In this lecture on topics in environmental economics, Dr. Jim Boyd presents a summary of how the economic concept of returns on investment can be applied to analyzing conservation activities and outcomes. He starts off by noting that the return of interest is the social value of whatever is being conserved, which can be valued simply based on its existence or can be given a monetary value based on the service it provides in the human system. He notes that there are ecological characteristics of a system that much be incorporated into the assessment of potential investments to make and expect returns on those investments. He also highlights the need to think about the spatial implications of conservation efforts and the potential for externalities or leakage across space, and applies the concept of opportunity cost to help balance trade-offs with limited resources for investment.
Boyd, J., Epanchin-Niell, R. and Siikamäki, J. 2015. Conservation Planning: A Review of Return on Investment Analysis. Review of Environmental Economics and Policy, 9(1): 23–42.
Jim Boyd is a Senior Fellow at Resources for the Future (RFF) in Washington, DC and director of RFF’s Center for the Management of Ecological Wealth. He is also the director of social science and policy at the National Socio-Environmental Synthesis Center (SESYNC) in Annapolis Maryland. He received his PhD in applied microeconomics from the Wharton School, University of Pennsylvania and his BA in history from the University of Michigan. Dr. Boyd has been a visiting professor at Stanford University and Washington University in St Louis. An economist by training, his work focuses on the measurement and management of ecological wealth, goods, and services. As a policy analyst, Boyd emphasizes the need to better coordinate economic and ecological research to improve the practical performance of environmental policies, markets, and investments.