Ecological Economics Research Trends

ECOLOGICAL ECONOMICS

RESEARCH TRENDS

ECOLOGICAL ECONOMICS

RESEARCH TRENDS

CAROLYN C. PERTSOVA

EDITOR

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LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA

Ecological economics research trends / Carolyn C. Pertsova (editor)

p. cm

ISBN-13: 978-1-60692-747-2

1. Envoronmental economics--Research. I. Pertsova, Carolyn C.

HC79.E5E2526 2006

333.7072--dc22

2007028901

Published by Nova Science Publishers, Inc.  New York

CONTENTS

Preface vii

Chapter 1 A Definition of ‘Carbon Footprint’ 1

Thomas Wiedmann and Jan Minx

Chapter 2 Consumption and Ecological Economics: Towards Sustainability 13

Oksana Mont

Chapter 3 A Recent Trend in Ecological Economic Research:

Quantifying the Benefits and Costs of

Improving Ecosystem Services 45

Hongli Feng, Manoj Jha, Philip W. Gassman and

Joshua D. Parcel

Chapter 4 Public Support for Renewable Electricity:

The Importance of Policy Framing 83

Kristina Ek and Patrik Söderholm

Chapter 5 A Framework for the Economic Valuation of Land Use Change 105

Lars Hein and Rudolf S. de Groot

Chapter 6 The Environmental Kuznets Curve Hypothesis and its

Evidence for the Spanish Case 127

Jordi Roca and Emilio Padilla

Chapter 7 Sustainability Ranking and

Critical Sustainability Factors of Nations 149

Yannis A. Phillis, Vassilis S. Kouikoglou and Victor Kouloumpis

Chapter 8 Beyond Monetary Valuation:

Understanding the Social Properties of Property 171

Saskia Vermeylen and Dan van der Horst

Chapter 9 Forestry and Rural Development: Exploring the Context as

Well as the Product 187

Phoebe Cochrane

vi Contents

Chapter 10 Nature Reserve Selection for Endangered Species

Considering Habitat Needs : The Case of Thailand 207

Bertrand Hamaide, Jack Sheerin and Charit Tingsabadh

Chapter 11 The Price Formation Process in Timber Auctions and

the Factors Affecting the Price of Beech Timber in Turkey:

A Case Study 231

İsmet Daşdemir and Wietze Lise

Chapter 12 Assessing Sustainable Well-Being: Trends in

Environmental, Social and Economic Policy at the Local Level 251

Federico M. Pulselli, Antonio C.I. Pizzigallo,

Riccardo M. Pulselli and Enzo Tiezzi

Chapter 13 The Dynamic of Land use in Brazilian Amazon:

A Structural VAR with Panel Data Analysis 273

Mário Jorge Mendonça and Vincent Gitz

Chapter 14 Regulation of Non-Point Source Pollution and Incentives for

Good Environmental Practices - The Case of Agriculture 293

Renan Goetz, Yolanda Martinez and Angels Xabadia

Chapter 15 Preferences of Spanish Consumers for Ecolabelled Fish Products 309

M. Dolores Garza Gil and M Xosé Vázquez Rodríguez

Chapter 16 Ecological Productivity: Definition and Applications 325

Shunsuke Managi

Chapter 17 The Appraisal of Projects with Environmental

Impacts Efficiency and Sustainability 337

Joan Pasqual and Emilio Padilla

Index 349

PREFACE

This new book presents new and important research in the field of ecological economics

which is a transdisciplinary field of academic research that addresses the dynamic and spatial

interdependence between human economies and natural ecosystems. Ecological economics

brings together and connects different disciplines, within the natural and social sciences but

especially between these broad areas. As the name suggests, the field is dominated by

researchers with a background in economics and ecology. An important motivation for the

emergence of ecological economics has been criticism on the assumptions and approaches of

traditional (mainstream) environmental and resource economics. Ecological economics

presents a more pluralistic approach to the study of environmental problems and policy

solutions, characterized by systems perspectives, adequate physical and biological contexts,

and a focus on long-term environmental sustainability. Ecological economics can be regarded

as a version of environmental science with much emphasis on social, political, economic and

behavioral issues.

