Abstract
A dynamic general equilibrium model is developed for analyzing economy-ecosystem interactions. It includes stock-flow relations of natural resources, species populations and pollution, and it provides a microfoundation of the growth of populations. Humans and (other) species compete for natural resources and (prey) biomass. Resource stocks, pollution and populations determine public ecosystem services which in turn affect all agents in both the ecosystem and the economy. We establish a benchmark market system encompassing Lindahl markets for ecosystem services and emission markets. We also analyze a system where those two types of markets break down (laissez-faire) and propose efficiency restoring policies.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
W. J. Baumol W. E. Oates (1988) The Theory of Environmental Policy EditionNumber2 Cambridge University Press Cambridge, MA
W. Brock A. Xepapadeas (2002) ArticleTitleOptimal Ecosystem Management when Species Compete for Limiting Resources Journal of Environmental Economics and Management 44 189–220 Occurrence Handle10.1006/jeem.2001.1206
Christiaans, T. et al. (2005): “A Micro-level ‘Consumer Approach’ to Species Population Dynamics.” University of Siegen. Discussion paper.
C. W. Clark (1976) Mathematical Bioeconomics: The Optimal Management of Renewable Resources Wiley New York
T. D. Crocker J. Tschirhart (1992) ArticleTitleEcosystems, Externalities and Economies Environmental and Resource Economics 2 551–567
Daily, G. C. et al. (1997): “Ecosystem Services: Benefits Supplied to Human Societies by Natural Ecosystems.” Issues in Ecology 2.
Dasgupta, P., and Heal, G. (1979): Economic Theory and Exhaustible Resources. Cambridge, MA.
D. L. DeAngelis L. J. Gross (1992) Individual-based Models and Approaches in Ecology Chapman & Hall New York
Debreu, G. (1959): Theory of Value. An Axiomatic Analysis of Economic Equilibrium. New York.
Eichner, T., and Pethig, R. (2005): “Efficient Nonanthropocentric Nature Protection.” Social Choice and Welfare (in press).
D. Finnoff J. Tschirhart (2003) ArticleTitleHarvesting in an Eight-species Ecosystem Journal of Environmental Economics and Management 45 589–611 Occurrence Handle10.1016/S0095-0696(02)00025-6
D. Finnoff J. Tschirhart (2003) ArticleTitleProtecting an Endangered Species while Harvesting Its Prey in a General Equilibrium Ecosystem Model Land Economics 79 160–180
B. Hannon (1976) ArticleTitleMarginal Product Pricing in the Ecosystem Journal of Theoretical Biology 56 253–267 Occurrence Handle1271821
R. Herendeen (1991) Do Economic-like Principles Predict Ecosystem Behavior under Changing Resource Constraints? T. Burns M. Higashi (Eds) Theoretical Studies of Ecosystems: The Network Perspective Cambridge University Press New York 261–287
J. Hirshleifer (1977) ArticleTitleEconomics from a Biological Viewpoint Journal of Law and Economics 20 1–52 Occurrence Handle10.1086/466891
Houston, I. A., and McNamara, J. M. (1998): Models of Adaptive Behavior: An Approach Based on State. Cambridge University Press.
M. J. Kremer C. Morcom (2000) ArticleTitleElephants American Economic Review 90 212–234
P. Krusell (2002) ArticleTitleEquilibrium Welfare and Government Policy with Quasi-geometric Discounting Journal of Economic Theory 105 42–72 Occurrence Handle10.1006/jeth.2001.2888
A. J. Lotka (1925) Elements of Physical Biology Williams and Witkins Baltimore, Maryland
K.-G. Mäler (1974) Environmental Economics: A Theoretical Inquiry John Hopkins University Press for Resources for the Future Baltimore
M. Pemberton D. Ulph (2001) ArticleTitleMeasuring Income and Measuring Sustainability Scandinavian Journal of Economics 103 25–40 Occurrence Handle10.1111/1467-9442.00228
C. Perrings (1986) ArticleTitleConservation of Mass and Instability in a Dynamic Economy-environment System Journal of Environmental Economics and Management 3 199–211 Occurrence Handle10.1016/0095-0696(86)90021-5
R. Pethig J. Tschirhart (2001) ArticleTitleMicrofoundations of Population Dynamics Journal of Bioeconomics 3 27–49 Occurrence Handle10.1023/A:1016364903718
A. Razin E. Sadka (1995) Population Economics MIT Press Cambridge, MA
Seierstad, A., and Sydsæter, K. (1987): Optimal Control Theory with Economic Applications. Amsterdam et al: North-Holland.
D. Starrett (1972) ArticleTitleFundamental Non-convexities in the Theory of Externalities Journal of Economic Theory 4 180–199
D. W. Stephens J. R. Krebs (1986) Foraging Theory Princeton University Press Princeton
J. Tschirhart (2000) ArticleTitleGeneral Equilibrium of an Ecosystem Journal of Theoretical Biology 203 13–32 Occurrence Handle10.1006/jtbi.1999.1058 Occurrence Handle10677274
J. Tschirhart (2002) ArticleTitleResource Competition among Plants: From Optimizing to Community Structure Ecological Modelling 148 191–212 Occurrence Handle10.1016/S0304-3800(01)00439-2
J. Tschirhart (2003) ArticleTitleEcological Transfers in Non-human Communities Parallel Economic Markets in a General Equilibrium Ecosystem Model Journal of Bioeconomics 5 193–214 Occurrence Handle10.1023/A:1025867208909
V. Volterra (1926) ArticleTitleFluctuations in the Abundance of a Species Considered Mathematically Nature 118 558–560
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Eichner, T., Pethig, R. Ecosystem and Economy: An Integrated Dynamic General Equilibrium Approach. J Econ 85, 213–249 (2005). https://doi.org/10.1007/s00712-005-0135-9
Received:
Revised:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00712-005-0135-9