Economics of extinction and species conservation

When we think about a species going extinct, invariably our minds jump to over-exploitation, or poaching, environmental destruction and habitat loss, and climate change. Only rarely do we tend to think about the economics of species loss, which is what Iain Fraser, at the University of Kent, has been urging us to do. As he explains to Chris Smith, translating the mechanisms of extinction, conservation and species preservation into economic terms can, he thinks, helps researchers and policymakers to understand why species disappear, and what needs to be done to reverse the losses that we are currently experiencing. “Correctly valuing species within the wider economy,” he says, “is key to reversing many of the pressures that cause their decline”...

Iain - Fundamentally the biggest problem we face as a society is we've got many competing wants and we've got limited resources. And so if we've got to make some hard choices about what we want to spend gas resources on, so every pound we spend on say schools or universities or hospitals, that's a pound we can't spend on something else. And so when it comes to species conservation and basically thinking about species extinction, we have got a limited budget. So we do have to think very carefully about how we allocate the scarce resource in such a way that we try to make the most of what we currently have. Some of the basic economics of species extinction tells you that if we don't set up our institutions and our, if you like, the context in which economic activity is undertaken in, we can very quickly, you know, give individuals, producers an incentive to overharvest. And by overharvesting, say like fish, we can effectively drive a particular species to extinction. So even if we can understand that they're valuable and we would like to keep them, we sometimes just get it very, very wrong.

Chris - It's also not quite straightforward in the sense that you gave an example if a fish is something we want and we take too much of it, we can drive it to extinction. On the other hand, if there's an environment that the fish lives in and we want something from that environment that the fish also wants and we take the thing away from the fish, the fish will also go extinct but not 'cause we want it. So it's more complicated than just supply and demand?

Iain - Yeah, absolutely. So driving something to extinction, you know, is quite difficult. So, you know, there are examples of introduced species. For example, in New Zealand they have lots of possums, which they don't want because they have a detrimental effect on that particular environment. Actually harvesting something to extinction is actually quite a difficult thing to do. So it does tend to be if we however then make a mess of the environment or we reduce the environment that can support these species, that's probably along with our inappropriate management in terms of harvesting that's going to do it. So yeah, the, the things do happen in tandem and very often it's, you know, it is often the loss of, if you like, the appropriate sort of supporting environment that really will be the deep down core reason why we see extinction as opposed to, you know, us really trying to drive something to extinction by inappropriate harvesting.

Chris - And is the the purpose of your argument that if you can arm people who are like policymakers or lobbyists trying to influence policy makers with some tools that will enable them to translate the message, the environmental message, into a financial slash economical message, which is often something that policy makers are going to understand and engage with better?

Iain - To a certain extent, yes. We can try to, if you like place value, I think this is what you are really getting at here on the particular species. The species themselves may have value as we would see it as economists in and of themselves, but also they would have value to us. If we can demonstrate value in the myriad of ways in which we can think about value. 'cause It's, there are, there is values as we see as economists, but there are other groups, other researchers, other academics will view view value in other ways. But if we can demonstrate value and we can make people sort of conscious of that in their decision making, the hope is they make better decisions. It's when typically we really undervalue something or the value of something is not fully appreciated, that we tend to make these, if you like these mistakes in terms of the way you manage species.

Chris - And what about when we go too far? We come to the party too late in our realisation, oh dear, we have gone too far now we're going to try and "de-extinctify" - I don't know if I made a neologism there, but you understand what I'm getting at! We try to reverse what's occurring. Is that something that could be factored in as well? There must be an economic aspect to that?

Iain - Yeah, there is. We do have, you can think about that in terms of, so within the sort of that, the way of thinking about trying to recreate a population or trying to, if you like, sort of widen the gene pool of an existing population of a very small number of particular say animals within a particular species type. They, we will find examples of what you might call translocation. So I've done bits of work with people at the university where we were looking at translocating a bird species onto a second island in the Seychelles because the particular bird species in question was only on one island. And so in an attempt to increase the population to give it more if you like, sort of hopefully more resilience going forward by creating a second population and increasing the numbers, we will hopefully then be able to, if you like, reverse the possibility of extinction occurring. And you can put economics into the analysis of that. You can think about the, the cost of creating the environment. You can think about the cost of actually moving species. You can also think about the risks involved in trying to move species that, you know, you can't just simply pick something up and move it somewhere else and expect it to, you know, necessarily be able to survive.

Chris - And so what's the take home message off the back of having assembled this? What's the message that I should walk away with?

Iain - I think in terms of when we are now thinking about the general interaction economy and environment, we used to very much think that economics viewed the environment as something to be consumed. Whereas clearly really the way we should see it is the economy sits within the broader environment and they are clearly interlinked. And in many ways our sort of inappropriate or misuse of resources and species in general and the reasons why we see things being pushed to extinction is because we've had that almost sort of that consumption perspective on these things that we can just keep taking as if they're manner from heaven. But clearly we have to realise they're interlinked. And I think that's probably the big take home message here, which is, you know, we have to realise that the economy will benefit or we will benefit from having the species and having more species. And at the same time, we as consumers will also benefit from having that sort of underlying biological resilience as well, which is, you know, imperative and important for maintaining the sort of the world of society we want to live in.