives are computed over a 55-year period

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #1 – aerial extent of Tamarix

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #1 – aerial extent of Tamarix. 2 estimates of acreage infested: Conservative estimate: Based on surveys and observed minimal rates of spread – 1.16 million acres

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #1 – aerial extent of Tamarix. 2 estimates of acreage infested: Conservative estimate: Based on surveys and observed minimal rates of spread – 1.16 million acres Bold estimate: Based on very detailed information for the Lower Colorado River, extrapolated throughout the known distribution – 1.61 million acres

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #2 – Because Tamarix invades riparian areas, key to economic damage in arid West is water

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #2 – Because Tamarix invades riparian areas, key to economic damage in arid West is water Estimated water loss from Tamarix vs. natives

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #2 – Because Tamarix invades riparian areas, key to economic damage in arid West is water Estimated water loss from Tamarix vs. natives All studies say Tamarix > natives, but the amount greater varies

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #2 – Because Tamarix invades riparian areas, key to economic damage in arid West is water Estimated water loss from Tamarix vs. natives All studies say Tamarix > natives, but the amount greater varies 2 estimates: (1) Mean of all studies: Tamarix uses 1.5 a.f. per year more than native vegetation – Bold estimate

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #2 – Because Tamarix invades riparian areas, key to economic damage in arid West is water Estimated water loss from Tamarix vs. natives All studies say Tamarix > natives, but the amount greater varies 2 estimates: (1) Bold estimate: Tamarix uses 1.5 a.f. per year more (2) Conservative estimate: 1.0 a.f. per year

4)Impacts b)Economic Case study: Tamarix – Will economic benefits justify costs? Step #2 – Because Tamarix invades riparian areas, key to economic damage in arid West is water Estimated water loss from Tamarix vs. natives All studies say Tamarix > natives, but the amount greater varies 2 estimates: (1) Bold estimate: Tamarix uses 1.5 a.f. per year more (2) Conservative estimate: 1.0 a.f. per year Then simple math to estimate annual greater water loss due to Tamarix