biological deversity economical stability
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Biological Deversity Economical StabilityTRANSCRIPT
BIOLOGICAL DIVERSITY, ECOSYSTEM STABILITY
AND ECONOMIC DEVELOPMENT
by
Fraser Smith
CSERGE Working Paper GEC 94-10
BIOLOGICAL DIVERSITY, ECOSYSTEM STABILITY
AND ECONOMIC DEVELOPMENT
by
Fraser Smith
Department of Biological Sciences, Stanford University, Stanford, CA 94305-5020, USA
Present address: Decision Focus, Inc., 650 Castro Street, 3rd Floor,
Mountain View, CA 94041-2055, USA Acknowledgements The Centre for Social and Economic Research on the Global Environment (CSERGE) is a designated research centre of the U.K. Economic and Social Research Council (ESRC) Valuable comments on an earlier version of the manuscript were received from Neil Adger, Tim Swanson, Rob Jackson and Bob Rowthorn, Bengt-Owe Jansson and two anonymous reviewers. Thanks also to members of Stanford University's Center for Conservation Biology for helping to sharpen some of the ideas in the early stages of this project. ISSN 0967-8875
Abstract
It is clear from the scale of anthropogenic resource use that economic systems should be
brought within biophysical limits as soon as possible. But biophysical limits to resource use are
difficult to determine. Also, it is difficult to know when and where these limits are breached, and
to allocate responsibility. Economic instruments for biophysical sustainability that use reliable
and consistent surrogate measures of these limits might, however, be workable. In this paper,
an instrument based on the conservation of biodiversity is presented, and its main advantages
and limitations are discussed.
A growing body of ecological research gives compelling evidence that biodiversity confers
stability on ecosystems by buffering them against natural and artificial perturbations, and that it
increases system productivity. The stability and productivity of ecosystems are integral parts of
overall biophysical integrity. These results therefore give the first clear evidence that biodiversity
acts as a measure of biophysical integrity. Since biodiversity - at least species richness - is
comparatively easy to measure, biodiversity conservation might be a viable surrogate measure
for driving economic activity towards biophysical sustainability.
A biodiversity constraint would be a framework for policies rather than a single policy. These
policies, be they local, regional or global, would be designed to prevent and penalise biodiversity
loss, while favouring economic activities that conserve biodiversity. Possible mechanisms are
discussed briefly in the paper. What makes a biodiversity constraint doubly attractive is that it
would also conserve the potentially large economic use and option values of biodiversity itself,
thus removing the need for separate measures for its conservation.
Key words: Biodiversity; Stability; Sustainability; Futures
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1. INTRODUCTION
As the human population grows, so does its total impact on the world- biophysical systems
(Vitousek et al., 1986; Holdren, 1991). Public concern about the increasing strain on natural
systems is manifested in part in the form of political and other efforts to protect endangered
natural populations and species, and to promote biodiversity conservation (Angier, 1994; World
Resources Institute, 1992, 1994; World Conservation Monitoring Centre, 1992). This increase
in public concern has come about because the consequences of current biophysical changes
for human welfare are unknown and possibly highly detrimental.
Faced with these problems, the logical course of action would be to bring human economic
activities within biophysical limits as quickly as possible. Among the many difficulties in
achieving this aim two in particular stand out. The first is that defining and establishing
biophysical limits, and knowing when particular kinds of human activity breach them, are very
difficult tasks; the second is that a necessary conjunct to moving the global economy towards
biophysical sustainability is a substantial increase in distributional equity, the political and
economic barriers to which are formidable.
Although ways are being found to steer local economic development along paths that are more
biophysically sustainable than in the past, the intertwining of local and global economic
processes requires that sustainable development be co-ordinated to some extent at the global
level. Sustainable development is unlikely to be successful if it takes place piecemeal because
the global economy must also change from a system in which the primary goal is profit
maximisation to a system in which the primary goal is achieving efficient allocation within
biophysical limits.
This paper outlines a framework that might be used to guide the global economy (and, by
extension, local and regional economies) towards biophysical sustainability. This framework is
based on the conservation of biodiversity, which, as well as ensuring its own continuing
existence as a valuable resource base, serves to stabilise whole ecosystems, thus avoiding the
leap into the unknown that would come with global ecological degradation. The paper does not
explore individual policies that might be applicable in particular regions but instead discusses
the advantages and disadvantages of using biodiversity conservation as a benchmark for
setting economic policy, and provides a sense of the legalities and institutional structures
required to build this framework. It is intended that the consistent application of a 'biodiversity
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constraint' on economic activity would circumvent the problem of dealing with fundamental
biophysical limits, and would result in greater distributional equity.
