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Post-Classical Economics Approach to Ecosystem Management

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Post-Classical Economics Approach to Ecosystem Management A Post-Classical Economics Approach to Ecosystem Management A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University, Te Whare Wānaka o Aoraki By Edward J. S. Hearnshaw Lincoln University 2009 Ecology is a new fusion point for all sciences… The emergence of ecology has placed the economic biologist in a peculiar dilemma: with one hand he points out the accumulated findings of his search for utility, or lack of utility, in this or that species; with the other he lifts the veil from a biota so complex, so conditioned by interwoven co-operations and competitions, that no man can say where utility begins or ends. Aldo Leopold (1939; p. 114) ii Abstract A principal purpose of this thesis is to present an economic evaluation of ecosystems. The concept of ecosystem health is adopted to ascertain the status of ecosystems. Ecosystem health is considered in part an economic concept and defined as a function of utility through the ecosystem services that satisfy various needs, subject to preserving the integrity of the adaptive cycle. In order to quantify the utility supplied by ecosystem services the novel utility index Ecosystem Outcome Protection Year ( ECOPY ) is developed. By forming this index, an evaluation can be performed using cost utility analysis, which avoids monetizing these benefits. An attempt is made to ascertain an appropriate approach for ecosystem management. It is reasoned that expert intuition can determine some kind of macro-regularities in ecosystems despite their complex dynamics. Hence, these inferences could be used for ecosystem management. Adaptive co-management is introduced as a means to bring about the collaboration of experts as resource co-managers. The concept of informed intuition is developed to bring about a systematic approach to learning and evaluation where the mental models of experts are transcribed using fuzzy cognitive mapping. However, it is argued that ecosystems as complex adaptive systems are non-ergodic and full of surprises. Accordingly, abduction, the logic of creative conjecture is systematically developed, for the purposes of maintaining mental model flexibility. This systematic application of abduction with an informed intuition forms the proposed abductive process of research, which is grounded in Shacklean potential surprise, a non-probabilistic function. To demonstrate this novel research process, a post-classical economic evaluation of Te Waihora lake ecosystem is undertaken, which employs the ECOPY index and potential surprise method. This empirical case study reveals various cost-effective management actions for improving lake health, which went beyond the intuitions of resource co-managers. This indicated the potential of the approach, which is considered a significant contribution for the methodological development of ecosystem management. Keywords : abduction, adaptive co-management, complex adaptive systems, cost utility analysis . iii iv Acknowledgements The source of any creative endeavour is certainly not an isolated exercise. And as such, in writing this thesis I am indebted to many wonderful people that have championed me along my often turbulent course. Of these people I would like to pay special thanks to my two academic supervisors Professor Ross Cullen and Professor Ken Hughey for their patience, enthusiasm, guidance and good spirits. Moreover, I would like to thank Reverend Dr Keith Morrison, Professor Paul Dalziel and the supportive administrative staff of the Commerce faculty at Lincoln University. This thesis led me through to evaluating the fascinating lake ecosystem of Te Waihora. In undertaking such an economic evaluation I got to meet many passionate people who have dedicated much of their lives to understanding and being part of the lake. So much for it being dead! These people, whom I warmly thank for their time and knowledge, came from many organizations including the National Institute of Water and Atmospheric Research, Environment Canterbury, the Department of Conservation, Ngāi Tahu, Fish and Game, Landcare Research, Christchurch City Council, Lincoln University, the University of Canterbury, and the Waihora Lake Ellesmere Trust. I also wish to acknowledge the works of the deceased and living economists, philosophers and scientists that provided me with so much inspiration in this thesis. Those of special note include: Buzz Holling and his innate understanding of nature through his depiction of it as an adaptive cycle; Stephen Wolfram through his tireless work in complexity science, which is all captured in his tour de force book A New Kind of Science ; Charles Sanders Peirce, who brought abduction to the world and is surely the most genuine and polymath ever; George Shackle, who ‘surprisingly’ my grandfather lived so close too and once knew as an academic colleague and friend, for opening my eyes to real-world economic evaluations; Bob Costanza for bringing the genuine significance of ecosystems and their health to the