Project R-4100

Sustainable and economically efficient ecosystem management: modeling biophysical scale followed by optimizing payments for ecosystem services (Research)

The ecological systems that provide services on which we and our economics depend are in distress, because the economic scale is not taking into account physical natural limits of the planet. Within this economic scale, ecosystems are managed through market-based instruments (MBIs), with Payments for Ecosystem Services (PES) to address mismanagement of ecosystem services (ES). The application of PES does not necessarily lead to an economically efficient outcome. Both the unsustainable scale and the inefficiency of PES are mostly due to transaction costs in gaining accurate data or interdisciplinary expertise. Therefore, taking advantage of the interdisciplinary approach within the Centre for Environmental Sciences (CMK), the existing compartmentalized knowledge from different disciplines on ecosystems is integrated. In order to guarantee sustainability, this project first defines the maximum economic scale based on the relationship between human stress, ecosystem state, and the cost of a change in state. This requires dynamic integration of biological and economic results in one model. Second, within this sustainable economy, the cost-effectiveness and efficiency of PES is then addressed through defining the concepts of conditionality, transaction costs, and property rights. This requires close collaboration between economic, biological and legal analysis. The results of my research will offer a break-through approach in how terrestrial ecosystems should be managed in an economically sustainable and efficient way.

01 October 2012 - 30 September 2016