There are several stepping-stones to be crossed before assembling the framework of a
biodiversity constraint. First, we need to know why biophysical sustaina-bility is necessary for
economic development; second, we need to know why biodiversity is a good surrogate measure
of fundamental ecological processes; third, we need to understand why biodiversity
conservation would be an efficient motivator of sustainable development; and fourth, we need to
understand the probable short- and long-term economic consequences of conserving bio-
diversity, in order to know what must be added to biodiversity conservation in order to construct
a workable constraint on economic activity. Although the structure and operation of a
biodiversity constraint are outlined in this paper, an exhaustive analysis of these areas is held in
abeyance for future work. Instead, the present paper concentrates on the rationale for adopting
a biodiversity constraint on economic development, and outlines in broad terms how the
constraint might work.
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2. TERMS OF REFERENCE, DISCLAIMERS AND CAVEATS
The problem of achieving biophysical sustainability is viewed here with an ecological-economic
perspective. This perspective views the primary task in economic development as
understanding the limits of natural systems to different kinds and combinations of economic
activity. Only once limits are known should allocative efficiency and distributional effects be
considered. In this context, a biodiversity constraint would provide a measure of natural limits
within which allocative efficiency and equitable distribution of wealth could be pursued.
This approach is in sharp contrast with mainstream economics wherein cost- benefit analysis
would, in principle, provide a means to assess how many species could be lost to economic
activity. The greatest economic efficiency would be achieved when the marginal cost of
extinguishing a species equals the marginal benefit. But the mainstream approach is
hopelessly inadequate when applied to ecosystems because we have virtually no idea how the
deletion of particular species, or the sequence of their deletion, would affect particular
ecosystems, nor how the dynamics of those altered ecosystems would impinge on the
economy, now or in the future. Not only is the option value of biodiversity in relation to
ecosystem function potentially large, it is literally incalculable, not least because the option
values of individual species depend on the presence or absence of other species with which
they are ecologically associated. The complex, interrelated nature of the natural systems on
which economies depend precludes our knowing with any reasonable degree of accuracy how
long people can get away with disrupting them. Advocating the adoption of ecological
constraints on economic activity is therefore based on the kind of a priori precautionary stance
taken in ecological economics.
Regarding option and use values of biodiversity, the distinction is made in the previous
paragraph and hereafter between the option value of species and the option value of
biodiversity in relation to ecosystem function. In addition to the current use value and the future
option value of existing genetic material1, biodiversity has option value at the ecosystem level
because it provides the option for future economic benefit from the services of stable and
productive ecosystems.
A biodiversity constraint could not conserve all remaining species on the planet. Many species
1 For example, medicinal plant species whose pharmacological properties are currently known, and those whose properties are currently unknown or for which there is currently no need.
4
are already extinct from human activities and, as the human population grows, so more
biodiversity will be lost. Even if ecologically disruptive activities could be terminated
immediately, the global rate of anthropogenic extinctions would remain high for years or
decades because the effects of human activities often take a long time to work their way
through ecological systems. In addition, highly restricted or rare species - for example, those
with geographical ranges as small as a tennis court (Mayr, 1963) - could be sent extinct
inadvertently by even small-scale activities. While vigilance for inherently vulnerable natural
systems will be important in achieving ecologically sustainable development, the conservation of
all remaining populations and species on the planet is not a realistic venture; rather, it is an ideal
for people to strive towards.
In the present paper, all extinctions during this century are assumed to be anthropogenic. The
average background rate of extinctions in the geological past is about one per year globally (see
Wilson, 1992) and the rate of recorded extinctions since 1900 for which the cause is known is
about 2 per year (see Smith et al., 1993a). But only 0.1-1% of all described species have been
reassessed since they were discovered. If, in any given region, a species is known to have
become extinct through, for example, habitat destruction, then other ecologically similar species
are probably also at risk or extinct in that region. Therefore, the true rate of anthropogenic
extinctions since 1900 is probably much higher than 2 per year, and the rate of recorded
extinctions is expected to climb by about two orders of magnitude in the next century (see
Wilson, 1992; Smith et al., 1993b).
Certain terms relevant to the discussion are defined in detail in the Appendix. In short,
'biodiversity' is taken to mean the total genetic, morphological and functional diversity of all
individual organisms that are members of an ecological community or ecosystem; 'species
richness' is taken to mean number of species per unit area; 'ecosystem' is one or more
biological communities plus its abiotic environment; 'stability' is the tendency for a system to
return to its original state; and 'sustainability' is here taken as the 'stronger' biophysical definition
rather than the 'weaker' intergenerational definition (the ability of the present generation to meet
its needs without compromising the needs of future generations) because we are considering
how to make the full transition to an economy within biophysical limits, for reasons given below.
