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GTAP Resource #6350

"Economic impact of invasive alien species. Linking ecosystem service accounts to general equilibrium models"
by La Notte, Alessandra, Alexandra Marques and Roberto Roson

When something changes in ecosystems and the services they provide, there are impacts in the economic sectors that depend on them. A way to create a direct linkage between ecological system and economic system would be facilitated if data structure and compilation principles of data and tools from both sides were coherent and compatible. The Knowledge Innovation Project on an Integrated system for Natural Capital and ES Accounting (KIP INCA) set up by the European Commission aims to design and implement an integrated accounting system for ecosystems and their services in the EU by applying the System of integrated Environmental and Economic Accounts - Ecosystem Accounts (SEEA EA). In this paper we show how to bridge ES accounts to general equilibrium models to assess economic impacts generated by ES changes. ES accounts are structured to be consistent with SNA that is in turn the source of data for economic modelling and analysis. Thanks to the rigor of the accounting framework, when the benefit of an ES is an SNA product, the linkage is straightforward, as shown here for pollination and the impact of an invasive alien species. It is in fact possible to assess that an increase of an invasive alien species (Asian hornet) with a predation rate of 0.35, will result in a decrease the pollination service to pollinator dependent crops. This ecological shock brings an economic shock in agricultural production. By bridging INCA and GTAP, we are able to estimate: (i) what would have been the gains if the Asian hornet was not there; (ii) which would be the consequences if Asian hornet spreads in all remaining regions of affected countries. To bridge ES accounts with CGE models creates a nexus between the ecosystem flow and the economic behaviour. The existence of this nexus could be an important tool in the hand of analysts helping policy makers to assess the consequences of action (and inaction) when exogenous changes impact ecosystems and their services.

Resource Details (Export Citation) GTAP Keywords
Category: 2021 Conference Paper
Status: Not published
By/In: Presented during the 24th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2021
Version: draft: not to be published
Created: La Notte, A. (4/15/2021)
Updated: La Notte, A. (6/22/2021)
Visits: 926
- Land use
- Trade and the environment
- Food prices and food security

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