Transcript The Economics of Invasive Species: Lessons from Hawaii

The Economics of Invasive Species:
Lessons from Hawaii
Kimberly M. Burnett
University of Hawaii at Manoa
Department of Economics
What is an “Invasive Species”?

An “invasive species” is defined as a species that is
1.
non-native (or alien) to the ecosystem under consideration and
2.
whose introduction causes or is likely to cause economic or
environmental harm or harm to human health.
Executive Order 13112, President Clinton, 1999

Invasive species can be plants, animals, and other organisms (e.g.,
microbes). Human actions are the primary means of invasive species
introductions.
Hawaii as a Laboratory

Most isolated place on earth

Potential to keep things out

Lots at risk: biodiversity, tourism, “paradise”

Threats to Hawaii:
Miconia landslide, Tahiti
Economic
(market value)
Ecological
(nonmarket value)
Water
Endangered species
Brown treesnake Power outages, medical
costs
Endangered species
Coqui frog
Endangered species,
influence on snake
Miconia tree
Property values
Biology + Economics = Bioeconomics

Biology (and ecology and hydrology): how fast does it grow, where is it
now, where is it going, how will it affect other species…

Economics: cost of control, value of expected damages

Show why all are necessary through case studies

Existing invader: Miconia

Potential invader: Brown treesnake

Explosive invader: Coqui frog
The Existing Invader: Miconia calvescens

Native to South America

Intentionally introduced to a Big Island
nursery in 1960’s

Attractive purple and green leaves

Aggressive growth

Long-lived seed bank

Shallow roots

Forms monotypic stands, dense canopy

“Purple plague,” “Green cancer”

Present on 4 main islands
Biology: How Fast Does it Grow?
Island
Carrying capacity (K)
g(n)
600000
500000
Kauai
15,849,057
Oahu
8,713,551
Maui
14,133,791
Hawaii
78,216,124
400000
300000
200000
100000
0
n
0
2000000
4000000
6000000
8000000
Where K = 100 trees per acre above
1800 mm/yr rainfall line
Ecology: Endangered Species
Hydrology: Potential Watershed
Change from Invasion

Reduction in groundwater speeds up depletion of aquifer, increases water prices and
need for desalination

Increase in sedimentation decreases water quality and viability of forest and
nearshore resources
Rainfall
Runoff (sediments)
(Aquifer)
Marine
ecosystem
Watershed
Economics: The Value of Losing
Birds & Water
mgd lost recharge
(annual)
Island
# birds
Low
High
Total annual damages by island
(millions)
Low
Medium
High
Kauai
22
3.2
3.9
$91.6
$154.0
$234.0
Oahu
13
3.2
3.9
$61.4
$98.5
$145.0
Maui
17
3.7
4.6
$77.8
$126.0
$187.0
20
18.0
22.0
$169.0
$225.0
$297.0
Big Island
Economics: Cost of Control?
Island
Search Constant
($1000*acre)
Search Coefficient (g)
Kauai
$158,490,570
1.6095
Oahu
$87,135,510
1.6258
Maui
$141,337,910
1.6089
Big Island
$782,161,240
1.6028
 $1,000*potential acres

C (n, x)  

13.39
* x
g
n


Treatment
Coefficient
$13.39
Current vs. Optimal Population
Island
n(0)
n*
Kauai
1,540
9,171
Oahu
6,890
5,495
Maui
111,050
8,901
Hawaii
315,000
39,937
Policy Comparisons
Island
Policy
Do nothing
Remain at
current population
forever
Status quo
spending
Optimal policy
of population reduction
and maintenance
Oahu
$3.08 b
$10.5 m
$16.9 m
$10.4 m
Maui
$4.6 b
$73.5 m
$51.7 m
$17.2 m
Miconia Recap

Population reduction optimal for most islands

Able to prevent millions of dollars in future losses by spending more today
on control

May be preferable to let population increase on Kauai (search costs high
relative to damage)

Difficulty with nonmarket valuation (true value of endangered birds, etc.).
The Potential Invader: Brown Treesnake

Native to New Guinea/Australia

Accidentally introduced to Guam during WW2

Heavy transport btw Guam and Hawaii (esp.
military)

8 intercepted at HI ports since 1980

Survived trip from Guam to Texas for months
in a washing machine

Hitchhikes in wheels of airplanes, hidden in
cargo

Mildly venomous

“Just a matter of time” (and money)
Biology: Growth
1,200,000
1,000,000
800,000
growth
600,000
400,000
200,000
0
0
1,000,000
2,000,000
3,000,000
4,000,000
population
5,000,000
6,000,000
7,000,000
8,000,000
Ecology: Biodiversity Losses
Economics: Damage

Damages:
Power outage costs:

272 outage hours/ 2.7 m snakes =
0.0001 outage hrs/snake/yr x $1.2 million = $121.11 /snake
+ Biodiversity:

280,000 Oahu households x $31 x 1 bird/ K = $1.16 /snake
+ Medical costs:

(170*$264.35)/ 2.7 m snakes x 4 pop density = $0.07 /snake
____________________________
= $122 per snake
Economics: Control Cost

Methods of removal






Our cost function



Hand capture
Trapping
Barriers
Acetaminophen baiting
Dogs in the woods
Informed by trials on Guam
Adjusted for differences in Hawaii’s environment
Marginal cost decreasing in n



Catching 1 out of 1: $92.5 million
Catching 1 out of 100: $335,000
Catching 1 out of max: $29.00
Arrival Function
Annual arrivals
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0
2
4
6
8
10
Prevention expenditure (millions)
12
2 cases depending
on current population

How many snakes currently present in Hawaii?

