1. Economics of Conservation

2. Adam Smith Theorized that economic systems were based on each individual acting with enlightened self- interest – everyone involved in an economic exchange seeks to improve their position Smith assumed that all costs and benefits of free exchange were accepted and borne by the participants in an economic exchange

3. External Cost External Cost, a cost to society not paid by the manufacturer or its customers

4. Market Failure Where externalities exist, we have a market failure – society fails to realize the full benefits of economic activity. Some individuals or businesses benefit at the expense of larger society – as a result, society as a whole becomes less prosperous rather than more prosperous

5. Tragedy of the Commons Cows on Selsley Common, UK

6. Market Failure – Regulations Enforced?

7. Discounting Often economists will discount the value of a good to be used in the future, thus giving it a lower current value. This comes about from the idea that it is better to harvest the benefits of economic activity today and invest the profits than to wait and use that resource later

8. External Costs

9. External Costs?

10. Internalization of pollution costs in US 1970 – Clean Air Act (and later amendments) 1972 – Clean Water Act (and later amendments) 1976 – Resource Conservation and Recovery Act 1977 – Surface Mine Control and Reclamation Act

11. Cost Benefit Analysis marginal cost of pollution - added cost to all present and future members of society of an additional unit of pollution marginal cost of pollution abatement - added cost to all present and future members of society of reducing a given type of pollution by one unit

12. Richmond, California

13. Risk Acceptability Risk acceptability is measured as the cost a society will bear or accept - Ideally the benefits of controlling a pollutant should be equal to the costs of control

14. Wetlands and Flood Control

15. Hurricane Sandy – NYC Subway, Oct. 29, 2012

16. Wetland and Oyster Bed Restoration - NYC

18. Resources nonrenewable resources - resources for which the supplies are finite and exhaustible renewable resources - resources which renew themselves and which will last indefinitely if they are used wisely

19. Value of Renewable Living Resources Plants and animals (and algae and fungi) harvested from the earth’s farmlands, rangelands, forests and waters and sold at market account for a sizable portion of the world’s total economic activity - In the US, they represent about 15-20% of our total economy, about $2.25 to 3 trillion per year

20. Harvest of Living Renewable Resources

21. Value of Wild Species the harvest of wild species accounts for about 4.5% of the US gross domestic product – about $675 billion per year today

22. Wild Pollinator Species

23. Wild Forage Species

24. Subsistence Living Bolivia

25. Wild Pig - Sarawak

26. Village in Amazonia

27. Complex Agriculture in Amazonia

28. Goods and Services Goods usually refer to something that can be consumed by humans – thus goods have consumptive uses Services refer to things provided to us exclusive of consumption – thus services have nonconsumptive uses

29. Oak Tree Services

30. Lawn Chairs, Hyde Park, London

31. Trees – Storm Damage

32. Marsh Value

33. Conservation Easement

34. Riparian Conservation Easement

35. Lion – Amboseli National Park

36. Wolf – Yellowstone National Park

37. Contingent Valuation One way of determining the value of species is to use a method called contingent valuation - this is a survey-research method in which people are asked direct questions that attempt to determine the values of people with regard to a particular issue

38. Contingent Valuation – Bald Eagle in Maine

39. Potential Values

40. Potential Values - Dogbanes

41. Potential Values – Teosinte and Corn

42. Potential Values - Forest Siberia

43. Existence Value - Sperm Whale

44. Existence Value -Bristlecone Pine

45. Costs of Conservation Explicit costs - this is the price we pay to restore or maintain a species or ecosystem Implicit costs are costs that arise because of a lost economic opportunity; the loss of an opportunity to use a resource to make money

46. Explicit Costs – California Condor ~ $1 million per year

47. Explicit Costs – Restoration of the Everglades - $465-700 million over 20 years

48. Implicit Costs - Douglas-fir

49. Douglas-fir Logs Value – up to $20,000 per hectare

50. Northern Spotted Owl Require ~ 1000 hectares old growth forest

51. Douglas-fir Distribution