4) Impactsb) Economic

Pimentel, Zuniga and Morrison. 2005. Update on the environmental and economic costs associated with alien-invasive species in the United States  ECOLOGICAL ECONOMICS 52 (3): 273-288

(just read plant-related sections)

4) Impactsb) Economic

Pimentel, Zuniga and Morrison. 2005. Update on the environmental and economic costs associated with alien-invasive species in the United States  ECOLOGICAL ECONOMICS 52 (3): 273-288

introduced crops and animals provide 98% US food, $800 billion value per year

Some species have harmed agriculture, forestry, other economic segments, and environment.

Estimated 25,000 non-indigenous plants in US; 5000 have escaped to natural systems

What are the causes of economic loss due to invasives?

4) Impactsb) Economic

How many aliens?

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

4) Impactsb) Economic

i) Total damage estimates: annual. From Pimentel et al. (2000)• United States

Economic impacts from losses/damage

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impacts from losses/damage and from costs to control

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impacts from losses/damage and from costs to control. Sum to get total.

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impactsFocus only on plants

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impactsFocus only on plants

For example: Aquatic weeds

Mark W. Skinner @ USDA-NRCS PLANTS Database

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impactsFocus only on plants

For example: Crop weeds

Patrick J. Alexander @ USDA-NRCS PLANTS Database

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impactsFocus only on plants

For example: Lawns, gardens, golf courses

Patrick J. Alexander @ USDA-NRCS PLANTS Database

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2000)• United States

Economic impactsFocus only on plants: Total ~$34 billion annually

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20

• United States• Global

Losses/damage only from plants: $34 billion for US

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20

• United States• Global

Losses/damage only from plants: $34 billion for US, but India is even more

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20

• United States• Global

Losses/damage only from plants: $34 billion for US, but India is even more, and Brazil not far behind

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20

• United States• Global

Losses/damage only from plants: Total ~$95 billion (42% of total losses from all organisms)

4) Impactsb) Economic

i) Total damage estimates: From Pimentel et al. (2001) Ag Ecosys Environ 84:1-20

• United States• Global

Losses/damage only from plants: Total ~$95 billion (42% of total losses from all organisms)

But only a small fraction of other environmental losses or control costs and environmental costs hard to estimate

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness analyses• aka: Ex post (after the fact) analysis• Assesses damage from invasives vs. cost of various

methods to control them

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses• Damage from invasives vs. cost to control them• Focus generally is on minimizing the cost of controlling to

a certain level of damage – in other words, what is the least cost method to control an invasion that has already occurred

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses• Damage from invasives vs. cost to control them• Minimize control cost to a certain level of damage – least cost

method to control• Doesn’t quantify economic benefits of control. Assumes

that the benefits will exceed the least cost method to control

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses• Minimize control cost to a certain level of damage – least cost

method to control• Assumes: benefits > least cost method to control

(2) Ex ante (before the fact) analyses

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses• Minimize control cost to a certain level of damage – least cost

method to control• Assumes: benefits > least cost method to control

(2) Ex ante analyses• Cost – benefit analysis: what are costs to prevent invasion

vs. costs if invasion occurs. Maximizes the cost-benefit ratio.

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses• Minimize control cost to a certain level of damage – least cost

method to control• Assumes: benefits > least cost method to control

(2) Ex ante analyses• Cost – benefit analysis• 2-step process:

(a) Understand how invasion affects different species, ecosystem services, and economic activities

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses• Minimize control cost to a certain level of damage – least cost

method to control• Assumes: benefits > least cost method to control

(2) Ex ante analyses• Cost – benefit analysis• 2-step process:

(a) Understand how invasion affects different species, ecosystem services, and economic activities

(b) Assess the monetary value of all these: “valuation”

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values

Consumptive = monetary worth of specific, market-based goods & services

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values

Consumptive = monetary worth of specific, market-based goods & servicesOften easy to analyze

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values

Consumptive = monetary worth of specific, market-based goods & servicesOften easy to analyzeBut need to include both private (financial) and social

(economic) prices

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values

Consumptive = monetary worth of specific, market-based goods & servicesOften easy to analyzeBut need to include both private (financial) and social

(economic) pricesNon-consumptive = monetary worth of non-market goods & services (for example, tourism, recreational activities, etc.)

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values

Consumptive = monetary worth of specific, market-based goods & servicesOften easy to analyzeBut need to include both private (financial) and social

(economic) pricesNon-consumptive = monetary worth of non-market goods &

services (for example, tourism, recreational activities, etc.)More difficult to analyze; usually entail indirect

approaches such as “travel cost” or “survey” methods

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values

Value of ecosystem services

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values

Value of ecosystem servicesEven more difficult to assess

“Replacement” costs: cost to replace the services provided by the intact ecosystem.

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values

Value of ecosystem servicesEven more difficult to assess

“Replacement” costs: cost to replace the services provided by the intact ecosystem.

e.g. cost of water treatment if wetlands lost

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values

Value of ecosystem servicesEven more difficult to assess

“Replacement” costsOR

“Opportunity” costs

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values

Value of ecosystem servicesEven more difficult to assess

“Replacement” costsOR

“Opportunity” costs: cost of lost opportunities or resources.

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values

Value of ecosystem servicesEven more difficult to assess

“Replacement” costsOR

“Opportunity” costs: cost of lost opportunities or resources.e.g. 260-570 million gallons of water lost to Tamarisk

transpiration in southern CA

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

“Existence” value : how to assess?