The term 'biophysical limits' in the text is used to refer to limits to economic development that
are either biological (such as the amount of sunlight fixed by plants) or physical (such as the
capacity of the atmosphere to absorb and recycle greenhouse gases), or a combination of both.
5
3. THE NEED FOR BIOPHYSICALLY SUSTAINABLE ECONOMIC DEVELOPMENT
3.1 The scale of the global economy
Most of the time, economists do not think about what the world might be like a century or two
from now if current patterns of resource use were to continue. This would be perfectly
reasonable in a world where the material or energetic throughput of the global economy were
small relative to the overall scale of the world's biogeochemical cycles. But the global economy
is now large relative to these cycles (see Vitousek et al., 1986; Holdren, 1991) and this forces us
to con-sider how current patterns of resource use impinge on future economic welfare.
There are two problems. The first is that in a world where the scale of resource use by humans
is a substantial fraction of the global scale of resource cycling, the costs of appropriating natural
resources should be high. For the most part, these costs are currently too low (see Pearce and
Warford, 1993). The second problem is that, even if natural resources were priced
appropriately, the cost of their use is discounted into the future at far too high a rate. Because
biogeochemical processes such as the cycling of nutrients through ecosytems usually operate
over many years or decades, the full effects of economic activities on natural processes are
unlikely to be seen within a lifetime. It is therefore inappropriate to discount the future at the
standard 5% per year. In a world where future human welfare depends so heavily on the future
state of natural systems, it is more sensible to discount the future at a rate commensurate with
the time for biogeochemical cycles to absorb anthropogenic perturbations, rather than at a rate
commensurate with human lifetimes.
The interplay between economic systems and natural systems is so complex that it is virtually
impossible to know how long a biophysically unsustainable economy could continue to exist, nor
even how biophysically unsustainable the current global economy actually is, if at all2. However,
precaution dictates that biophysical sustainability should be a long-term goal (i.e. over decades
or centuries). It is not enough to achieve intergenerational sustainability, as defined above,
because the needs of even the next generation are unclear and, even if they were clear,
meeting them with the maximum possible current resource use would be foolishly risky.
Biophysical sustainability is a safer long-term bet, and intergenerational sustainability is an
important shorter-term goal towards achieving it.
2 The combination of the size of the global economy and its critical dependence on fossil fuels (as opposed to current energy flux) is one of the many - albeit weak - indicators of its current biophysical unsustainability.
6
3.2 The problem of measuring sustainability
How do we know whether or when biophysical sustainability is achieved, and what is the best
route towards it? There are two layers of ignorance which must first be peeled away before this
question can be addressed. The first is establishing whether natural systems have thresholds
beyond which they flip to new states. When perturbation experiments on whole ecosystems
(e.g. Persson et al., 1993) are carried out, ecologists are often little the wiser about the possible
existence of thresholds because either the system has no distinct states or the perturbation was
of the wrong type to take the system to a new state. Even if this first layer of ignorance can be
overcome, a second presents itself, which is that, because ecological-economic interactions are
complex, we do not know how to properly establish biophysical limits on economic activities.
Although this problem may be soluble, it is necessary also to consider surrogate measures of
biophysical integrity.
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4. BIODIVERSITY AND ECOLOGICAL PROCESSES
4.1 The solution: a surrogate measure
Surrogate measures of biophysical integrity should work in a consistent way in all geographical
regions and be easily quantifiable. One candidate might be the stability of nutrient or energy
flows through ecosystems. These flows are a substantial element of overall biophysical integrity
and powerful tools have been developed by ecologists for characterising an ecosystem's
energetic condition (Odum, 1983; Jørgensen, 1988; Wulff et al., 1989; Wagensberg et al.,
1990), as well as ecosystem stress from nutrient perturbations (Schindler, 1990; Asbury et al.,
1991; Carpenter et al., 1992; Persson et al., 1993; Rudstam et al., 1993). However, these flows
are not easily quantifiable and, moreover, ecosystems are not always easy to delineate (see
Appendix 1). A more practical measure of biophysical integrity is the amount of biological
diversity in an ecosystem -specifically, species richness because species are distinct biological
entities, and because most ecosystems have yet to lose the majority of their species. Other
measures of biodiversity (genetic diversity, population diversity) would be equally good
indicators of biophysical integrity if they were as easily quantifiable as species richness.