Chapter 1 - The term ‘carbon footprint’ has become tremendously popular over the last

few years and is now in widespread use across the media – at least in the United Kingdom.

With climate change high up on the political and corporate agenda, carbon footprint

calculations are in demand. Numerous approaches have been proposed to provide estimates,

ranging from basic online calculators to sophisticated life-cycle-analysis or input-output

based methods and tools. Despite its ubiquitous use however, there is an apparent lack of

academic definitions of what exactly a ‘carbon footprint’ is meant to be. The scientific

literature is surprisingly void of clarifications, despite the fact that countless studies in energy

and ecological economics that could have claimed to measure a ‘carbon footprint’ have been

published over decades.

This commentary explores the apparent discrepancy between public and academic use of

the term ‘carbon footprint’ and suggests a scientific definition based on commonly accepted

accounting principles and modelling approaches. It addresses methodological questions such

as system boundaries, completeness, comprehensiveness, units, and robustness of the

indicator.

Chapter 2 - In a finite world, developing a sustainable society requires both a more

sustainable management of resources and a more sustainable management of human beings.

Therefore deep understanding of processes underlying systems of production and

consumption is needed. The question that is being asked in this chapter is whether

neoclassical economics can provide solid ground to further advance the economic system and

viii Carolyn C. Pertsova

the society at large considering the known environmental limits, or approaches for future

development and remedial actions should be looked for elsewhere? This chapter outlines

main assumptions and limitations of the neoclassical economics. It demonstrates that the

neoclassical economics that laid grounds for the current economic system is ill-suited to

address the problems that the system created, e.g. environmental pollution and inequalities,

and discusses how ecological economics addresses the identified deficits.

Then, institutional and individual driving forces for consumption are analysed, drawing

on contributions from sociology, ecological economics and psychology. This provides the

basis for discussing the change process that is needed for reaching more sustainable

consumption and better quality of life. It is argued that in studying consumption it is useful to

think in terms of people, places and processes. In order to understand how the change process

towards sustainable consumption should be shaped a 5Es framework is suggested and

discussed.

Chapter 3 - In recent years, there are two notable developments in the research of

ecological economics. On the one hand, a tremendous amount of resources have been

invested to preserve or improve ecosystem services we derive from natural resources. There is

an increasing need for us to better quantify such services and assess their benefits against the

investments that we have made. On the other hand, there are significant advancements in

environmental modeling that can be used to facilitate the quantitative estimation of ecosystem

services. In this study, the authors present an application that combines developments

regarding both of these aspects.

Over the last two decades, the U.S. federal government spent billions of dollars annually

on the conservation of cropland. Such expenditures were supplemented with sizable state and

local government funding. However, the authors’ understanding is incomplete as to the

impacts of these expenditures on the use of conservation practices and their environmental

effectiveness. Expanded knowledge on these issues is greatly needed to support societal

decisions as to how much more, if any, we must do to improve environmental quality to a

desired level. In this article, the authors provide some insights into these issues by examining

two broad questions: 1) What conservation practices are currently in place, what is their

coverage, and what is the cost of these practices? 2) What have been the environmental

impacts of the currently-installed conservation practices?

These two questions were examined both at the national level and, as an in-depth case

study, at the state level for the state of Iowa. At the national level, information on government

expenditures were gathered and previous literature was surveyed to provide an overview of

what the authors know with regard to the two questions. At the state level, to address the first

question, the authors collected data from various surveys, and from federal and state

conservation program sources. A database for the costs and coverage of major conservation

practices was developed. In order to answer the second question, the widely used Soil and

Water Assessment Tool (SWAT) water quality model (Arnold et al., 1998; Arnold and

Forher, 2005; Gassman et al., 2007) was employed to estimate the impacts of key

conservation practices. The challenges and problems encountered in establishing accurate

statewide cost estimates were discussed. The advantages and drawbacks of modeling were

also identified to put our results in perspective.

