Ernst-August Nuppenau

Towards a genuine exchange value of nature: interactions between humans and nature in a principal–agent-framework

Abstract This paper discusses the potential for modeling nature and man in an exchange economy. We will firstly be outlining the need for exchange values in addition to the usual human evaluation of nature. Secondly, we will be reviewing some basic exchange economy ideas, arguing that these ideas can be adopted to a mutually beneficial exchange between humans and nature. Thirdly, in a formal model, we will show how the assumption that a ‘civic society’ can be adapted to a principal agent approach, whereby humans are the principal and nature is the agent. Issues such as property rights—an objective concerning nature—and services to be exchanged will be introduced. This will include the derivation of a behavioral equation for nature as anticipated by humans. Fourthly, a principal–agent framework delivers a mutually beneficial exchange; such as land for labor, and given property rights. Derived genuine exchange values are interpreted as relative prices reflecting ‘human and natural objectives’. Fifthly, the aforementioned problem will be extended to a world with undefined property rights, and hints will be given to how this world can be modeled. Potential applications, conflicting questions, such as human welfare versus fitness of nature, and the distribution of rights will be discussed.

Integrated modelling of payment for ecosystem services: using willingness to pay and accept, for nature provision and addressing public management in cultural landscape

We model “Payment for Ecosystem Services” as a public management of biodiversity (BD) provision where citizens and land users have only a limited understanding of the ecology. Ecosystem services (ESS) can be nutrient recycling, pollination, pest control, etc. and they are linked to BD which is the focus of management. A typical problem in nature valuation is that, although there might exist an eventual vehicle for payment (land use), the underlying ecology might be very complex. To solve this problem we suggest an approach in which ecosystem management is conducted by ecologists who possess the knowledge of pertinent functional relationships between species prevalence and ESS provision. Farmers are compensated based on priority setting and suitability of land as a specific acquisition. Valuation (of species) is presented as a simulation (of a market-like process), i.e. balancing value revelations, based on shadow prices of providers (farmers), users (citizens) and ecologists. We address conflicts with ecologists as managers, farmers as profit maximizers, and citizens as utility retrievers. It is primarily a conflict between managers who argue ecologically for preferred species and land users who have limited knowledge: the conflict is solved by balancing interests. Our approach calibrates interest functions and it allows for quasi-market coordination and public management.

An overview of Total Factor Productivity estimations adjusted for pollutant outputs:an application to sugarcane farming

The conventional Total Factor Productivity (TFP) measurement does not incorporate the effects of undesirable outputs, which are harmful to the environment. Using sugarcane farming in Kenya, this paper illustrates the differences between the conventional Malmquist index measures where the environment variable is not adjusted and environment-adjusted measures using both hyperbolic and directional distance functions. The mean TFP change estimates for the conventional Malmquist index, adjusted hyperbolic index and Luenberger indicator were 3.13%, 0.11% and 2.21%, respectively. The conventional non-adjusted measure lies between the two adjusted measures of hyperbolic index and Luenberger indicator.

Farmers’ Participation in Informal Groundwater Market in Hard Rock Areas of Peninsular India

This paper has analysed the factors that influence farmers’ participation in the informal groundwater market using the Craggs double hurdle model. For the study, primary data from 171 groundwater farmers belonging to the Eastern Dry Zone of Karnataka were used. The empirical results have shown that agricultural credit and farmers having failed wells positively influence farmers’ probability of water buying. With increasing water cost, the farmers are more likely to purchase or sell water and the quantity of water purchased or sold decreases with the increase in irrigation cost. The well-owners who have drip irrigation and land fragments are more likely to sell water. It has been observed that in the study area farmers purchase water at high prices and hence an effective agricultural water pricing is needed. Another option could be to promote joint investment in irrigation which takes care of credit problems and negative externalities of overdraft, resulting in efficient use of resources.