The Economics of Social Ecological Systems

Elinor Ostrom’s article, “A General Framework for Analyzing Sustainability of Social-Ecological Systems” is very successful in its attempt to connect human behavior and human interaction regarding the usage of ecosystem resources. Right off the bat, it was shrewd of Ostrom to label the ecosystem as an SES, or social-ecological system. I noticed that many of her ideas paralleled the rudimentary theories found in macroeconomics.

When Ostrom first mentions the idea of government intervention, she parallels the idea of the “invisible hand” that is often required in capitalism to regulate the economy and prevent a crash in the market. Similarly, Ostrom notes that the same principles should be applied to SES’s and political influence should be used to ensure the abundance of resources in the environment. This is particularly true when Ostrom describes the application in larger and smaller ecosystems. Her ideas can very well be applied to the estuaries surrounding New York City, however, they would prove to be futile if attempted on the Atlantic Ocean. Simply speaking, it is easier to collaborate in a smaller geographic zone because there is less bureaucracy and it is more efficient to bring together those in the region. In the oil business, the OPEC countries collaborate on oil production and price to maximize their benefit. They are a smaller group of oil producers, in a close proximity, who are able to maximize their resource. However, this same practice would be futile in the fashion industry where there are hundreds of thousands of companies around the world.

As I read this paper my interpretation of it gradually progressed from an environmental science paper to an economics paper. This may have due to my personal interest in markets or because Ostrom may have been striving for her audience to perceive it that way. The ideas set forth in this paper are valuable to the influencers in the estuaries surrounding New York City and can make use of them to bring change in the area.

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Letting The Common Man Learn To Manage The Commons

What strikes me as most impressive in Ostrom’s paper is her dedication to making her point understood by all – which is also the basis of why she’s arguing in favor of a more complexly defined framework for social-ecological systems. Ostrom writes: “Without a framework to organize relevant variables identified in theories and empirical research, isolated knowledge acquired from studies of diverse resource systems in different countries by biophysical and social scientists is not likely to cumulate.” The intent is clear: lots of data and research can be done by lots of different types of scientific communities, but unless all that information is placed in an immensely detailed, overarching framework, it’s just going to cause a mass of confusion.

The framework is also important in its simplifying of terms so that even people without a background in ecology, economics, social science, etc., can comprehend it. This part is key – because it allows business owners, farmers, and other self-interested groups to actually grasp the research findings the framework asks for. This is all summed up in her questioning of “What will interested parties be willing to do to avoid a tragedy of the commons?” It’s a whole lot easier for those parties to come up with responses when they’re better able to understand the research they’ve been presented with. 

Though Ostrom’s framework may appear messy and chaotic – what with there being seven settings, ten second-level variables, and endless outcomes – each one is very easily and clearly defined. Olstrom has provided us with a rudimentary formula, all we need to do is plug in the numbers.

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Organization is Key

Elinor Ostrom was the only woman to win the Nobel Memorial Prize in Economic Science, which is a remarkable accomplishment. Her prize winning work examined how people can manage common resources, such as forests and fisheries, through collaboration and organization without government involvement.

In the article, Ostrom’s general framework is used to identify 10 subsystem variables that affect the likelihood of self-organization in efforts to achieve a sustainable SES. It helps predict how communities will behave in relation to natural resource management. This is important because the world is facing major reductions in biodiversity and a significant loss of natural resources.

Ostrom argues against the theory in the Tragedy of the Commons, which is that people will not self-organize to protect natural resources and there is a need for government regulation. This framework organizes SESs, which are composed of multiple subsystems and internal variables within the subsystems. It helps people acknowledge each system’s unique complexity, which helps users understand how the system protect or exploit the natural resources.

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Elinor Ostrom: Nobel Legacy

In 2009, an American political economist Elinor Ostrom became the first woman to ever win a Nobel Prize in her category to date. Her winning presentation revealed her organization and care associated with economic governance and the social interactions with common people such as fisherman and farmers. She examined on how people worked and asked them anthropologic questions of their behaviors. She studied the management of natural resources and nature’s environments and habitats with the support and partnership alongside government and outside organizations to help her studies. Her work emphasized on the play of public choice on decisions influencing the production of goods and services and that evolved into her recent study of how human beings interact with the eco-systems to maintain long-term sustainability for both the environment and the people themselves.