Chapter 4 - Individuals’ contribution to electricity generation based on renewable energy

sources can be channelled in two ways. The “green” market approach relies on an

‘unconditional’ contribution to renewable power while the certificate scheme represents a

Preface ix

corresponding ‘conditional’ support (i.e., I can only contribute if the scheme is at place, and if

so many others will also contribute). In both systems the support to renewable power is made

possible through a price premium paid for these types of energy sources. In this chapter the

authors draw on the economics literature on individual contributions to public goods and

empirically test the overall hypothesis that the framing of renewable power support in a

‘conditional’ and an ‘unconditional’ scenario, respectively, will tend to trigger different types

of moral deliberations. In the former case the deliberations concern mainly the division of

efforts between individuals, while the deliberations in the latter case relate more to the

characteristics of the public good in question and the perceived personal responsibility and

ability to contribute to this good. This implies also that the variables determining the

willingness to accept price premiums for renewable power may differ across schemes

considered. The authors analyze the responses to dichotomous willingness to pay (WTP)

questions from two different versions of a postal survey sent out to 1200 Swedish house

owners. A random effects binary logit model is applied, and the estimated marginal effects

support the notion that different types of factors tend to dominate choices depending on the

support scheme considered. From these results follow a number of important implications for

measures undertaken to increase the public’s valuation of renewable power as well as the

legitimacy of measures to increase renewable power production.

Chapter 5 - There is a broad recognition that sustainable land management (SLM) is

crucial for ensuring an adequate, long-term supply of food, raw materials and other services

provided by the natural environment to the human society. However, to date, SLM practices

are the exception rather than the rule in many parts of the world. Among the causes for

unsustainable land management is a general lack of understanding of the economic costs of

land degradation and the benefits of sustainable land management. This paper presents a

methodological framework for analyzing the benefits of sustainable land management. The

framework comprises three complementary types of assessment: partial valuation, total

valuation and impact analysis. The first two allow for static assessment of selected

respectively all economic benefits from a certain land use. The third approach is dynamic, and

allows for analyzing the costs and benefits related to changes in land use. Each approach

requires the application of a number of sequential methodological steps, including (i)

ecosystem function and services identification; (ii) bio-physical assessment of ecosystem

services; (iii) economic valuation; and (iv) ecological-economic modeling. The framework is

demonstrated by means of a simple case study in the Guadalentin catchment, SE Spain.

Chapter 6 - Since the beginning of the 1990s, analysis of the relationships between

economic growth and environmental pressures has been influenced by the hypothesis known

as the environmental Kuznets curve or the inverted U relationship between environmental

pressure and per capita income. According to this hypothesis, once a certain income level has

been achieved, economic growth leads to improvements in environmental quality. This

chapter analyzes and discusses the theoretical basis of the hypothesis and the available

empirical evidence. The research then analyzes the relationship between per capita GDP and

various atmospheric pollutants for the Spanish case. The results show that in general, the

empirical evidence for the Spanish case does not support the hypothesis. The evidence found

shows that by itself, economic growth does not lead to the reduction in pollution suggested by

the hypothesis, but to the opposite effect, at least if the appropriate measures to avoid this are

not taken. This is especially evident in the case of greenhouse gases, for which there is a

strong contrast between their actual evolution and Spain’s international commitments.

x Carolyn C. Pertsova

Chapter 7 - It is nowadays accepted that human welfare cannot be sustained without the

preservation of natural resources and without ensuring social coherence and stability. As a

result, there has been growing interest among policy-makers and scientists in sustainability

and sustainable development. Sustainable decision-making requires systematic methods for

measuring and improving sustainability. In this work the authors present a model which uses

fuzzy logic and combines basic indicators of environmental integrity and human welfare to

provide a measure of sustainability. Using sensitivity analysis, the authors identify those

indicators that each country should improve if it is to improve its sustainability status. Finally

the authors provide a sustainability ranking of various EU countries together with the most

critical indicators.

