Transcript English - IUCN Invasive Species Specialist Group

Economic Analysis
of Invasive Species
Module 2:
understanding the economic
causes of invasions
what this module covers
1. identifying the
economic factors that
lead to invasions
2. using policy analysis
matrices to trace the
economic causes of
invasions
3. linking invasions to
changes in human
wellbeing
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about
invasive species
Module 1
understanding the economic
Module 2
causes of invasions
impacts of invasive species
and ways to address them
Module 3
defining invasive-related
costs & benefits
Module 4
valuing
ecosystem impacts
Module 5
informing actions
to address invasives
Module 6
Economic Analysis of Invasive Species
how economic conditions and
forces prompt invasions
• most of the processes which
result in invasions are
economically motivated,
for example:
– use of exotic species for
production, consumption and
trade
– conversion and fragmentation
of habitat
– liberalisation and deregulation
of markets
– expansion in the trade of goods
and services
– increasing mobility of people
and things
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Economic Analysis of Invasive Species
direct & indirect economic causes
direct
economic
causes
indirect
economic
causes
each has different drivers and manifestations,
involves different processes,
originates from the action (or inaction) of different groups,
and requires different responses
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Economic Analysis of Invasive Species
direct & indirect economic causes
• direct economic causes:
– production and consumption
activities which themselves
introduce, establish and
spread potentially invasive
species
• indirect economic causes
– underlying economic,
livelihood, market, price,
policy and institutional
conditions that permit or
encourage people to behave
in particular ways
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Economic Analysis of Invasive Species
direct & indirect economic causes
introduction
direct economic causes
indirect economic causes
introduction of species for
commercial purposes
forces and conditions which
determine trade, production and
consumption practices and
preferences
e.g. aquaculture, seeds, crops,
livestock, food, biofuels
establishment
introduction of species for
control purposes
e.g. biocontrol, landscape restoration
spread
naturalisation
introduction of species for
lifestyle and aesthetic
purposes
e.g. pets, ornamental plants, aquariums
unintentional or accidental
introductions
invasion
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e.g. contaminated imports, hitch-hikers
in freight or luggage, ballast water,
dumping
e.g. expanding travel & trade, globalisation,
subsidies to production, trade and
investment incentives, market demand and
consumer preferences, low fines, high
reliance of economy on imports
forces and conditions which
determine land and resource
use practices and preferences
e.g. high reliance of economy on particular
productions sectors, incentives to clear land
and replace native species, price support to
exotic monocrops, unclear institutions and
property rights, lack of budgets and funding
to conservation
Economic Analysis of Invasive Species
invasives as externalities
externality
the positive or negative consequence of an
economic activity that is experienced by
unrelated third parties, that is not reflected
in the price of the goods or services being
produced and for which no compensation
is paid or received
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Economic Analysis of Invasive Species
invasives as externalities
introduction of water hyacinth into garden ponds
imposes external cost
INSTIGATOR OF ACTION
aesthetic benefits,
improvement in
land values
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HOST ECOSYSTEM
OTHER RESIDENTS
choking of wetland,
leading to loss of
ecosystem
services
decreased fish catch,
increased floods,
declining water quality,
difficulties in access
Economic Analysis of Invasive Species
policy, market & price failures
policy
failure
market
failure
economic policies and
instruments encourage
behaviour which lead to
the spread of invasives,
thereby incurring social
and economic costs
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price
failure
markets and prices fail to allocate
resources to their most efficient use:
market transactions, and the prices
they are based on, do not
incorporate the broader social and
economic costs of invasives
Economic Analysis of Invasive Species
economic policy and market
failures result in invasions
• lead to a situation where:
– the prices and profits that
people face as they carry out
their economic activities do not
internalise the full costs of
invasions to the wider economy
(or the risk of invasions
occurring)
– there are for the most part no
economic incentives (or
requirements) for individuals or
companies to make decisions
based on the likelihood of
invasions occurring, or of these
costs being incurred to them
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Economic Analysis of Invasive Species
direct & indirect economic causes
private
costs and
benefits
do not
equate to
encourage producers,
consumers and traders to
behave in particular ways
that are profitable or
beneficial to them
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social
costs and
benefits
but which incur costs and
losses to other groups,
individuals and the
economy
Economic Analysis of Invasive Species
invasives as externalities
externality
the positive or negative consequence of an economic activity
that is experienced by unrelated third parties, that is not reflected
in the price of the goods or services being produced and for
which no compensation is paid or received
• invasions are usually the external effects of market
transactions
• market prices do not reflect full social and economic
costs associated with invasions
• costs and losses are felt by wider economy, not by the
person who causes the invasion
• no penalty/compensation is levied for damages caused
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Economic Analysis of Invasive Species