In Ostrom’s presentation, she explains that societies develop diverse and various ways to manage natural resources and environments by avoiding the imbalance of the ecosystem which in some cases the obstacles are scarcity of resources and her work presents the idea of human interaction with the ecosystem to solve for long-term sustainability. Her general idea is identifying ten subsystem variables impacting the likely possibility to achieve sustainability within an environment with predictions of human being interactions and behaviors towards ecosystems as they harvest or work.

Why is this important?

Everyday there is an increase of higher demand for natural resources and less supply of resources available. With long-sustainability resolutions, human beings can work to maintain a growing amount of natural resources and healthy ecosystems to maintain natural life.

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elinor ostrom + ownership

Let me preface this post by saying that my knowledge of economics is limited at best. Indeed, I am putting off taking ECO1001 until the last possible moment. I do, however, know a fair amount about motivation. And that’s what this paper — as well as Elinor Ostrom’s Nobel Memorial Prize acceptance speech — is about.

Ostrom begins by breaking down the components of the basic social-ecological model, or SES: resource systems, resource units, users, and governance systems. She asserts that every SES is complex and unique, so restoration or preservation efforts must be tailored to fit each SES; there is no easy, universally applicable fix. This is where public policy often falls short.

Ostrom then goes on to argue that if users are properly motivated, they can maintain equilibrium within any given SES — without government intervention.

The tragedy of the commons is an important ecological concept that assumes that all users will act in their own self-interest. Based on Ostrom’s research, this is not at all true. Users are willing and able to take ownership of their actions, but user behavior depends on whether or not valid motivational factors are present. For example, if an SES  is predictable (meaning that it has followed certain patterns in the past and will likely follow those same patterns well into the future) then users are more likely to turn to management. The predictability of system dynamics is an important factor because:

1. It highlights the fact that the users themselves are in control and,

2. It does not underestimate the users’ capacity to understand the situation at hand.

Another factor to consider is prior knowledge of the SES in question. If users are conscious of the way their own actions affect the resource system, resource units, and even each other, then they will organize in pursuit of management. In other words, communication is key.

Ostrom insists that “simple blueprint policies do not work.” In order to create a successful rules regarding SES management, governing forces must do their research beforehand. No two systems are exactly alike, but for whatever reason, the policies always imply the opposite.

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Presentation tips and tricks

Find this Prezi here:

With special thanks to ITFs Jenny Kijowski,  Ben Miller, and Jesse Goldstein for sharing their materials.

All images are “free to use or share”  found using an advanced Google Image search.

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Complexity vs. Chaos

One very interesting point raised in this essay and in Ostrom’s nobel prize speech is that complexity does not connote chaos. Rather, complexity is necessarily a component of a successful system. When I heard that in her speech, I did not fully understand what Ostrom was referring to, but her analogy in this essay greatly clarified the concept for me. She compares a social-ecological system to a human body, with all of the interacting variables equally contributing to the equilibrium of the system.

A human body needs so many different components to interact for a person to stay healthy. Each hormone and enzyme has to be in the right place at the right time, every neuron must be fired with precision.

The ten subsystem variables delineated in this paper are the components needed to keep the body running smoothly. Each component has its own seperable value, but the outcomes are derived from their interactions.

Whenever an author tries hard to clarify a subject in terms that I can appreciate, I am grateful.

The ideas in this paper are extremely relevent and important. It is so important that the consume population is allowed the opportunity to influence change. There is of course a risk in giving the public the control, but it may be the best way to implement policy, as opposed to allowing the government full control.

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Spreading the Discussion on Biodiversity

A piece primarily focused on summarizing the common results of two decades of research, the Cardinale paper concisely relays some of the effects that losing biodiversity have on the environment, leading to the reduction/great change accelerations of ecosystem functions and services. Having over 600 experiments conducted to support the validity of the claims, Cardinale lists (and also acknowledges some uncertainties within) six “consensus statements” and four “emerging trends” that effects our views of the significance of biodiversity. He made it simple to comprehend the six consensus statements in that each is summarized in one to two sentences as a paragraph of its own. Some of the effects mentioned that biodiversity have on ecosystems are that with the loss of biodiversity, the functions and services of an ecosystem will be reduced; with greater biodiversity, however, it could increase the stability of ecosystem communities. Understanding these more specific effects makes it easier to transition into the four emerging trends which explores the serious impact of losing biodiversity in the world and how difficult it would be to restore it.

It only seem natural then that economics and policy changes are put into context of environmental science or the field of biology in order to raise awareness of the serious consequences that losing biodiversity will have, especially when there’s a considerable large gap between science and policy making. The Cardinale review is layout in such a way that promotes the general public to understanding what the science community has been doing as an effort to bring attention to the greater issue at hand. There wasn’t a conclusion in which a specific method(s) is discussed about how to end the loss of biodiversity, but by spreading the word, Cardinale and the science community certainly hopes that one day, there will be one.