Chapter 8 - Over the last decade, Ecological Economics has provided key contributions to

the human understanding of the importance and value of ecosystem services. While there has

been much debate about the validity and limits of the various existing monetary valuation

tools, in this chapter the authors actually wish to draw attention to the extension of the

concept of valuation. The ‘economistic’ language of valuation has gained dominance in the

policy domain, yet the literature on policy evaluation is more pluralistic, and tends to stress

the importance of developing and using other quantitative and qualitative measures of value

to complement monetary estimates of costs and benefits of policy interventions. Indeed

‘beyond monetary valuation’ lies a rich and partially unchartered territory. In this chapter the

authors draw attention to the possibility to extend the notion of valuation, and its observation,

beyond the individual and towards the social, cultural and institutional. The authors focus on

the wider notion of property in relation to value and contrast the simple economic typology of

property rights with the anthropological concept of property as social relations that govern the

conduct of people with respect to the use of certain material objects. The authors argue that

these recent anthropological observations, whilst mostly derived from studies of non-western

groups, are (a) likely to be compatible with many observations of publics and stakeholders in

developed countries and (b) can provide a framework to engage with values in human society

in a more holistic way. The authors conclude that a more critical and sensitive look at enacted

property relations can benefit ecological economics by complementing the insights gained

through the use of more established environmental economics approaches and by potentially

reaching beyond some of the limitations of these approaches to inform more contextualized

and locally appropriate policy interventions.

Chapter 9 - The nature of rural development has undergone considerable change in the

last 30 years. It is now recognised to include the construction of new networks, the

combination of resources, and the renewed use of social, cultural and ecological capital. It

often involves the reconfiguration of rural resources, many of which have previously been

considered without value. Recent theories about rural development pay more attention to

causes of local variations in development capacities and outcomes. Ecological economics as a

discipline should attempt to equip itself with the approaches and tools to assess the complex

and multi-faceted nature of rural development. This chapter discusses how various works in

the field of Ecological Economics have started to build theories and approaches to do this. It

goes on to review contributions from other disciplines, the Sustainable Livelihoods Approach

and selected works in the fields of institutional and new institutional economics. Insight

gained is used to inform the development of an approach to guide an appraisal of the rural

development process and factors important in generating outcomes. The approach developed

is used to assess several woodland related initiatives in Scotland. The assessment reveals the

Preface xi

importance of factors such as culture, informal arrangements, payments in kind and networks

in achieving environmental, economic and social outcomes and making the initiatives viable.

It also brings to light constraints to development outcomes. It proposes that quantitative

assessments of outcomes should be embedded in a broader analysis such as this in order to

provide understanding and to inform policy. Also that further research is needed to test and

refine tools and frameworks to guide the appraisal approach.

Chapter 10 - Creating or enlarging nature reserves to preserve key habitats and species

living within those reserves is one of the important strategies to conserve biodiversity. This

paper uses 0-1 programming models originating from the location science and termed SSCP

(or Species Set Covering Problems), requiring representation of each and every species in the

system within a minimum number of land parcels. The species under consideration in this

study are the 68 mammals, reptiles and amphibians listed as threatened species in Thailand by

the International Union for Conservation of Nature and Natural Reserves (IUCN), and the

sites under consideration are known in Thailand as “amphoes”, or small administrative

districts. Since habitat requirements rarely have been introduced explicitly in reserve

selection methods, this paper aims at identifying strategies to protect each threatened species

while taking into account the habitat range of each particular terrestrial vertebrate of the data

set. Results of the model are compared with the standard SSCP model and differences in

outcomes are evaluated. Estimating the opportunity costs of converting countryside and

forested areas for conservation purposes in terms of loss in economic output and

incorporating them in the formulations further refines the model. Reserve networks that

protect all threatened species and also that consider habitat needs are then selected at

minimum opportunity costs. Results are compared with the former models to evaluate

conservation policy options.