attention of economists; Robert Ulanowicz, who has done so much for ecology and in bringing it together as one united field of study; Tony Lawson and his truly progressive and original work in depicting the methodological foundations of economics, and providing an alternative, as found in his marvellous work Economics and Reality ; Paul Thagard, who has seamlessly integrated so many concepts into a coherent framework of psychology; Peter Earl, who has broken formidable ground with his own post-classical economics and who intimately knows my variant of post-classical economics doubly well; and finally, but certainly not least, Gilles Deleuze, who in his work Difference and Repetition awoke me from my epistemological slumbers. On a more personal note, I would like to thank my distinguished friends, Dr Andrew Cook, Pablo Ahumada, Dr Anita Wreford, Dr Abel Alonso, Peter Tait, Matt Ayers, Steve Beville, Graham Stricket, Lori Bradford, Marina Apgar, Dr Mark Wilson and the genial Rhiannon McKenzie-Smit. Finally, I would like to thank my parents and my sister for their support and the hypersonic DJ Divisioness, who has a wicked taste for the drum n bass music... v vi To Hugh vii viii Table of Contents Abstract iii Acknowledgements v Table of Contents ix List of Figures viii List of Tables xi List of Equations xiii List of Appendices xiv Chapter 1: Introduction 1 1.1 Cost Effective Analysis & Cost Utility Analysis 5 1.2 Social Welfarism & Expert Judgement 9 1.3 Ecosystem Health & the ECOPY 12 1.4 Overview & Way Ahead 15 Chapter 2: The Science & Definition of Ecosystem Health 18 2.0 Introduction 18 2.1 Succession & Stability 20 2.1.1 Thermodynamics & Exergy 26 2.1.2 Organization & Ecological Resilience 29 2.2 Self-Organization & Complexity 32 2.2.1 Small-World Networks & Scale-Free Networks 36 2.2.2 Driver Species & Modularity 38 2.2.3 Adaptive Capacity & Functional Redundancy 41 2.2.4 Holling’s Adaptive Cycle & Panarchy 45 2.2.5 Natural Integrity & Ecosystem Restoration 48 2.2.6 Utility & Ecosystem Services 52 2.2.7 Conclusion 60 Chapter 3: A Critique of the Neoclassical Economics Approach to Ecosystem Management 62 3.0 Introduction 62 3.1 Anticipative Management & Expected Utility 63 3.1.1 Empirical Violations & Bounded Rationality 66 3.1.2 Heuristic Rules & As-If Optimization 70 3.2 Adaptive Management & Systematic Learning 72 3.2.1 Bayesian Statistics & Ignorance 76 3.2.2 Active & Passive Adaptive Management 79 3.2.3 Multi-Agent Simulations & Randomness 81 3.2.4 Ecological Network Analysis & Computational Irreducibility 84 3.2.5 Conclusion 87 ix Chapter 4: A Post-Classical Economics Approach to Ecosystem Management 89 4.0 Introduction 89 4.1 Neural Networks & Intuition 92 4.1.1 Emotions & Bivalence 97 4.1.2 Beliefs & Habits 103 4.1.3 Authority & Institutions 106 4.2 Adaptive Co-Management & Consensus 112 4.2.1 Group Mind & Kith-and-Kin Rationality 117 4.2.2 Informed Intuition & Reflexivity 120 4.2.3 Qualitative Induction & Historical Narrative 124 4.2.3 Knowledge Mapping & Artificial Neural Networks 126 4.2.4 Theory Construction & Multiple Theories 129 4.2.5 Theory Selection & Inference to the Best Explanation 131 4.2.6 Experimentability & Defocused Attention 134 4.2.7 Scenario Analysis & Reasonable Expectations 136 4.2.8 Preference Mapping & Choice of Management Action 138 4.2.9 Conclusion 141 Chapter 5: Surprise & Abduction 143 5.0 Introduction 143 5.1 Abduction & Logical Form 146 5.1.1 Surprise & Creative Conjecturing 147 5.2 Genuine Uncertainty & Demi-Macro-Regularities 152 5.2.1 Complex Logic & Genuine Economic Efficiency 156 5.2.2 Potential Surprise & Possibility 161 5.2.3 Abductive Exercises & Imagination 163 5.2.4 Abductive Process of Research & Institutional Flexibility 166 5.2.5 Constructive Co-Management & Ecological Engineering 170 5.2.6 Conclusion 172 Chapter 6: The Knowledge of Te Waihora 174 6.0 Introduction 174 6.1 Te Waihora & Lake Management 176 6.1.1 Eutrophication & Lake State 180 6.2 Boundaries & History 183 6.2.1 Qualitative Aggregation & Fuzzy Cognitive Mapping 187 6.2.2 Static Analysis & Centrality 193 6.2.3 Actual Abduction & Explanatory Coherence by Harmony Optimization 199 6.2.4 Dynamic Analysis & Simulation Activation Outputs 204 6.2.5 Construction & Plausibility of Promoted Theories 211 6.2.6 Ecosystem Network Model & Future Outcomes 214 6.2.7 Imagined Abductions & Theory Resilience 220 6.2.8 Conclusion 225 x Chapter 7: The Choice of Management Action for Te Waihora 226 7.0 Introduction 226 7.1 Preferential Weighting & Utility Scores 229 7.2 Ascendancy & Focusing 234 7.3 Feasible Management Actions & Potential Surprise Mapping 240 7.4 Gambler Preference Mapping & Cost-Effective Management Actions 250 7.5 Comparative Research & Intuitions 256 7.6 Conclusion 258 Chapter 8: Conclusion 260 8.0 Introduction 260 8.1 Methodological Developments & Ecological Rationality 261 8.2 Empirical Application & Findings 266 8.3 Research Limitations & Future Research Opportunities 268 Appendices 277 Glossary 310 References 312 xi List of Figures Figure 1.1 : The discriminatory consequences when an inadequate approach is used for the evaluation of environmental projects.
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