Spatial aggregation and the value of natural capital

Addicott, Ethan T.; Fenichel, Eli P.

doi:10.1016/j.jeem.2019.03.001

Cited by 14 publications

(9 citation statements)

References 30 publications

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“…However, this does not allow us to consider the second‐order influences of movement between herds or potential long‐distance immigration from outside Alberta. It also does not allow us to account for localized management, which in some cases can be important (Addicott and Fenichel 2019).…”

Section: Methodsmentioning

confidence: 99%

The economics of conservation debt: a natural capital approach to revealed valuation of ecological dynamics

Maher

Fenichel

Schmitz

et al. 2020

Ecological Applications

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Some species are valued for their direct usefulness to society, through immediate financial returns from market activities such as harvesting or ecotourism. But many are valued for their passive usefulness, i.e., their mere existence contributes to supporting, regulating or cultural environmental services that support human well‐being. Hence, there is inherent social value to conserving such species as natural assets. However, such species are seldom priced as natural assets, and thus not accounted for in sustainability wealth measures because deriving non‐market prices is challenging. We overcome this limitation by presenting a new approach for natural asset pricing of species with passive value that can be incorporated into national sustainability wealth accounting. We explicitly consider the relationship between prevailing institutions, species interactions, and ecosystem dynamics. Our approach is illustrated with the case of threatened woodland caribou in the Alberta Oil Sands. We show that conservation can be considered an investment while destructive activities can lead to a loss or conservation debt; and forgoing destructive activities can be considered a capital gain, increasing future wealth. Our approach reveals that caribou conservation in Alberta is leading to a conservation debt on the order of CA$800 million.

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Section: Methodsmentioning

confidence: 99%

The economics of conservation debt: a natural capital approach to revealed valuation of ecological dynamics

Maher

Fenichel

Schmitz

et al. 2020

Ecological Applications

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“…Even with defined geographic boundaries and clear concepts of ownership and inclusion, nullor double-counting of assets can occur, meaning that the sum of country-level national accounts does not reliably characterize the regional, let alone global, ocean economy. Further, where institu-tional boundaries dissect physical boundaries, the value of ocean natural resources may hinge on the choice of the economic boundary 41 . These issues raise questions about how accounts should record activities beyond national boundaries as well as how far inland the boundary of the ocean economy should extend.…”

Section: Determining What Is In Scopementioning

confidence: 99%

Modifying national accounts for sustainable ocean development

et al. 2020

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“…In the presence of spatial heterogeneity,Addicott and Fenichel (2019) demonstrate that shadow price functions hinge on the order of spatial aggregation and valuation even within a specific natural capital.…”

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confidence: 92%

Genuine Savings and Sustainability with Resource Diffusion

Yamaguchi

2021

Environ Resource Econ

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We consider a spatial extension of genuine savings and wealth as a capital-based indicator of sustainability. In both inefficient and efficient economies, where well-being is locally or globally maximized, respectively, the well-known Hotelling rule and Hartwick (Dixit–Hammond–Hoel) investment rules and results are extended, depending on the extent of the spatial diffusion of natural capital. It is shown that the net present value of any future change in neighboring resource stocks affects the current change in intergenerational well-being. Numerical examples show the relevance of such parameters as the diffusion rate, discount rate, and marginal utility of consumption. Moreover, they suggest the exact adjustments to be made in aggregating or disaggregating the sustainability of different spatial units, which is not addressed in the current practice of green or wealth accounting.

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Spatial aggregation and the value of natural capital

Cited by 14 publications

References 30 publications

The economics of conservation debt: a natural capital approach to revealed valuation of ecological dynamics

The economics of conservation debt: a natural capital approach to revealed valuation of ecological dynamics

Modifying national accounts for sustainable ocean development

Genuine Savings and Sustainability with Resource Diffusion

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