Chapter 11 - Numerous factors affect the auction price of principal forest products of the

state forest enterprises in Turkey. This study tries to determine the factors affecting the price

of third-class normal-sized beech timber sale by auctions. It is carried out in two rival state

forest enterprises (Bartın and Yenice) of Zonguldak Regional Forest Directorate in the West

Blacksea Region of Turkey. The data in this study has been obtained from a total of 149

timber auctions in the period 1998-2002. The effects of seasonal and other factors on the

auction price of beech timber are investigated by variance analysis, seasonal and monthly

indices, correlation, regression, and principal component analyses respectively.

The analyses indicate that beech timber prices in Yenice differ significantly over the

seasons, but there are no significant differences in beech timber prices in Bartın. Moreover,

the month with the highest timber price is April in both Yenice and Bartın. A correlation

analysis indicates that Yenice is more dependent on Bartın than the other way around.

Furthermore, according to the regression analysis, the rival prices and price mark-ups

significantly explain the variation in prices. Additionally, the quantity offered during an

auction significantly explains the prices in Bartın, while the log size and time between

auctions significantly explains the prices in Yenice. Finally, the principal component analysis

indicates that the (1) price and timing of the auctions, (2) demand level, and (3) average

volume per log are the main decision variables.

Chapter 12 - The Index of Sustainable Economic Welfare (ISEW), introduced by H. Daly

and J. Cobb in 1989, is an ecological economic instrument that was created in order to

integrate the information embodied in GDP. Actually, GDP has been deeply criticizing for

long time as an indicator of welfare: some corrections and adjustments are hence necessary in

xii Carolyn C. Pertsova

order to consider those environmental and social aspects that are relevant for human life,

either ignored or wrongly treated in the official estimates of GDP. The ISEW was already

calculated for several national economies but rarely for a region. The aim of this paper is to

show the ISEW calculation and the results for a local economy, the Province of Pescara in

Italy. This case-study is one of the first time series analyses of the ISEW (1971-2003) for a

local (sub-national) territorial system. The ISEW is a tool that provides a thorough

representation of the local socio-economic organization, that is important in those cases of

administrative decentralization, autonomy and responsibility at the local level. For this

reason, public authorities need a more and more comprehensive knowledge of the

characteristics and peculiarities of the territorial system they manage. The maintenance of

identity for a local system constitutes a unique resource to be emphasized, because the

diversities among different sub-national areas are a prerequisite of sustainability at the

national level. The results show a stagnation of the ISEW after the 1980s, compared with a

constant increase of GDP during the period 1971-2003.

Chapter 13 - This article investigates the stochastic and dynamic relationship of land use

in Brazilian Amazon. The authors adopt the structural VAR (SVAR) model with panel data to

access for impacts of the identified exogenous sources. In this study the authors expand and

refine previous works to tackle these two metodological issues. First, the authors take into

account the heterogeneity among land units using the panel data analysis model [(Hsiao,

1995), (Baltagi, 1995), (Arellano, 2003)], mixing information concerning variation of

individual unities with variations taking place over time. Second, in the literature of structural

VAR, the contemporaneous relationship is identified on the basis of prior information

supported by theoretical considerations. Notwithstanding, other distinctive appeal of this

article is the employment of Directed Acyclic Graphs (DAGs) estimated by the TETRAD

(Spirtes et alli, 1993) to obtain the contemporaneous causal order of the SVAR.

The article is organized as follows. Section II defines the transitional land-use model.

Section III discusses identification issues to ascertain which are the true contemporaneous

relationships among the land uses. The authors also introduce here the general issues

regarding the DAGs model. In Section IV the authors propose a consistent methodology to

estimate the model proposed in section II that contemplates the structural VAR with panel

data. The description of database is done in Section V. The econometric results are presented

in Section VI. Finally, the authors discuss the results and offer some concluding remarks on

Section VII.

