Environmental and Resource Economics

, Volume 48, Issue 2, pp 219–242 | Cite as

The Impact of Land-Use Change on Ecosystem Services, Biodiversity and Returns to Landowners: A Case Study in the State of Minnesota

  • Stephen PolaskyEmail author
  • Erik Nelson
  • Derric Pennington
  • Kris A. Johnson


Land-use change has a significant impact on the world’s ecosystems. Changes in the extent and composition of forests, grasslands, wetlands and other ecosystems have large impacts on the provision of ecosystem services, biodiversity conservation and returns to landowners. While the change in private returns to landowners due to land-use change can often be measured, changes in the supply and value of ecosystem services and the provision of biodiversity conservation have been harder to quantify. In this paper we use a spatially explicit integrated modeling tool (InVEST) to quantify the changes in ecosystem services, habitat for biodiversity, and returns to landowners from land-use change in Minnesota from 1992 to 2001. We evaluate the impact of actual land-use change and a suite of alternative land-use change scenarios. We find a lack of concordance in the ranking of baseline and alternative land-use scenarios in terms of generation of private returns to landowners and net social benefits (private returns plus ecosystem service value). Returns to landowners are highest in a scenario with large-scale agricultural expansion. This scenario, however, generated the lowest net social benefits across all scenarios considered because of large losses in stored carbon and negative impacts on water quality. Further, this scenario resulted in the largest decline in habitat quality for general terrestrial biodiversity and forest songbirds. Our results illustrate the importance of taking ecosystem services into account in land-use and land-management decision-making and linking such decisions to incentives that accurately reflect social returns.


Ecosystem services Biodiversity Land use Private returns to landowners Net social benefits Tradeoffs 


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Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  • Stephen Polasky
    • 1
    Email author
  • Erik Nelson
    • 2
    • 3
  • Derric Pennington
    • 1
  • Kris A. Johnson
    • 1
  1. 1.Department of Applied Economics/Department of Ecology, Evolution and BehaviorUniversity of MinnesotaSt. PaulUSA
  2. 2.Natural Capital Project, Woods Institute for the EnvironmentStanford UniversityStanfordUSA
  3. 3.Department of EconomicsBowdoin CollegeBrunswickUSA

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