4.2 Biodiversity as a measure of biophysical integrity
For biodiversity to be a measure of biophysical integrity it must be demonstrated to show a clear
association with ecosystem processes such as nutrient cycling. Such a relationship has only
recently been demonstrated by ecologists. Although the results of the few studies completed so
far have yet to be widely confirmed, the results themselves are compelling.
Coming from studies of food web models, the prevailing view in the 1970s and 1980s was that
ecosystems with a high degree of internal connectivity (associations among species) tend to be
dynamically unstable: an oscillation in the abundance of one species could lead to perturbations
in the populations of many others. By contrast, ecosystems with low internal connectivity tend
to be dynamically stable. The corollary of this view is that most species in an ecosystem are
functionally redundant. Therefore, an ecosystem's stability would not be significantly reduced if
most of its component species were removed (see May, 1972, 1973, 1981; McMurtrie, 1975;
Pimm, 1979; Beretta et al., 1987; Soulé et al., 1992). However, a mixture of theoretical and
experimental work since the 1970s has produced a smaller body evidence to show that the
internal complexity of an ecosystem is positively correlated with its stability (DeAngelis, 1975;
McNaughton, 1977; Begon et al., 1986, Table 21.1; Pilette et al., 1990 Wagensberg et al., 1990;
Frank and McNaughton, 1991; Moore et al., 1993).
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Recent alterations to the prevailing view have come from studies on the functional redundancy
and productivity of ecosystems.
Ñ Functional redundancy. An alternative hypothesis from the previling view runs as follows.
Although an ecosystem's stability against small perturbations might be unaffected by species
deletion, the same cannot be said about its stability against large perturbations. In a system
from which many species have been deleted, the remaining species would be critical to the
system's integrity, and a full complement of species gives an ecosystem a kind of 'buffering
capacity' (Jørgensen, 1990) against large perturbations (see also Walker, 1992). Tilman and
Downing's (1994) work on grasslands supports this hypothesis. The primary productivity
(amount of sunlight converted to plant tissue) of grassland communities with a full complement
of species shows a greater resistance to drought, and a greater resilience in recovering from it,
than communities with less than the full complement of species. They derive a curvilinear
relationship between species richness and stability such that each species lost has a
progressively greater negative impact on drought resistance. In grassland plots with a bare
minimum of species, a stressful perturbation that eliminates one or more species risks
destabilising the system within a plot because no surviving species of a similar functional type
will be present to take the place of the lost species. In cases like this, recovery is limited by the
rate at which the lost species can recolonise from elsewhere.
In economic language, this buffering capacity is a kind of substitutability among species within
functional groups. But just as goods of a similar functional type have differential utility, so
species have differential importance. So-called 'keystone' species provide critical support to
wide arrays of other species with which they interact. If they are removed from an ecosystem,
many others will follow (see Gilbert, 1980). The sequential removal of species from an eco-
system would therefore not necessarily produce a smooth reduction in stability.
Ñ Productivity. Tilman and Downing's (1994) work on grasslands shows not only that a full
complement of species buffers ecosystems against large perturbations but also that it enhances
productivity. Experimental grassland plots with a full species complement recover faster from
perturbations than those with a minimal or near-minimal complement. Tilman and Downing
(1994) hypothesise that the 'fully loaded' plots are more efficient at processing water and
nutrients. This hypothesis is confirmed by Naeem et al. (1994) using the so-called Ecotron, a
macrocosmic, climate-controlled, laboratory ecosystem (see Lawton et al., 1993). Ecotron units
9
containing relatively more species in each functional group (producers, consumers,
decomposers) are relatively more productive, processing nutrients and waste relatively faster
and more efficiently.
Based on the supposition that these macrocosmic patterns reflect the dynamics of whole
ecosystems, the view now emerging about biodiversity (species richness) in relation to
ecosystem stability is that there are two evolutionary forces at work. As Robert May puts it,
'One [force] is to pump up species diversity to allow an ecosystem to make the most of its
resources. The other is to reduce species diversity to avoid generating fragility. History ... may
have selected a subset of complex ecosystems that balance these two pressures' (see Cherfas,
1994)3.
3 One possible test of this hypothesis would be a comparison of the deciduous forests of Europe, North America and Asia. The european forests have reduced species richness compared with the others, and Schulze and Mooney (1993) hypothesise that the European forests might be more susceptible to the effects of acid rain and stratospheric ozone depletion.
