Worldwide, governments subsidize agriculture at the rate of approximately 1 billion dollars per day. This figure rises to about twice that when export and biofuels production subsidies and state financing for dams and river basin engineering are included. These policies guide land use in numerous ways, including growers’ choices of crop and buyers’ demand for commodities. The three types of state subsidies that shape land use and the environment are land settlement programs, price and income supports, and energy and emissions initiatives. Together these subsidies have created perennial surpluses in global stores of cereal grains, cotton, and dairy, with production increases outstripping population growth. Subsidies to land settlement, to crop prices, and to processing and refining of cereals and fiber, therefore, can be shown to have independent and largely deleterious effect on soil fertility, fresh water supplies, biodiversity, and atmospheric carbon.
Brent M. Haddad
Watersheds are physical regions from which all arriving water flows to a single exit point. The shared hydrology means that other biophysical systems are linked, typically with upper-gradient regions influencing lower-gradient ones. This situation frames the challenge of managing economic and other uses of watersheds both in terms of individual activities and their influence on other connected processes and activities. Economics provides concepts and methods that help managers with decision making in the complex physical, biological, and institutional environment of a watershed. Among the important concepts and methods that help characterize watershed processes are externalities, impacts of economic activity that fall upon individuals not party to the activity, and third parties, individuals impacted without consent. Public goods and common pool resources describe categories of things or processes that by their nature are not amenable to regular market transactions. Their regulation requires special consideration and alternative approaches to markets. Benefit-cost analysis and valuation are related methods that provide a means to compare alternative uses of the same system. Each is based on the normative argument that the best use provides the greatest net benefits to society. And intergenerational equity is a value orientation that argues for preservation of watershed processes for the benefit of future generations. The need for effective watershed management methods pushed 20th-century economists to adapt their discipline to the complexity of watersheds, from which emerged subdisciplines of natural resource economics, environmental economics, and ecological economics. The field is still evolving with a growing interest in data gathering through land-based low-cost data collection systems and remote sensing, and in emerging data analysis techniques to improve management decisions.
Maria A. Cunha-e-Sá and Sofia F. Franco
This is an advance summary of a forthcoming article in the Oxford Research Encyclopedia of Environmental Science. Please check back later for the full article.
Economic development, technological change, and urbanization are typically identified as important drivers of land use change. Yet, land use change entails important environmental and socioeconomic consequences, namely by affecting the processes and functions of ecosystems, and, therefore, the provision of their services.
Urbanization comprises residential, commercial, industrial, and highway-related development. At the edge of this built environment is the urban-wildland interface (UWI), which has been the focus of environmental policies in several parts of the world. The reason rests on the fact that urban development at the UWI is linked to significant environmental damages, including air and water pollution, habitat destruction, landscape fragmentation, increased runoff, and wildfire risk, among others. These effects can reduce biological diversity and, furthermore, some of the ecosystem services (ES) can be irreversibly lost.
Though forests located nearby urban areas are a small fraction of the forest cover, a better understanding of the extent to which UWI forest conversion affects local economies and environmental services can help policymakers harmonizing urban development and environmental preservation at the UWI, with positive impact on the welfare of local communities.
The main income from most forest holdings at the UWI depends on wood production. However, forests and forestry practices also contribute to climate change mitigation. Yet, the public good nature of most forest ES distorts the forest market price below its social value. As a result, as development pressure increases, it is expected that interface traditional timber management practices become a transitional use as conversion to other valuable land use, such as residential use, occurs in the future and, the UWI open space is undervalued. This, in turn, raises concern given the current increasing trend of forestland conversion at the UWI.
Moreover, the value of developable land held by a private forest owner derives both from the returns from the current use (timber production) and from the expected returns from future urban uses. Given that the decision to convert is conditional on the relative magnitude and timing of the returns of the two alternative uses, decision-making at the UWI must reflect the factors that influence both, that is, urban (e.g., residential rents and switching costs) and forestry-related factors (e.g., stumpage prices and regeneration costs), when considering the optimal rotation periods and conversion dates. Accounting for the urban influences on UWI forestland practices is thus very important, because a growing population and increasingly land consumptive development patterns will require more effective policies and programs to stem the tide of urban sprawl seen in several municipalities worldwide.
Leslie Richardson and Bruce Peacock
Economics plays an important role not only in the management of national parks in developed countries, but also in demonstrating the contribution of these areas to societal well-being. The beneficial effect of park tourism on jobs and economic activity in communities near these protected areas has at times been a factor in their establishment. These economic impacts continue to be highlighted as a way to demonstrate the benefit and return on investment of national parks to local economies. However, the economic values supported by national parks extend far beyond local economic benefits. Parks provide unique recreation opportunities, health benefits, preservation of wildlife and habitat, and a wide range of ecosystem services that the public assigns an economic value to. In addition, value is derived from the existence of national parks and their preservation for future generations. These nonmarket benefits can be difficult to quantify, but they are essential for understanding and communicating the economic importance of parks. Economic methods used to estimate these values have been refined and tested for nearly seven decades, and they have come a long way in helping to elucidate the extent of the nonmarket benefits of protected areas.
In many developed countries, national parks have regulations and policies that outline a framework for the consideration of economic values in decision-making contexts. For instance, large oil spills in the United States, such as the Exxon Valdez spill of 1989 and the Deepwater Horizon spill of 2010, highlighted the need to better understand public values for affected park resources, leading to the extensive use of nonmarket values in natural resource damage assessments. Of course, rules and enforcement issues vary widely across countries, and the potential for economics to inform the day-to-day operations of national parks is much broader than what is currently outlined in such policies. While economics is only one piece of the puzzle in managing national parks, it provides a valuable tool for evaluating resource tradeoffs and for incorporating public preferences into the decision-making process, leading to greater transparency and assurance that national parks are managed for the benefit of society. Understanding the full extent of the economic benefits supported by national parks helps to further the mission of these protected areas in developed countries.
James B. London
Coastal zone management (CZM) has evolved since the enactment of the U.S. Coastal Zone Management Act of 1972, which was the first comprehensive program of its type. The newer iteration of Integrated Coastal Zone Management (ICZM), as applied to the European Union (2000, 2002), establishes priorities and a comprehensive strategy framework. While coastal management was established in large part to address issues of both development and resource protection in the coastal zone, conditions have changed. Accelerated rates of sea level rise (SLR) as well as continued rapid development along the coasts have increased vulnerability. The article examines changing conditions over time and the role of CZM and ICZM in addressing increased climate related vulnerabilities along the coast.
The article argues that effective adaptation strategies will require a sound information base and an institutional framework that appropriately addresses the risk of development in the coastal zone. The information base has improved through recent advances in technology and geospatial data quality. Critical for decision-makers will be sound information to identify vulnerabilities, formulate options, and assess the viability of a set of adaptation alternatives. The institutional framework must include the political will to act decisively and send the right signals to encourage responsible development patterns. At the same time, as communities are likely to bear higher costs for adaptation, it is important that they are given appropriate tools to effectively weigh alternatives, including the cost avoidance associated with corrective action. Adaptation strategies must be pro-active and anticipatory. Failure to act strategically will be fiscally irresponsible.