Environment development linkages: modelling a wetland system for ecological and economic value

Abstract

Modeling the factors determining ecological and economic value gives rise to conceptual and methodological problems. Economic valuation typically focuses on use value in the short run, whether within or outside the market. Ecologists, however, are more concerned with ecological values, which provide an underlying long-run notion of value interpreted in a more general sense. This paper investigates the nature of the link between these two aspects of value in the context of a wetland in Northern India, which is also designated as a Ramsar site and a national park. A dynamic simulation model in a ‘STELLA’ environment is set up to understand the linkages between underlying ecological relationships and economic value emerging from them. The simulations point towards a critical dependence of economic value (direct and indirect income derived from the park) on ecological health indices. A non-linearity is to be seen in the impact of an increase in ecological health indices on tourist traffic. This responsive or elasticity with respect to ecological health is more at higher values of the indices, indicating thereby that once efforts at conservation increase the attractiveness of the park above a certain level, the impact may be cumulative and returns in terms of income may rise more than proportionately.