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5. THE EFFICIENCY OF BIODIVERSITY CONSERVATION AS A MOTIVATOR FOR
SUSTAIANBLE DEVELOPMENT
With strong evidence that species richness stabilises ecosystem processes, it is logical to
propose biodiversity as a measure of biophysical integrity. Eco-systems that are 'fully loaded' in
terms of biodiversity will be at their most resilient and productive, playing their full part in the
global biogeochemical processes on which the global economy is based. More particularly,
they will be able to provide the widest possible array of resources to regional and local
economies. The conservation of ecoystem processes would in principle ensure the
conservation of biogeochemical cycles but, without specific measures to conserve biodiversity,
a well-stocked larder of species would not be guaranteed. Biodiversity conservation4 not only
ensures the 'option value' of continued eco-logical stability but also guarantees the current use,
plus options for future use, on the widest possible variety of genetic resources. As a motivator
for sustain-able development, biodiversity conservation would therefore be highly effective and
efficient. Once biophysical sustainability had been achieved, an economic constraint based on
biodiversity conservation could continue to maintain it.
4 The primary goal of biodiversity conservation is to maintain all species and populations of species. It is distinct from so-called species conservation, which serves to protect only charismatic species like pandas.
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6. ECONOMIC CONSEQUENCES OF CONSERVING BIODIVERSITY THE
DISTRIBUTION OF RESOURCE USE
Biodiversity conservation by itself could not act as a biodiversity constraint. The problem is that
economies would respond differentially to the conservation of biodiversity. Here, two
contrasting economies are very briefly considered: Papua New Guinea and California. Papua
New Guinea has a few large extractive industries (e.g. gold, copper, timber) but no heavy
manufacturing industry to speak of, relatively basic financial industries, and a growing service
sector based largely around tourism. The vast majority of Papuans are rural and derive most of
their living from the natural resources around them by farming and hunting. The population
growth rate is 2.3% per year (Population Reference Bureau, 1993). A constraint on economic
activity that prevents species loss in Papua New Guinea would steer the country's economic
development slightly, but not sharply, away from its current path. Probable growth industries
would include
(i) sustainable timber extraction5;
(ii) the licensing of the country's genetic resources and, perhaps later, a domestic
biomedical industry;
(iii) tourism. Because a biodiversity constraint would not alter the country's development
path drastically, the growth in GDP per capita in Papua New Guinea might be largely
unaffected by the transition to sustainability.
By contrast, California already has a biodiversity constraint of sorts, in the form of the federal
Endangered Species Act, one of the first enactments of which was to restrict housing
developments on San Bruno Mountain near San Francisco to protect an endangered population
of the Mission Blue butterfly (Icaricia icarioides missionensis). However, the Endangered
Species Act has had arguably no effect on restructuring the Californian economy towards
sustain-ability because the Californian economy simply has too many economic links with the
rest of the world for that to be possible, and because most of the state's industries do not
directly affect its domestic biodiversity.
5 According to the Tropical Forest Action Plan, current logging activity in Papua New Guinea, much of it clear-felling, exceeds sustainable levels because the resultant land erosion has high economic costs (Bartelmus et al., 1993). Nonetheless, the country's forests are still mostly intact and in many parts of the country logging is carried out by local people using portable sawmills which cut selected trees into the manageable pieces on site. With this extraction method, the spatial patterns of logging resemble natural treefalls, and it is therefore ecologically sustainable because deleterious ecological and economic side effects are largely avoided.
12
The Californian example shows that domestic moratoria on species loss would by themselves
probably fail to restructure the economies that contribute most to global environmental change.
A global moratorium would be equally useless because, except in rare cases, it would be
impossible to apportion blame for a particular species extinction to economic players far
removed from the species- home. Therefore, a workable biodiversity constraint would need
more than just the conservation of biodiversity.
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7. THE BIODIVERSITY CONSTRAINT: A FRAMEWORK FOR POLICIES TOWARDS
SUSTAINABLE DEVELOPMENT
Having reiterated the need for biophysically sustainable economic development, and shown
how ecological - and therefore biophysical - stability is linked to bio-diversity, the task now is to
build a biodiversity constraint that connects bio-physical integrity with economic development via
biodiversity conservation. Although there are almost certainly a number of ways to do this, the
particular biodiversity constraint outlined here makes use of the forces of international trade.
The logic of a biodiversity constraint runs as follows. Because economic activities that deplete
biodiversity are likely to destabilise natural systems, and because instability in natural systems is
economically risky given the current scale of economic activity, biodiversity depletion should
carry financial penalties and its conservation should carry financial incentives. In this way,
economic activities that do not destabilise natural systems will be favoured and biophysically
sustainable economies will gradually develop.