Officially zero

Conversations with scientists: could be as many as 100

Try 0 and 50 to see the range of optimal policies
Optimal Prevention and Control
Expenditures if zero snakes
Millions
of $
4
3.5
3
prevention
2.5
2
1.5
control
1
0.5
t
2
4
6
8
10
12
14
Optimal Prevention and Control
Expenditures if 50 snakes
Millions
of $
4
3.5
3
prevention
2.5
2
1.5
control
1
0.5
t
2
4
6
8
10
12
14
Summary of optimal policies
1st period
Optimal
population
Present value
n0=0
n0=50
n=2
n0=0
n0=50
Removal, x
0
48.184
0.184
-
-
Cost of x
0
75.6 million 1.60 million
65 million
154 million
2.94 million 3.19 million 3.19 million
158 million
195 million
y
Arrivals
0.216
0.184
0.184
-
-
Damage
$0
$243
$243
$11,000
$12,100
223 million
349 million
Total
2.94 million 78.8 million 4.79 million
Snake Recap

If zero snakes, focus on prevention over next ten years

If 50 snakes, funds should be directed immediately to control

May be large returns to early detection of small populations

Uncertainty about current population warrants diversification between
strategies
The Explosive Invader: Coqui Frog

Native to Puerto Rico

Introduced to Hawaii late 1980s
through nursery trade

Spread to 4 islands by movement
of plant material and intentional
introductions

No external tadpole stage; does not
require standing water; 2 week
breeding cycle

Have attained some of the highest
densities ever observed for
terrestrial amphibian populations
(up to 133,000 per ha on Hawaii)

New populations being reported
weekly
Coqui photos: USDA/APHIS/NWRC Hilo Field Station
“ko-KEE”
Full chorus
Falling Property Prices?
Hedonic Pricing Theory


Build model to explain what determines the total price of a property
Some things add to price, others subtract
 Structural



Neighborhood/Accessibility



Proximity to public transportation, school districts, other amenities (+/–)
Zoning (+/–)
Environmental



Number of rooms, number of bathrooms, square footage (+)
Acreage (+)
Presence of coqui (–???)
Elevation (+)
Financial

Mortgage rates (–)
Study Site and Data

50,033 real estate transactions
on Big Island, 1995-2005

Frog complaints registered to
NWRC Hilo, 1997-2001

Use GIS to identify
property transactions
occurring after complaint,
within 500m and 800m
of frog complaints
Results
Variable
Coefficient
Stand. error
P-value
Frog500m
-0.16
0.01
0.00
Frog800m
-0.12
0.01
0.00
Log Acres
0.43
0.02
0.00
Log mortgage rate
-0.45
0.04
0.00
Residential structure
1.27
0.01
0.00
Year of sale
0.07
0.00
0.00
Improved Residential
0.23
0.14
0.10
Apartment
0.31
0.17
0.07
Commercial
0.14
0.26
0.58
Industrial
1.98
0.17
0.00
Conservation
-0.19
0.20
0.34
Resort
0.32
0.19
0.09
Unimproved Residential
0.53
0.33
0.11
Hawaii County

Consider for a moment…0.16% may sound small, but Hawaii’s real
estate is valuable!

Median value of single family home: $411,500

34,175 owner-occupied housing units

0.16%* $411,500 = $658.40 per property* 34,175 homes =
$22.5 million
Potential impacts to neighbor islands

Keep in mind…real estate values on Maui and
Oahu are considerably higher than the Big Island

Maui County


0.16%*$703,500 = $1,125 per property*25,039 =
$28.2 million
Honolulu County

0.16%*$632,200 = $1,012 per property*156,290 =
$158.1 million
Frog Recap

The presence of the coqui frog in Hawaii county has already begun to
lower property values

An official complaint of the frog within 500m reduces property values on
average 0.16%

If the frog spreads across all residential properties, direct damages to
property values are estimated at a minimum of $22.5 million for Hawaii
county, as much as $208 million for the state
Limitations

General


Miconia



How to deal with seed bank (is zero really zero?)
Lack of spatial considerations
Brown treesnake






Nonmarket values controversial/hard to measure
“Not here”, so…
Uncertain about population
Uncertain about annual arrivals
Unknown control costs
Lack of spatial considerations
Coqui

Ecological threats not accounted for
Directions of Future Research

Miconia



Brown treesnake




Better data on: current number of trees on each island, growth, costs
Spatial model
Early detection/rapid response
Probabilistic model
Spatial model
Coqui


Real estate analysis: increase years of BI data, add Maui data
Calculate lost profits to horticultural industry from
 Reduced revenues from lost sales if infested
 Increased costs from removing frogs for certification
Conclusions

Invasive species can cause real economic damage

Eradication not necessarily preferred over population maintenance or
adaptation

An ounce of prevention not necessarily “worth a pound of cure”

Optimal policy will depend on economic as well as ecological
characteristics of an invasion