Category Archives: Economics

Six things we learned about valuing natureOctober 15 Frontiers in the Environment - Wetlands

Should we put a price tag on nature? IonE resident fellow Steve Polasky, Regent’s Professor of Applied Economics, Ecology, Evolution, & Behavior, and Fesler-Lampert Chair in Ecological/Environmental Economics at the University of Minnesota, explored that Big Question at this week’s Frontiers in the Environment event. Following the talk, attendees participated in a lively Q&A session. Here are six things we learned:

  1. Vocabulary matters. There is a difference between valuing nature and putting a price tag on nature. Should ecosystem services be moved into the market? It may be too soon to tell. Should we accurately value nature? Absolutely.
  2. There has been a shift from old conservation to new conservation. Nature used to be appreciated based on its intrinsic value, but now it is often looked at with regard to the interaction it has with people. The current debate about ecosystems services tends to follow this same tension. Conservationist may agree about general goals, but they disagree about the emphasis and tactics.
  3. What’s good for nature is good for us. If we don’t factor in the full cost — including ecosystem impacts — when deciding whether to pursue a specific course of action, Polasky said, “we’re robbing nature, but we’re also robbing people.”
  4. There are valid arguments on each side. Some studies have shown that people are more likely to protect something when it is seen as a commodity, and that including ecosystem services in market calculations help to show how much we truly value them. However, others argue that there are moral limits to markets and that putting things into market terms removes them from the personal realm, thus changing the way we think about them. The way we use the environment to advance human benefit may not be in line with what is best for the environment.
  5. There are a lot of unknowns. Is there a way to objectively value nature, or does it all depend on the frames we use? Is it a balanced system? Will this be useful in the long term? These questions and more represent real discussions within this debate.
  6. It’s beyond economics. Economic valuation is only part of the story. Politics, individual decisions, and actions by firms and institutions all play a role in the debate over the value of ecosystem services. Just because something has economic value does not mean it makes sense politically or socially.

Like to learn more? Watch a video of the presentation.

 

Study: Groundwater contamination in SE MinnesotaFarm field in Minnesota

Conversion of grasslands to agricultural fields across Southeastern Minnesota is increasing groundwater nitrate contamination in private drinking water wells according to a new study by researchers with the University of Minnesota and the Natural Capital Project.

Writing in the journal Environmental Research Letters, the researchers outline the economic costs associated with groundwater pollution along with threats to overall water quality and ecosystem services.

“Households can dig a new well, purchase bottled water, or install a home nitrate-removal system, but dealing with a contaminated well is expensive and these costs are typically born entirely by private households,” said Bonnie Keeler, lead author and lead scientist with the Natural Capital Project at the University of Minnesota’s Institute on the Environment. “We found evidence that recent trends in grassland loss to agriculture between 2007 and 2012 are likely to increase the future number of contaminated wells by 45%, leading to millions of dollars in lost income and remediation costs for private households.”

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Go Minnesota NatCap!Natural Capital

Policy makers, land managers, and other stakeholders confront a dizzying array of environmental decisions. How do we best manage our natural resources? Where should we invest in conservation? Do we need stricter regulation of development or industry?

The Natural Capital Project, a core program of the Institute on the Environment, develops innovative tools and approaches to inform these important questions. Starting this year, the Minnesota team will add three full-time research positions — a lead scientist, an ecologist and an economist. The growing NatCap presence at IonE will enhance the program’s ability to meet increasing demand for data and tools that quantify the values of natural capital. Continue reading

Unfair air?Air Pollution

People of color in the U.S. are exposed to 38 percent more nitrogen dioxide air pollution in the neighborhoods in which they live than are white people, according to new research from the University of Minnesota. The exposure they receive results in approximately 7,000 heart-related deaths per year.

U of M Instititute on the Environment resident fellows Julian Marshall and Dylan Millet and fellow researcher Lara Clark compared U.S. Census data and nitrogen dioxide levels in cities across the country and found that, irrespective of income, nonwhites had higher average exposure to nitrogen dioxide than whites. The findings received extensive coverage in the media this past week. Continue reading

Frontiers: Yellowstone: More valuable than goldYellowstone

Mining near sensitive ecosystems is one of the hottest natural resource debates, pitting economic and environmental values against each other. As the controversy surrounding mining in Minnesota continues, opponents may want to take a few notes from one of the nation’s largest, successful anti-mining campaigns to date.

Portrait: Mike ClarkMike Clark, former executive director of the Greater Yellowstone Coalition, shared his experience fighting the New World mining project outside the nation’s largest national park in the 1980s and 1990s in his Frontiers in the Environment lecture Wednesday, April 9 on the University of Minnesota’s St. Paul campus.

In “Yellowstone: More Valuable Than Gold,” Clark discussed what makes the park and surrounding landscape so valuable and why that usually leads to conflict.

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Frontiers: What IS the green economy?Green Economy - Stephen Polasky.

When you think of the economy, chances are the “green” that comes to mind is money, not nature. But what if there wwere truly a green economy – one that accounts for the value of the environment in economic decision-making?

That was the topic of last week’s Frontiers in the Environment lecture presented by Steve Polasky, an IonE resident fellow and Regents professor of applied economics. Polasky delivered his speech, “What IS the Green Economy? And How Do We Get One?” Feb. 12 at the University of Minnesota in St. Paul. While economics and the environment do not always seem to go hand in hand, it was his love for nature that pushed Polasky to pursue economics.

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New tool aims to clean up supply chainSponge Life Cycle

There you are, hunkered over your sink, hands wrist-deep in hot water, swiping suds over food-crusted dinner plates. That squishy, soapy thing that’s helping you do so many daily chores…ever wonder where its life began and where it will end?

That sponge, like everything on the planet, has a life cycle, composed of all the materials and energy that brought it to your sink and all the tasks it will help you complete until you’ve squeezed the last bit of work from it and tossed it into the trash. Continue reading

Frontiers: Divestment – or sustainable investment?Divestment

Universities, religious institutions, and even local governments around the globe are weighing the pros and cons of divestment – a climate change mitigation strategy that focuses on phasing out endowment investments in fossil fuel companies.

Portrait: Matthew FitzmauriceMatthew Fitzmaurice, founder and managing partner of AWJ Capital Partners LLC, explained the opportunities and shortcomings of divestment in his Frontiers in the Environment presentation Nov. 6.

In “Divestment: A Call to Arms vs. Sustainable Investing: A Catalyst for Global Change,” Fitzmaurice argued that divestment, while a laudable goal, may not be realistic for institutions.

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Ecosystem services for river basin managementRhone river dam

Do you know about the Water Framework Directive? It calls for all waters in the European Union to be managed as river basins and for those river basins to be brought up to “good status.” That’s tremendous – a really forward-looking way to think about managing water. But as you can surely imagine, it’s also quite a task to implement!

I was lucky enough to work with the RISKBASE group during 2009-2010 to help develop risk-based approaches for managers to guide river basins to good status. I’m not an expert in risk, nor an expert about European river basins, but I was really excited to get involved. This had the potential to bring biophysical science together with new management approaches to actually solve problems. Continue reading