The evolution towards biophysical sustainability in regions that are economically poor and
ecologically rich will take place only if the world's economically wealthy regions also develop in
the same direction. This is where international trade would play a vital role; wealthy regions
would probably not make the transition to sustainability on biodiversity conservation alone. The
hypothesis is that the transition to sustainability in economically poor countries would be driven
largely by biodiversity conservation within their borders, while the transition to sustainability in
wealthy countries would be driven largely by a global biodiversity constraint based on
international trade6.
7.1 Economic structure of a biodiversity constraint
To re-emphsise, a biodiversity constraint would not be a policy mechanism. It would be a set of
organising principles - a framework - to make policies for bio-physical sustainability that are
tailored to regional economic and ecological conditions.
The two main elements of the framework are, first, that trade in ecologically sustainable goods
(those whose production and delivery does not deplete biodiversty) would be free of import and
export tariffs, and second, that trade in ecologically unsustainable goods would be penalised to
6 The impetus for biodiversity conservation in poor countries might come from the global biodiversity constraint itself or from internal efforts, or from a combination of the two.
14
gradually eliminate these goods from the economy over a period of decades. It is the second
component that would serve most as a guiding principle for specific policies, be they based on
command-and-control mechanisms or on market mechanisms.
In principle, formulating a policy mechanism to conserve biodiversity would be comparatively
straightforward. Consider a market-based policy. The task is to make the extraction of a given
species, population or genetic resource increas-ingly uneconomic as that resource becomes
depleted. Roughgarden and Smith (1995) show that, for fisheries, a tax on the market price of
landings that increases as the size of the fish stock decreases will protect the stock from
overharvest. All that is required is to know the size of the stock at any time, the size of the
harvest at that time, and the tax rate that conserves the minimum viable stock size plus a buffer
against natural fluctuations. This kind of policy is equally applicable to the harvesting of other
natural resources, like timber or medicinal plants, as to the harvesting of fish. It would apply
even to the conversion of land from its natural state to human use. If such a conversion were to
push a population or species below its minimum viable size, then the tax on earnings from that
land should be so high as to make the conversion uneconomic. Note that it is necessary to link
the economic instrument to the population sizes of species, not to the number of species in the
system, in order for the policy mechanism to work.
The important feature of policies to implement a biodiversity constraint is that the policy
mechanisms relate the costs of using ecological resources to the state of those resources. As
Daly and Goodland (1994) correctly point out, the potential increases in environmental damage
caused by deregulated international trade stem from a lack of environmental accountability at
the global level. By contrast, a biodiversity constraint would build environmental accountability
through international trade. In the international arena, a side-effect of such policy mechanisms
might be to bring incomes in poor countries up towards those in wealthy countries. Another
side-effect might be an increased incentive for poor countries to export products whose demand
is elastic. For example, if Papua New Guinea's exports of ebony to California were depleting
stocks of ebony - or even of species that live on ebony trees - then the price per cubic metre of
ebony would be taxed heavily, and Papuan ebony exporters would raise prices to compensate.
But if demand for ebony in California were inelastic, substitutes for ebony would be sought. The
greater the biodiversity in the exporting country, the greater the substitutability among natural
products. Either way, Californians would be paying Papuans amounts much closer to the full
environmental costs for their products, and there would be greater incentives for biodiversity
conservation within Papua New Guinea's boders.
15
Of course, the economic disruption caused by the full and immediate implement-ation of policy
mechanisms like these could potentially be very large. Therefore, a gradual adjustment of
import and export quotas would be needed in order to phase in policy mechanisms for a
biodiversity constraint. In the example, Papua New Guinea and the United States would come
to an agreement to gradually reduce trade in ebony produced unsustainably.
7.2 Legal and institutional underpinnings of a biodiversity constraint
How can countries come to implement policies for a biodiversity constraint? In the case of
fisheries, it may be in fishers' best short-term as well as long-term interests for management to
implement policies for ecological stability, given the probable frequency of stock collapse under
current strategies (Roughgarden and Smith, 1995). But such conditions cannot be expected to
hold globally. Governments in many parts of the world, under pressure from interest groups or
for reasons of 'national sovreignty', provide exactly the types of taxes and subsidies that lead to
ecological disruption (Willis et al., 1988; Southgate, 1994; Mahar and Schneider, 1994).