invasives as externalities
externality
the positive or negative consequence of an economic activity
that is experienced by unrelated third parties, that is not reflected
in the price of the goods or services being produced and for
which no compensation is paid or received
• in many ways invasives show the characteristics of “typical”
economic externalities, and should be treated as such in analysis
and measures
• key difference:
– “normal” externalities only continue as long as source activity does
– invasions, once set in motion, are self-perpetuating and often their
impacts increase over time
• means that many of the financial and economic instruments
usually designed to address environmental externalities are less
suited to invasives
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Economic Analysis of Invasive Species
using policy analysis matrices to
identify environmental effects
• thorough analysis of the direct and indirect causes of
invasions is a key step in economic analysis
• policy analysis matrices provide a useful tool for this
• Action Impact Matrix: originally developed to show
relationships between economy-wide policies and the
environment
• can be simplified and adapted for invasives
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Economic Analysis of Invasive Species
applying policy analysis matrices
to invasives
Step 1
list key issues relating to invasives and identify direct causes
Key issues
Direct causes
Issues relating to the introduction, establishment and spread of potential invasives
Introduction and spread of potentially invasive
species
Cultivation of exotic crops
Spread of potentially invasive species
Road and boat transport of exotic species between sites
Hitch-hiker species coming in with seed and food shipments
Issues relating to the resilience of human and natural systems to invasions
Loss of biodiversity and ecosystem services
Invasion of species
Intensive monocropping
High use of agro-chemicals
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Economic Analysis of Invasive Species
applying policy analysis matrices
to invasives
Step 2
describe underlying economic conditions or motivations
Direct causes
Underlying economic conditions
Issues relating to the introduction, establishment and spread of potential invasives
• High consumer demand
Cultivation of exotic crops
• High producer profitability
Hitch-hiker species coming in with shipments
Road and boat transport of exotic species
• Promotion of cash crop cultivation
• Reliance on imported inputs
Issues relating to the resilience of human and natural systems to invasions
Loss of biodiversity and ecosystem services
• Clearance of natural vegetation for monocrop farming
Intensive monocropping
High use of agro-chemicals
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Economic Analysis of Invasive Species
applying policy analysis matrices
to invasives
Step 3
identify economic policies and instruments which set
particular economic conditions and motivations
Underlying economic conditions
Economic policies or instruments
Issues relating to the introduction, establishment and spread of potential invasives
High consumer demand
High producer profitability
Promotion of cash crop cultivation
Reliance on imported inputs
• Subsidies to retail price of crop for consumers
• Price support to cash crop farmers
• Subsidies and preferential credit for cash crop production
• Export tax exemption for cash crops
• High input and export taxes for alternative native crops
• Import duty exemption for agricultural sector inputs
• Over-valued exchange rate making imports relatively cheaper
Issues relating to the resilience of human and natural systems to invasions
Clearance of natural vegetation for monocrops
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• Lack of clear property rights over natural ecosystems
• Requirement that farm land is cleared to establish ownership
• Relatively lower taxes on agricultural land than forest
• Low budget allocations to conservation agencies
Economic Analysis of Invasive Species
linking invasions to changes in
human wellbeing
• ultimately, invasives are of
concern because they
impact on human wellbeing
• invasives take over space
that generates
economically valuable
goods and services
• we are concerned with
levels and degrees of
invasion: incremental costs
and benefits to humans
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Economic Analysis of Invasive Species
invasions
impact on the
provision of
which results in
changes in
ECOSYSTEM SERVICES
CONSTITUENTS OF WELL-BEING
Security
• Personal safety
• Secure resource access
• Security from disasters
Provisioning
• Food
• Fresh water
• Wood and fiber
• Fuel
•…
Supporting
• Nutrient cycling
• Soil formation
• Primary production
•…
Basic material for good life
• Adequate livelihoods
• Sufficient nutritious food
• Shelter
• Access to goods
Regulating
• Climate regulation
• Flood regulation
• Disease prevention
• Water purification
•…
Health
• Strength
• Feeling well
• Access to clean air & water
Cultural
• Aesthetic
• Spiritual
• Educational
• Recreational
•…
Freedom of choice
and action
Opportunity to be
able to achieve what
an individual values
being and doing
Good social relations
• Social cohesion
• Mutual respect
• Ability to help others
Adapted from Millennium Ecosystem Assessment 2005
understanding, assessing and acting on invasives in the light of the
changes in ecosystem services and human wellbeing they give rise to
economic analysis
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Economic Analysis of Invasive Species
linking invasions to changes in
human wellbeing
• concern for human wellbeing
provides the context for
economic analysis
• it involves:
– pinpointing the economic
causes of invasions
– assessing their economic
impacts
– finding tools to help in
addressing invasives
• in order to ensure outcomes
which are economically
beneficial, and positive in
human wellbeing terms
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Economic Analysis of Invasive Species
thank you
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Economic Analysis of Invasive Species