Deck 13: Storable, Renewable Resources: Forests

Question 1

Consider the issues raised by the debate over Equador's proposal to preserve the Yasuni National Park from oil extraction. What is your view? Is this simply another payment for ecosystem services or was this extortion? Is this case different from some of the other payment for services cases described above? If so, how is it different?

Answer 1

The National park has huge oil reserves and has a diverse ecology and the government is facing a dilemma of choosing one of them. Quite obvious is the fact that this is a choice of economy and environment. The government decided to avoid exploration of oil reserves if only the world community was able to collect and pay $6 billion over a 13-year period.
This amount is not the external cost imposed on the environment but the foregone cost that could have resulted if the explorations were chosen over the preservation of the parkland. This came to many experts and scholars as a measure of extortion. There was a threat that if this was not done, the government would begin the oil exploration. In that way, it would not be held responsible for the destruction caused. The fact that the initiative was failed in collecting the stipulated amount, itself suggests makes the case of extortion strong enough.

Question 2

Consider the issues raised by the debate over using ecotourism to promote sustainability. What is your view? Is ecotourism always a pathway to sustainability? Never a pathway to sustainability? or Sometimes a pathway to sustainability? Does your view suggest an appropriate role for government in managing ecotourism or should the entire process be left to the private sector? Why?

Answer 2

Ecotourism rectifies certain biases against the preserved land by generating an income stream from that land. However, if the number of visitors are increased and there is no apposite supervision, it can affect the integrity of ecosystem as well as local cultures. Take the case of the EA reserve where tourism was considered a threat to the habitat of 200 species of plants.
A visitor fee system was initiated that restricts the number of visitors as well as generate funds for the efforts made in the direction of mitigating the threat. Skepticism has led many scholars raise questions about the system. The fact that attraction of fees has encouraged the government to build hotels, airline carriers, imported goods just to popularise the ecotourism as a whole. This has degraded the quality of the environment.
Some factors that lay outside the domain of the local government include fluctuations in the exchange rate, climate conditions and political or social upheaval. These factors only enfeeble the case for visitor fee system and make the growth path unsustainable. Leaving the case for private sector would cause a disaster.

Question 3

approach to protecting ecosystem services involves dedicating specific habitat to wildlife (such as parks or reserves), a strategy that prohibits residential development in those areas. Other strategies (wetlands and conservation banking) accommodate residential development at a specific site, while attempting to offset the adverse effects on that site with requirements for preservation activities at other sites as a condition of allowing development at the original site. In your mind does one of these strategies always dominate the other? Is so, why? If not, does the context matter? How would an economist think about these questions?

Answer 3

The context definitely matters. Dedicating a specific habitat to wildlife implies there can be no construction, residential or commercial, developed in those areas. This depends largely on the kind of species found in the ecosystem, the state of the economy, the cost and benefits associated with such proposals and the policy incentives.
Many a times, government is not willing to sacrifice economic growth for ecology. In that case, proper incentives should be provided. This is done to compensate for the adverse effects of the residential sites. This method helps in developing the site for residential investments. It will depend on the number of endangered species, political willingness and popular support.