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A Study in Ecological Economics

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A Study in Ecological Economics The Process of Forest Conservation in Vanuatu: A Study in Ecological Economics Luca Tacconi December 1995 A Thesis Submitted for the Degree of Doctor of Philosophy at The University of New South Wales I hereby declare that this submission is my own work and that, to the best of my . knowledge and belief, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree or diploma of a university or other institute of higher ·learning, except where due acknowledgment is made in the text of the thesis. Luca Tacconi School of Economics and Management University College The University of New South Wales 22 December 1995 With love to my parents Alfi.o and Leda (Con affetto dedico questa tesi ai miei genitori Alfio e Leda) IV Abstract The objective of this thesis is to develop an ecological economic framework for the assessment and establishment of protected areas (PAs) that are aimed at conserving forests and biodiversity. The framework is intended to be both rigorous and relevant to the decision-making process. Constructivism is adopted as the paradigm guiding the research process of the thesis, after firstly examining also positivist philosophy and 'post-normal' scientific methodology. The tenets of both ecological and environmental economics are then discussed. An expanded model of human behaviour, which includes facets derived from institutional economics and socioeconomics as well as aspects of neoclassical economics, is outlined. The framework is further developed by considering, from a contractarian view point, the implications of intergenerational equity for biodiversity conservation policies. The issues of intragenerational distribution and allocation are then considered. In this regard, cost-benefit analysis (CBA), as applied to the valuation of forests, PAs, and biodiversity, is criticany reviewed. A participatory approach to decision-making, which may also include CBA, is then proposed. The resulting ecological economic framework may be thus summarised: (a) ecosystem use patterns should be chosen on the basis of their sustainability, distributional, and efficiency aspects; (b) systems of PAs should be established in order to achieve minimal intergenerational equity; (c) intragenerational equity requires the correction of the asymmetrical distribution of the costs and benefits arising from the establishment of PAs; (d) the institutional features relevant to the environmental-economic issues being analysed v should be considered; and (e) the decision-making process should be participatory and action oriented. The framework is applied to two case studies in Vanuatu. These applications detail (a) stakeholders' views and trade-offs faced in relation to forest management (b) modes of participatory research and decision-making, (c) forms of compensation that may be adopted in correcting asymmmetrical distributions of the costs and benefits of PAs, and (d) institutional influences on ecosystem use and implications for conservation projects. The institutional arrangements developed for the establishment of the PAs are presented. The application of this ecological economic framework has resulted in the formal establishment of one P A and the identification and assessment of five other PAs. Vl Acknowledgments I gratefully thank my supervisor Associate Professor Jeff Bennett for his comments, for reading several drafts of the chapters and papers, and for extending to me his friendship during the years that we have worked together. My warmest thanks go to Livo Mele, who assisted me for two and half years while I was conducting rese3!Ch in Vanuatu. He shared with me the joys and frustrations of research along with his knowledge of his beautiful country and of his people. It is the support, cooperation, and hospitality of the local rural people of Vanuatu that have enabled this thesis to see the light of the day. In particular, I would like to thank: Andrew Namai, Isaac Utwohor, Chief Tom Kiri, Jerry Taki, and their families in Happy Land village, Erromango; Chief Timothy Nehapi, Gonnel Nehapi and their family in Wiawi village, Malekula. The support and cooperation of the staff of the Department of Forest of Vanuatu, and in particular the Director Am Mathias, is gratefully aclmowledged. Many thanks also go to the President and staff of the MALAMPA Local Government Council. Mr Ernest Bani, Principal Environmental Officer, Environment Unit, and his staff, Mr Ralph Regenvanu, Director, Vanuatu Cultural Centre, and his staff gave their support and encouragement In Port Vila, my friend Steve Wyatt shared his knowledge of forestry issues, thoughts and doubts about conservation and development issues. Patricia Holmes, from the Australian High Commission in Port Vila, provided useful material on land tenure in Vanuatu. Many thanks for their support also