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Modeling the economic tradeoffs between agricultural production and environmental protection in Haean catchment


From 03/2009 to 11/2014

Principal Investigator: John Tenhunen, Mario Larch
Staff: Trung Thanh Nguyen
Grant: IRTG 1565 WP IV TERRECO - Complex Terrain and Ecological Heterogeneity - Evaluating ecosystem services in production versus water yield and water quality in mountainous landscapes

Goal within the TERRECO Assessments:

  • Develop an overall concept for assessing the trade-offs in ecosystem services that occur as described in scenarios of TERRECO with climate and land use change
  • Develop effective indices and tools for communicating the results of TERRECO landscape analyses to managers and stakeholders
  • Estimate economic value for predicted agricultural production and water supply to Lake Soyang


Abstract 2011: This paper examines (1) the cost and environmental efficiency measures, and (2) the cost to be more environmentally friendly of rice farms in Gangwon province of South Korea. The findings indicate that on average rice farms are far away from economic and environment efficiency, and it is not costless for the farms to be environmentally efficient. It is thus recommended that agri-environmental policies should be redesigned to improve cost and environmental performance of rice farms.

Keywords: material balance principle, efficiency, rice, South Korea


project description in detail from proceedings of 2011 TERRECO Science Conference GAP



Abstract 2013: Work at the interface of ecology and economics has inspired a major transformation in the way people think about the environment. Ecosystems are now seen as capital assets to generate a stream of vital life-support services  - ecosystem services (ES). It is well recognized that ES are not generated by ecosystems alone, but social-ecological systems. One of the key challenges of ecosystem service management is determining how to manage multiple ES in a sustainable manner. This is because ES are not independent of each other. Attempts to optimize a single service often lead to reductions or losses of other services. Action to enhance the supply of some ES has led to declines in many other ES. Addressing this challenge requires identifying tradeoffs that exist among ES. Tradeoffs in ES can be managed to either reduce their associated costs to society or enhance landscape functionality and net human well-being. Efficiency is used to assess the performance of tranformation processes. Efficiency assessment can yield several valuable information to policy decision-making. Although the available studies provide valuable insights in all theoretical, methodological and empirical perspectives, limited progress has been made in integrating the efficiency tool in a framework commonly used for the assessment of both environmental and economic performamce in ES management. Our aim is, thus, to fill in this gap with the construction of a conceptual framework illustrating the linkage between environmental and economic efficiency, and showing tradeoffs between the economy and the environment. Our framework is based on three components. First, there are complex interactions between ecological and human systems that require comprehensive understanding of processes, functions, and consequences. Second, optimal supply of an ecosystem service may lead to the loss of another. Third, good policy interventions can promote the efficient use of ecosystem services. Production processes transform inputs into outputs. Outputs are traded in the markets which bring income to the producers and utility to the consumers - the economic gains. The production process also brings externalities. Negative external effects cost the society – the environmental costs. Farmers are supposed to be cost efficient; but the the society is supposed to be environmentally efficient. Our understanding is that tradeoff assessment is an operational tool for a quantitative approach to agricultural and environmental policy analysis. We view that quantifying tradeoffs is an essential ingredient in setting and designing relevant policies for sustainable agriculture. Our framework has been applied for agricultural production and will be applied in forest and water sectors in South Korea. It is obvious that socio-ecological systems are very complex and that a single model cannot be able to capture all componenets of such systems. Our framework presented herein is not aimed to replace but to complement available tools to provide quantitative evidence for decision-making.

Key words: ENVI – ECON framework, ecosystem services, efficiency, economic gains and losses, tradeoffs


Poster January 2013


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