Although the difficuly of instituting a biodiversity constraint may seem great, the groundwork for
phasing it in has already been laid with the signing of the -albeit non-binding - Biodiversity
Convention at Rio de Janeiro in 1992. Building on this groundwork, binding treaties would be
the next step. These might take place under an umbrella organisation, for example, a General
Agreement on Trade and the Environment (GATE), proposed by DeBellevue at al. (1994) as a
reform to the General Agreement on Tariffs and Trade (GATT). DeBellevue et al.'s (1994)
vision of a GATE would bring environmental experts to the discussion table on international
trade. However, a bolder version of the GATE would be necessary to institute a biodiversity
constraint, laying out a series of steps to bring the economies of participating nations within
biophysical limits by setting targets for the international trade of ever greater percentages of
ecologically sustainable goods and services. There are two important differences between such
a GATE and other agreements like the GATT and the North American Free Trade Agreement.
First, bilateral agreements between countries on trade in specific goods, as in the example
above, would be encouraged. While the GATE would provide overall targets, the process of
forging agree-ments would be decentralised. Second, when bilateral agreement fails, unilateral
action by countries to prevent species loss - for example, restricting trade with other countries in
certain goods - should be legal (see Adger, 1994). Leap-frogged by a GATE, the GATT's
activities would then be limited to cases exter-nal to a biodiversity constraint, such as import
duties on high value added goods
16
Once a treaty for a biodiversity constraint were in place, participating countries would then be
under obligation to develop and implement policies to encourage economic activities that
conserve biodiversity (e.g. by subsidies) and to penalise those that do not. The monitoring and
enforcement of the treaty would be carried out by an independent, international body, and
frameworks might be included in the treaty to assist nations struggling to meet targets. This
latter provision would be designed to guard against environmental imperialism of poor countries
by the rich.
7.3 Challenges and limitations to the operation of a biodiversity constraint
Many considerations have been ignored in this discussion, particularly further requirements for a
biodiversity constraint to work, and limitations to its scope. In particular:-
i. For a biodiversity constraint to work, a fine-grained knowledge and continuous
monitoring of global and regional biodiversity would be necessary. This would present a
sizable and expensive challenge.
ii. Biodiversity loss is often caused by the 'downstream' effects of human activities. For
example, the silting of rivers from logging can cause coral reefs to die. Therefore, policy
mechanisms that link economic development with the state of natural stocks, such as a
stock-dependent tax on market prices, must take account of these downstream effects,
and may require international co-operation.
iii. The biodiversity of some groups, especially micro-organisms, is not easy to measure,
yet these groups may be very diverse (Barns et al., 1994; DeLong et al., 1994) and vital
to maintaining basic ecosystem processes. Although recent improvements have been
dramatic (Barns et al., 1994), techniques for assessing microbial diversity are still in their
early days.
iv. The role of the World Bank might be re-cast to support a biodiversity constraint.
Development loans to be used as investment pools for ecologi-cally sustainable
businesses could be made available to needy countries.
v. Biodiversity loss might be caused directly by such global processes as climate change,
for which responsibility cannot easily be apportioned. For example, the abundances of
17
many amphibian species around the world have dropped sharply in the last ten years,
possibly in response to atmospheric changes (Wake, 1991). In addition, climate change
may cause so-called community dis-location in which species migrate at different rates
in response to changes in mean atmospheric temperature, and their geographical
ranges cease to overlap (Root and Schneider, 1993). Hence, biophysical sustainability
may require economic measures beyond a biodiversity constraint, such as taxes on
resource throughputs in preference to taxes on labour and income (Daly, 1994).
18
8. SUMMARY
Because the global regulation of human economic activity is becoming a necessity, a means of
regulation must be sought. A biodiversity constraint is a strong candidate because:
(i) the balance of ecological evidence indicates that the conservation of biodiversity
conserves ecosystem stability and productivity;
(ii) biodiversity (at least species richness) is a comparatively straightforward ecosystem
characteristic to measure and monitor;
(iii) biodiversity has value in its own right. A biodiversity constraint would, over many
decades, re-mould the economy to avoid breaching biophysical limits.
Command-and-control policies may be feasible for this purpose in some instances but
the overwhelming majority of policies probably will utilise market forces by systems of
incentives and penalties. The employ-ment of a biodiversity constraint would not only
help secure humanity's long-term future but also spawn whole new industies; indeed,
human technical ingenuity may yet bring us such wonders as a biophysically sustainable
automobile.
19
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Appendix: Definitions of Terms
(i) Biodiversity. This term is widely used to describe the total diversity of living organisms.
