(579d) Assessing Risks Due to Loss of Natural Capital: The Case of Pollination Services

Several recent events in the U.S. have highlighted the criticality and vulnerability of systems to sudden shocks such as natural disasters and deliberate attacks. Proper understanding of such disruptive scenarios and their impact using holistic and integrated systems modeling techniques is crucial for effective resource allocation and disaster management. Attempts to study the economic-environmental impact of sudden shocks or disruptive scenarios pose both methodological and empirical challenges for engineers and policy makers alike. This is because of the complexity and the highly interconnected nature of the industrial-ecological networks and the associated systems. Such complex systems are observed to have high efficiency, performance, and robustness, but are often fragile and vulnerable to unanticipated perturbations. Proper understanding of such disruptive scenarios and their impact is pivotal for guiding design of complex systems and their long-term sustainability.

The present work focuses on exploring the utility of Input-Output (IO) models for studying the effect of sudden shocks and quantifying the associated risks to complex industrial systems [1]. We are using the IO model to understand the impact of changes in the availability of natural resources including natural capital. This includes understanding the potential impact of loss of services such as pollination, water scarcities, and soil fertility or loss of certain key resources such as fossil fuels. Such information is used to determine sectors that are likely to face maximum risk due to sudden disruptions. Since the EIO model is based on empirically available data and considers a static and linear state of the economy, it is not able to simulate long-term effects of such disruptions. However, it is appropriate for gaining insight into the short-term effects of disruptions before any adaptation due to market forces or policies. Such simulation is relevant to understanding the effect of environmental changes as well as human-induced changes such as terrorism and natural disasters.

We illustrate the utility of our framework by studying the effect of loss of pollination services attributable to managed honeybees on the various industrial sectors. Natural systems provide a number of ecosystem goods and services to mankind. One such ecosystem service is the pollination provided by wild insects and managed honeybees. We restrict our focus to the critical ecological pollination service provided by domesticated or managed honeybees thus excluding the role of wild insects. Concerns have been expressed over the disappearance of 50-90 percent of the honeybee colonies across the U.S. as a result of the colony collapse disorder. Honeybees are responsible for pollinating more than 14 billion worth of crops in the United States [2]. There have been several attempts to quantify the direct economic value of pollination services provided by wild insects and honeybees. However, no studies exist in the literature to the best of our knowledge that try to study and quantify the effect of the loss of critical pollination services on complex industrial systems in a systematic manner. This is the first comprehensive attempt to quantify the direct and indirect effects of the loss of pollination services provided by domesticated honeybees on the complex industrial systems using an IO model. Besides quantifying the economic impact, the methodology can identify industrial sectors with greatest sensitivity under a given perturbation. It is observed that sectors that suffer the highest economic loss under agiven perturbation are not always the ones with the highest production degradation. In addition, the IO model is also able to identify sectors experiencing the inoperability and the economic losses as a result of mostly the indirect effect of the perturbation. The IO model is also attractive in this case as it is based on readily available empirical data for a specified time period and can simulate the short term effect of shocks before any adaptation due to market forces or policies. The implications of the results for guiding conservation policies will also be discussed.

References

1. R. E. Miller and P. D. Blair. Input-Output analysis. Foundations and extensions. Prentice-Hall, Inc., Englewood Cliffs, New Jersey, 1985.
2. M.E. Watanabe. Pollination worries rise as honey bees decline. Science, 265(5176):1170–1170, 1994.