Chapter 14 - In this paper the authors propose a combination of incentives (deposit￾refund system) to encourage the adoption of good environmental practices to reduce nitrate

emissions due to livestock management. The main objective of this study is to describe the

equilibrium conditions that make adapting good environmental practices desirable from social

and private points of view. For this purpose the authors design a specific tax on a polluting

input (deposit) and a subsidy for the voluntary adoption of good environmental practices

(refund). In contrast to previous work (Fullerton and Wolverton, 2000), the deposit refund

system is not linked to output or input but the way the input is applied. As the correct

application of good environmental practices cannot be observed by the regulator, the payment

of the refund does not depend on any control exercised directly by the regulator. Instead, the

payment depends on the presentation of a certificate, issued by independent persons or firms

certified to apply the polluting input. Those persons or firms guarantee with their reputation

and future business perspectives that the polluting input has been applied in accordance with

Preface xiii

good environmental practices. In practice, the certified person can be a farmer of the region

who has obtained a license to apply the polluting input.

The theoretical analysis is presented in the following section and thereafter the authors

present an empirical analysis for the optimal management of livestock and cultivation

activities.

Chapter 15 - Ecolabelled fish products, obtained under the sustainable fisheries

certification programme, are proliferating in international food markets. This was boosted by

the creation of the Marine Stewardship Council (MSC) in 1996 at the request of the WWF

and the multinational company Unilever, whose function it is to accredit world fisheries

sustainably managed in accordance with the directives put forward in the FAO’s Code of

Conduct for Responsible Fishing. The ecolabels guarantee consumers that a certain fish

product comes from a fishery which conforms to regulations on sustainable fishing. And the

principal factor which will determine the success or failure of ecolabelling is the acceptance

of the products by the consumer.

This chapter aims to find out Spanish consumers’ preferences for ecolabelled fish

products. In order to do so, the authors have selected the national market’s most highly￾demanded fish products obtained by Spanish fleets, whose consumption has undergone a

growth in trend in recent years. The results clearly show the preference of Spanish households

for this type of product.

Chapter 16 - The discussion on environmental problems and economic growth is closely

related to the concept of sustainable development. The best known definition is given by the

World Commission on Environment and Development - the Brundtland Commission, which

promoted closer links between the environment and development. They emphasized issues of

social and economic sustainability. Sustainable development is now featured as a goal in

dozens of national environmental policy statements, and in the opening paragraphs of Agenda

21 adopted by the Earth Summit in Rio de Janeiro in June 1992. The Johannesburg World

Summit 2002 had a renewed political commitment to Agenda 21. The Brundtland report's

Our Common Future defines sustainable development as "development that meets the needs

of the present without compromising the ability of future generations to meet their own

needs". This definition is ambiguous and raises more questions than it answers. A more

precise definition would be, for example, requiring utility levels, or resource stocks, or total

capital stocks including natural capital and human capital to be non-decreasing over time.

Thus, sustainable paths confront standard optimal solutions as formalized in the traditional

theory of economic growth. Key point for sustainable development is continuous

technological improvements or productivity progress. This chapter provides measures from

theoretical and empirical models. Additionally, empirical results and their interpretations are

provided.

Whether pollution abatement technologies are used most efficiently is crucial in the

analysis of environmental management because it influences, at least in part, the cost of

alternative production and pollution abatement technologies. The role of environmental

policy in encouraging or discouraging productivity growth is also well documented in the

theoretical literature. As a result of this policy, two possibilities are likely. First, abatement

pressures may stimulate technological innovations that reduce the actual cost of compliance

below those originally estimated (e.g., Jaffe, Newell, and Stavins, 2003). Second, firms may

be reluctant to innovate if they believe that regulators will respond by ‘ratcheting-up’

standards. In addition to the changes in environmental regulations and technology,