Disaggregated economic impact analysis incorporating ecological and social trade-offs and techno-institutional context: A case from the Western Ghats of India

Sharachchandra Lele and Veena Srinivasan

Ecological Economics, 2013, vol. 91, issue C, 98-112

Abstract: Economic valuation of ecosystem benefits and their aggregation in a benefit–cost analysis (BCA) framework is the norm in mainstream environmental economics. But valuation and BCA have also attracted criticisms. ‘Internal’ criticisms point to the absence of alternative scenarios in valuation, overlooking of ecological trade-offs and dis-services, and inattention to context. Others criticize aggregation across diverse stakeholders and the problem of non-monetizable benefits, and dismiss BCA as fatally flawed. They suggest approaches such as deliberative decision-making and multi-criteria analysis. We propose a middle path that uses the strengths of economic analysis for decision support while avoiding the pitfalls. We disaggregate economic impacts by stakeholder groups, link ecosystem changes to benefits as well as dis-benefits, and examine how socio-technological context shapes the magnitude of economic impact. We illustrate this approach by studying the impact of creating the Biligiri Rangaswamy Temple wildlife sanctuary in the Western Ghats forests of southern India. Our analysis shows that while some stakeholders are net beneficiaries, others are net losers. Changes in forest rights, irrigation technologies, and ecosystem dynamics influence the magnitude of benefits and sometimes convert gainers into losers. Such disaggregated analysis can provide useful information for deliberative decision-making and important academic insights on how economic value is generated.

Keywords: Ecosystem service valuation; Benefit–cost analysis; Trade-offs; Distributional weights; Institutional context; Tropical forests (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:91:y:2013:i:c:p:98-112

DOI: 10.1016/j.ecolecon.2013.03.023

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