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

“Existence” value : how to assess?‘Willingness to pay’ e.g. how much would you pay in tax to

preserve wilderness areas even if you didn’t visit them for recreation?

“preservation” value: how much might it benefit you in future?

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the future

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the futureTypically set at the after-tax interest rate

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the futureTypically set at the after-tax interest rate

For industrialized countries, typically 1-4% (2-3% commonly used in US)

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

Discount rate: preference for having $$ now versus having the same amount (adjusted for inflation) in the futureTypically set at the after-tax interest rate

For industrialized countries, typically 1-4% (2-3% commonly used in US)

For developing countries with rapid economic growth and high rates of returns on investments, can be up to 10%

4) Impactsb) Economic

ii) Methodology(1) Cost effectiveness (ex post) analyses – least cost method to

control(2) Ex ante analyses – Cost-benefit analysis3 major components of valuation• Direct-use values: Consumptive & Non-consumptive• Indirect-use values• Non-use values

4) Impactsb) Economic

Case study: Tamarix (saltcedar): Zavaleta 2002• Relatively complete and detailed economic analysis

Incorporates direct-use & indirect-use (but not non-use) values

4) Impactsb) Economic

Case study: Tamarix• Introduced in mid-late 1800’s• Originally encouraged and subsidized by governments for

windbreaks, erosion control & stream bank stabilization, ornamentals

• Now widespread & dominant invader on much of the riparian areas of western US

4) Impactsb) Economic

Case study: Tamarix• Introduced in mid-late 1800’s• Originally encouraged and subsidized by governments for

windbreaks, erosion control & stream bank stabilization, ornamentals• Now widespread & dominant invader on much of the riparian areas

of western US• Because of widespread distribution and dominance, likely to

very expensive to eradicate

4) Impactsb) Economic

Case study: Tamarix• Introduced in mid-late 1800’s• Originally encouraged and subsidized by governments for

windbreaks, erosion control & stream bank stabilization, ornamentals• Now widespread & dominant invader on much of the riparian areas

of western US• Because of widespread distribution and dominance, likely to

very expensive to eradicate

Will the economic benefits justify the costs?

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Economic analyses done by:• Zavaleta (2000) Ambio 29:462-467• Zavaleta (2000) in Mooney & Hobbs

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Economic analyses done by:• Zavaleta (2000) Ambio 29:462-467• Zavaleta (2000) in Mooney & Hobbs

Assumptions:• Discount rate = 0% (overestimates the benefits)

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Economic analyses done by:• Zavaleta (2000) Ambio 29:462-467• Zavaleta (2000) in Mooney & Hobbs

Assumptions:• Discount rate = 0% (overestimates the benefits)• Costs are computed over a 20-year period to:

(1) Evaluate sites(2) Eradicate Tamarix(3) Revegetate and monitor effectiveness

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Economic analyses done by:• Zavaleta (2000) Ambio 29:462-467• Zavaleta (2000) in Mooney & Hobbs

Assumptions:• Discount rate = 0% (overestimates the benefits)• Costs are computed over a 20-year period to:

(1) Evaluate sites(2) Eradicate Tamarix(3) Revegetate and monitor effectiveness

• Benefits of removing Tamarix and restoring natives are computed over a 55-year period

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #1 – aerial extent of Tamarix

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #1 – aerial extent of Tamarix. 2 estimates of acreage infested:• Conservative estimate: Based on surveys and observed minimal

rates of spread – 1.16 million acres

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #1 – aerial extent of Tamarix. 2 estimates of acreage infested:• Conservative estimate: Based on surveys and observed minimal

rates of spread – 1.16 million acres• Bold estimate: Based on very detailed information for the Lower

Colorado River, extrapolated throughout the known distribution – 1.61 million acres

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #2 – Because Tamarix invades riparian areas, key to economic

damage in arid West is water

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #2 – Because Tamarix invades riparian areas, key to economic

damage in arid West is water• Estimated water loss from Tamarix vs. natives

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #2 – Because Tamarix invades riparian areas, key to economic

damage in arid West is water• Estimated water loss from Tamarix vs. natives• All studies say Tamarix > natives, but the amount greater varies

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #2 – Because Tamarix invades riparian areas, key to economic

damage in arid West is water• Estimated water loss from Tamarix vs. natives• All studies say Tamarix > natives, but the amount greater varies

2 estimates:(1) Mean of all studies: Tamarix uses 1.5 a.f. per year more than

native vegetation – Bold estimate

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #2 – Because Tamarix invades riparian areas, key to economic

damage in arid West is water• Estimated water loss from Tamarix vs. natives• All studies say Tamarix > natives, but the amount greater varies

2 estimates:(1) Bold estimate: Tamarix uses 1.5 a.f. per year more(2) Conservative estimate: 1.0 a.f. per year

4) Impactsb) Economic

Case study: Tamarix – Will economic benefits justify costs?Step #2 – Because Tamarix invades riparian areas, key to economic

damage in arid West is water• Estimated water loss from Tamarix vs. natives• All studies say Tamarix > natives, but the amount greater varies

2 estimates:(1) Bold estimate: Tamarix uses 1.5 a.f. per year more(2) Conservative estimate: 1.0 a.f. per year

• Then simple math to estimate annual greater water loss due to Tamarix