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Biodiversity Loss and Its Impact on Human Activity

This article by Cardinale is titled “Biodiversity loss and its impact on humanity,” but he provides substantial evidence of the effect of humanity on biodiversity loss. As biodiversity decreases, the efficiency, stability, functionality follows, caused by negative human interaction with the environment. Cardinale’s article reflects the importance of biodiversity and its deleterious potential by providing a strong basis of facts: history, six consensus statements, emerging trends, and weaknesses.

Biodiversity, for the most part, is beneficial to an ecosystem. The main reason being that the more organisms that you have in a functioning ecosystem doing similar tasks, the niches are more defined and the removal of such organisms is able to be overlooked. When biodiversity deteriorates, like it is now, the impact of the removal of an organism looms larger and larger.

Cardinale points out that time is of the essence in educating the public and studying in specific the true impact of biodiversity in our world. Cardinale admits that we are far from learning the complete value of biodiversity, such as the connection between BEF and BES research, which is essential to carry out the goal of educating the public and policymakers.


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Biodiversity Loss: What You Need To Know

In an interesting opening, Cardinale et. al makes clear that “the vast majority of the world’s nations declared that human actions were dismantling the Earth’s ecosystems, eliminating genes, species and biological traits at an alarming rate.” Similar to Antilla’s perspective on climate change, Cardinale states that activities by humans are indeed contributing to the Earth’s degradation in several ways. Moreover, he argues that the real question we should be asking is not whether or not humans are indeed changing ecosystems, but “how such loss of biological diversity will alter the functioning of ecosystems and their ability to provide society with the goods and services needed to prosper” (59).

Biodiversity loss influences/alters the function of ecosystems and can impact the services provided by these ecosystems for our societies. Understanding this, many research projects were devoted to analyzing this phenomenon from the 1980s and primarily flourished in the past two decades. This research was, of course, met with controversy, but it played a crucial role in revealing  “six consensus statements” regarding the affect of biodiversity loss on ecosystem functions. I have paraphrased them below as follows:

  1. Loss of biodiversity makes ecological communities less efficient in performing ecosystem functions, such as “captur[ing] biologically essential resources.]
  2. Biodiversity contributes to the stability of an ecosystem (60).
  3. Greater biodiversity loss has a type of magnifying affect on the entire ecosystem; it is “nonlinear and saturating.”
  4. The diversity of a community affects its productivity to a large degree.
  5. “Loss of diversity across trophic levels” can have a greater impact on ecosystem functions than “loss within trophic levels.”
  6. Functional traits lost because of a loss in biodiversity can lead to serious consequences, namely extinction, and further greatly alter ecosystem functioning.

While each consensus statement has its critics, the main point of Cardinale and his peers is that biodiversity loss is not a passive process in ecosystems. This change has far-reaching affects on the structure and function of ecosystems.

However, as also made clear in the reading, much of this is very difficult to statistically or numerically quantify in order to get “true” answers to the difficult questions being asked. It is argued though that an emerging trend indicates, “diversity loss may have as quantitatively significant an impact on ecosystem functions as other global change stressors (for example, climate change)” (61). On another note, as demonstrated in one of the experiments, “39% of experiments in crop production systems reported that plant species diversity led to greater yield of the desired crop species, whereas 61% reported reduced yield” (62).

The point is that we cannot know for sure the degree to which changes in diversity will occur, as in how serious these changes will be, but there is no question that they affect our ecosystems and the services we receive from/rely on.

The question from this point on becomes, then, how are we to successfully and fairly implement policy measures that do not hinder us as consumers while adequately protecting biodiversity and our ecosystems without precisely knowing all the facts? The authors tell us to take “caution against making sweeping statements that biodiversity always brings benefits to society,” especially since many of these experiments, if not all, were done on significantly smaller scales than that of our ecosystem (63).

There remains much work to be done in order to make this research more reliable, accurate, and quantifiable, but it did a successful job in exposing the serious environmental issues taking place.

Where do you think further research regarding the “fundamental ecological processes that link biodiversity, ecosystem functions and services” should be headed and will we ever be able to bring all this knowledge together to take the correct steps in dealing with diversity loss (66)?

If you are interested, then take a quick look here at what the World Wildlife Foundation has to say about the impact of biodiversity loss and how it quantifies the value of our ecosystem services here!

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