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Sustainability 2011, 3(11), 2229-2267; doi:10.3390/su3112229
Article

Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary

1,*  and 2
Received: 24 July 2011 / Revised: 24 September 2011 / Accepted: 8 November 2011 / Published: 17 November 2011
(This article belongs to the Special Issue Environmental and Resource Economics)
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Abstract

Valuing ecosystem services with microeconomic underpinnings presents challenges because these services typically constitute nonmarket values and contribute to human welfare indirectly through a series of ecological pathways that are dynamic, nonlinear, and difficult to quantify and link to appropriate economic spatial and temporal scales. This paper develops and demonstrates a method to value a portion of ecosystem services when a commercial fishery is dependent on the quality of estuarine habitat. Using a lumped-parameter, dynamic open access bioeconomic model that is spatially explicit and includes predator-prey interactions, this paper quantifies part of the value of improved ecosystem function in the Neuse River Estuary when nutrient pollution is reduced. Specifically, it traces the effects of nitrogen loading on the North Carolina commercial blue crab fishery by modeling the response of primary production and the subsequent impact on hypoxia (low dissolved oxygen). Hypoxia, in turn, affects blue crabs and their preferred prey. The discounted present value fishery rent increase from a 30% reduction in nitrogen loadings in the Neuse is $2.56 million, though this welfare estimate is fairly sensitive to some parameter values. Surprisingly, this number is not sensitive to initial conditions.
Keywords: nutrient pollution; hypoxia; bioeconomics; ecosystem services; predator-prey; open access; habitat-dependent fishery nutrient pollution; hypoxia; bioeconomics; ecosystem services; predator-prey; open access; habitat-dependent fishery
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Smith, M.D.; Crowder, L.B. Valuing Ecosystem Services with Fishery Rents: A Lumped-Parameter Approach to Hypoxia in the Neuse River Estuary. Sustainability 2011, 3, 2229-2267.

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