Hammer et al. (1993) identify four independent divisions of 'biodiversity': species
diversity, genetic diversity, functional diversity (the range of functions of species in an
ecosystem), and spatiotemporal diversity (topography, climate, etc.). Odum (1983,
Table 18.1) lists a wide array of diversity indices. Ehrlich and Daily (1993) identify
population diversity as an alternative to species diversity in the measurement and
conservation of biodiversity. Although the essence of the argument presented in this
paper would be the same for all the above definitions of biodiversity, the policy
prescriptions depend to some extent on the definition and therefore biodiversity is taken
to mean species diversity because it is usually the easiest to measure in the field.
It is important to distinguish between diversity within an ecosystem and diversity among
ecosystems. If diversity is linked to stability, then by the latter meaning one would
expect boreal ecosystems - such as arctic tundras - to be less stable than tropical
rainforests. If there are stability differences among types of ecosystems, then it is
valuable from the point of view of sustainable development to know why, but the reason
may not necessarily have anything to do with their component diversity, however
measured. In this paper I concentrate on the relationship between diversity within an
ecosystem and its stability.
(ii) Ecosystem. An ecosystem is a biological community or set of communities plus its
abiotic environment. These are the two necessary conditions for defining an ecosystem.
They are supplemented by the following sufficient conditions. Like the individual
organisms that form ecological communities, ecosystems are self-maintaining and
self-regulating. These properties arise because of feedback flows of energy and
nutrients within, and between, systems. These feedback flows maintain ecosystems far
from thermodynamic equilibrium, and buffer them against perturbations. In a
thermodynamic sense, ecosystems are orderly. In addition, ecosystems are
thermodynamically open, receiving free energy from the sun or from geothermal activity.
But this external orderliness belies their internal complexity, because the feedback flows
that operate within ecosystems give rise to non-linear dynamics - bounded chaos - in the
interactions of their components, such as among populations (e.g. Hanski et al., 1993).
24
Ascribing geographical boundaries to ecosystems is difficult and, in many cases,
inappropriate. Ecosystems may be nested within each other, for example, freshwater
ponds within a prairie. Some regions of the world, such as the open ocean, contain
communities of organisms and exchange energy and matter with the abiotic
environment, and are therefore ecosystems, but they have no clear boundaries. Thus,
what constitutes a given ecosystem is often definitional.
Ecosystem processes are processes that emerge from the interaction of the biological
and physical entities comprising an ecosystem. These processes include nutrient and
energy flows, succession, species turnover by immigration and emigration (b-diversity),
speciation and species extinction. There are also certain static characteristics of
ecosystems that can be measured: these include numbers of entities per unit area
(richness) and richness weighted by entity abundance (a-diversity). The enormous
internal complexity of ecosystems has led to attempts to describe their organisation in
intelligible ways, perhaps most successfully as nested hierarchies in time and space
(e.g. Odum, 1983; Urban et al., 1987; O'Neill, 1989; Holling, 1992).
(iii) Stability. Stability is the tendency for a system to return to its original state. Local
stability (or Lyapunov stability) is the tendency for all system components to return to
their steady state equilibrium values following small perturbations (DeAngelis et al.,
1989). A large perturbation may therefore push a system into the domain of attraction of
another steady state, if such a state exists (Lewontin, 1969; Holling, 1973). This kind of
stability is - perhaps misleadingly - referred to as global stability. The parameters used
to describe stability vary from study to study: they may be population sizes, nutrient
flows, connectivity of mathematical networks, but in all cases stability is taken to mean
low variance in parameter values, and instability is characterised by high variance.
Stability is commonly viewed as comprising two parts: resistance and resilience.
Resistance is the tendency for the parameter values describing a system to remain
within the same bounds under a perturbation, and resilience is the speed with which a
system returns to its original state following a perturbation. Much of the empirical work
on ecosystem stability has focused on observing the resilience of a system following a
measurable perturbation.
Finally, the hierarchical view of ecosystems accentuates the role of spatial and temporal
scale in considering stability. For example, a 'stable' ecosystem might contain
numerous unstable populations over a given time-frame. Nutrient flows in one part of an
25
ecosystem may be unstable on a given timescale but those through the whole system
may nevertheless be stable. Therefore, it is usually informative to define the
spatiotemporal context when discussing ecosystem stability.
(iv) Sustainability. Like biodiversity, this term takes many meanings. Here, biophysical
sustainability is used and this is, in essence, defined by the biodiversity constraint itself.
An economic activity is biophysically sustainable if it does not damage ecosystems by
disrupting nutrient flows and/or depleting biodiversity.