go to: Mr Peter Shannon, Australian High Commissioner, and Mrs Lyn Peck, AusAID representative; Mr Hans-Jorge Von Bieler, Resident Adviser, European Union; Mr Brian Smythe, New Zealand High Commissioner, and Mrs Deborah Geels, First Secretary, New Zealand High Commission. vn My co-supervisor, Dr Bob Fisher, has hardly seen me due to geograpliical distance, but he provided extremely useful material at the critical time when the outline of my research approach was getting into focus. I am indebted to many scholars who have taken time to comment on chapters and/or material published from the thesis, or who have discussed research issues with me. Many thanks to: Jerry Ravetz, Silvio Funtowicz, Neil Byron, Mick Common, Chandran Kukathas, Tony Norton, Alan Randall, Clem Tisdell, Dennis Dykstra, Geoffrey Brennan. The comments of anonymous reviewers of different academic journals have also been very useful. Several staff members of the School of Economics and Management provided useful comments during seminars. Dr Robin Pope also took time to comment on drafts of chapters. The support of the School of Economics and Management, of the Head of School, Associate Professor Paul McGavin, and of the secretarial staff is acknowledged. Funding from the Australian Centre for International Agricultural Research (ACIAR), Project No. 9020, 'The socio-economic assessment of native forest preservation proposals in Vanuatu: implications for forest management' enabled me to carry out research without the daily worries of seeking funds for specific research activities, and to be employed full-time while reading for this thesis. David Wood, with his interest in forestry issues and love for Vanuatu, facilitated the establishment of the ACIAR research project. My love and thanks for having tried as best she could to correct my Anglo-Italian lingo go to Nancy Dahl. viii Contents Abstract lV Acknowledgments Vl List of Tables xiv List of Figures XV ListofMaps XV List of Publications from the Thesis XYl Acronyms xvii Part I Introduction 1 Chapter 1 Introduction 2 1.1. Introduction 2 1.2. The policy problem 3 1.3. The context of the thesis 4 1.4. Scope of thesis 6 1.5. Thesis outline 9 Chapter 2 Forests, Biological Diversity and Protected Areas 14 2.1. Introduction 14 2.2. Forests and biodiversity: their functions and status 15 2.2.1. Forests status and functions 15 2.2.2. Ecological aspects of biodiversity 17 2.2.3. The status of biodiversity 19 2.3. Factors contributing to biodiversity loss and deforestation 20 2.4. Underlying causes of deforestation and biodiversity loss 23 2.4.1. Population pressure 23 2.4.2. Poverty and affluence 24 2.4.3. Institutional failure 26 2.4.4. Environmental degradation and the market 28 1X 2.5. Protected areas: functions and problems 30 2.5 .1. The functions of protected areas 30 2.5.2. Problematic issues 33 2.6. Outline of the issues to be considered in the thesis 36 Part II An Ecological Economic Framework 41 Chapter 3 Scientific Methodology for Ecological Economics 42 3.1. Introduction 42 3.2. Positivism and its influence on economics 45 3.2.1. Positivist philosophy 45 3.2.2. The decline of positivism 49 3.2.3. Positivism in economics 51 3.3. Methodology for ecological economics 56 3.3.1. Normal science 56 3.3.2. Ecological economics as a post-normal science 58 3.3.3. Comments on the Funtowicz and Ravetz proposal 62 3.4. An alternative research paradigm 64 3.4.1. Constructivism 64 3.4.2. Action and rigour in the constructivist paradigm 70 3.5. Conclusion 74 Chapter 4 Economic Paradigms and Environmental Decision-Making 76 4.1. Introduction 76 4.2. Ecological economics 78 4.3. Neoclassical economics and the environment 84 4.3.1. Methodological individualism 86 4.3.2. Preferences and the Pareto criteria 87 4.3.3. Utility maximisation 89 4.3.4. Rationality 93 4.4. Implications for the study of environment-economy relationships and the valuation of ecosystems 95 4.4.1. Methodological individualism 95 4.4.2. Preferences 96 4.4.3. Utility and Pareto optimality 97 4.4.4. Rationality 100 X 4.5. Expanding the human behavioural space 102 4.5.1. Behaviour mode 104 4.5.2. Morality 107 4.5.3. Aggregation level 108 4.6. Conclusion: implications for the decision-making framework 109 Chapter 5 Implications of Intergenerational Equity for Biodiversity Conservation Policies 112 5.1. Introduction · 112 5.2. The economics of biodiversity 114 5.2.1. Irreversibility and uncertainty 114 5.2.2. The economic value of biodiversity 116 5.2.3. The precautionary principle 118 5.2.4. The safe minimum standard of conservation 120 5.3. Issues on the concept of natural capital 126 5.3.1. The ecological-social system 126 5.3.2. On the substitu4J.bility between natural capital and manufactured capital 127 5.4. Ethics and intergenerational equity 131 5.4.1. Utilitarian ethics 132 5.4.2. Rawls' theory of justice 133 5.4.3. Some critical issues in intergenerational equity 136 5.5.
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