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Earth & Climate Economics & Statistics Plants & Animals

Biodiversity: Some species may always be endangered

Once hunted to near-extermination, the Northern Rocky Mountain gray wolf reached an important milestone recently. With a population estimated at 1,500, the wolf re-established itself in the Yellowstone National Park area, and in March 2008 the U.S. Fish and Wildlife Service removed it from protection under the Endangered Species Act.

Almost immediately, hunters began petitioning the state offices of Idaho, Montana and Wyoming for permits to hunt the wolves, perhaps down to as little as 20 percent of their current numbers in some areas. Such a weighty issue begs the questions: How much hunting is safe for a given species? How many gray wolves can die before the species loses its chance at recovery?

Gray Wolf. Credit: John & Karen Hollingsworth/USFWS

Understanding the market forces that drive these environmental decisions is a vital yet missing piece of public policy on natural resource management, says Santanu Roy, SMU professor of economics in Dedman College and 2007-08 SMU Ford Research Fellow.

An expert in dynamic economic models and microeconomic theory, Roy focuses on the economics of natural resources and the environment.

Central to Roy’s model for managing biological species is a concern about how population size and uncertainty affect the flow of benefits and costs from the harvesting of resources and what it means for conservation and extinction when resources are managed optimally over time.

“The traditional model of biological harvesting usually considers only the market value and benefits of using these resources,” he says. “But there is an increasing consciousness of the value of biodiversity, that a species might be very valuable someday because of the biodiversity it helps provide.”

The traditional view of natural resources in general, and of biological species in particular, is as an investment asset, as something speculators can own or privatize, liquidate or conserve, Roy adds.

“These simple comparisons have to be abandoned,” he says.

As an example, Roy focuses on the critically endangered blue whale. Suppose an individual gained the right to own the entire stock of blue whales in the oceans, he says.

“If the blue whale population were doubling every year, it would be worth conserving from an investment standpoint. But, at present, it is growing at only 2 percent to 5 percent a year,” Roy says. “If you take all the available blue whales now, sell them at market price, put the money in the bank and enjoy the interest for the rest of your’s and your children’s lives, that’s more money than you could make by cultivating whales forever.”

graywolfcredittracybrooksmissionwolf72dpi.jpg
Gray Wolf. Credit: Tracy Brooks/Mission Wolf.

But this approach fails to consider several factors unique to species, he says.

“There are peculiar challenges that come from the biological side of the story,” Roy says. “And these challenges must become part of the equation.”

One is the possibility of what biologists call depensation, if a population becomes too small, it collapses and cannot grow anymore.

“The International Whaling Commission basically stopped all harvesting of blue whales 30 years ago,” he says, “but the population hasn’t recovered. They don’t meet each other to mate that often.”

Another factor in Roy’s model is stock dependence of cost.

“If you take $100 out of your checking account and have a party, the enjoyment you get will not depend upon how much money you have left in the bank,” he says.

Roy%201.jpg“That’s not true for biological species, which become more and more costly to harvest as their populations shrink,” Roy says. This is one reason why species like the blue whale, almost paradoxically, stop losing their numbers once they are near extinction, he adds.

“If you’ve ever gone fishing,” Roy says, “you know that it’s very difficult to fish if there are very few of them.”

Conversely, if a population is large, its harvesting cost becomes small — a condition that took a toll on the American bald eagle in the past century, Roy says. Protections for the bird allowed its population to grow rapidly. The resulting easy harvesting gave hunters an incentive to drive them nearly to extinction.

“When a population increases, at some point it sharply decreases, because it becomes very economical to harvest,” he says. “These are the critical moments at which species can become extinct.”

Roy hopes his research will help steer public policy toward more intelligent management of biological issues, especially regarding extinction, he says. The U.S. government has long held “safe standards,” meaning the point at which a population is greater than a size critical to survival, as its conservation yardstick. But Roy’s work has shown that “some species may never be safe,” he says.

“The thing most lacking in public policy right now is that it doesn’t understand individual cases,” he adds. “We need to take much more of the available scientific information into account. What’s good for one species is not good for another.”

Roy, who joined SMU in 2003, earned his Ph.D. degree from Cornell University. He has published his work in the “Journal of Economic Theory” and other publications. — Kathleen Tibbetts

Related links:
SMU: Economics of extinction
Santanu Roy
USFWS: Gray Wolf news, info and recovery status reports
USFWS Video: Gray Wolvesvideo.jpg
SMU Department of Economics
Dedman College of Humanities and Sciences

Categories
Earth & Climate Economics & Statistics Energy & Matter

Earth’s inner heat holds promise of generating much-needed electric power in Northern Mariana Islands

A chain of 14, breathtaking Pacific islands is paradise lost without reliable electricity.

The Northern Mariana Islands, a U.S. commonwealth some 1,500 miles east of the Philippines, has seen its garment industry waste away in the face of global competition. Attracting replacement industry is difficult, in part because of the commonwealth’s undependable power supply. Rolling blackouts are the norm, caused by aging power plant equipment and the irregular delivery of expensive, imported diesel to run the plants.

SMU’s geothermal energy team of faculty and graduate students is aiming to prevent the Islands’ economic oblivion by helping to convert their volcanic heat into affordable, renewable energy.

James Quick

“This [energy crisis] could be the United States 20 years from now,” says James E. Quick, associate vice president for research and dean of graduate studies at SMU.

Quick knows from his own work in the Marianas what it would mean for residents to cut their dependence on costly diesel fuel. He directed a volcano-monitoring program for the islands during his previous career with the U.S. Geological Survey.

Most recently Quick has served as a liaison for the island government in its search for renewable energy: He introduced Northern Mariana officials to SMU’s recognized experts in geothermal energy: David Blackwell, W.B. Hamilton Professor of Geophysics in Dedman College, and Maria Richards, coordinator of SMU’s Geothermal Lab.

In the Marianas, the SMU team is studying the potential applications for two different types of geo-thermal systems that use Earth-heated water and steam to drive turbines and produce electricity.

David Blackwell

Testing has been completed on volcanic Pagan Island, where the results are being studied to determine if a large, steam-driven power plant like those found in California and Iceland may be a fit.

On Saipan, the most populated island in the Marianas chain, subsurface water temperatures are lower because there is no active volcano. Testing of existing water wells completed in early summer supports the potential for building smaller power plants designed for lower temperatures. Plans call for drilling a test bore hole on Saipan to confirm water temperatures at deeper depths.

Interest in geothermal energy has been growing against a backdrop of rising oil prices.

Google.org is providing nearly $500,000 to SMU’s Geothermal Lab for improved mapping of U.S. geothermal resources. Blackwell, who has been collecting heat flow data for 40 years, is credited with drawing attention to the untapped potential energy source with his Geothermal Map of North America, first published in 2004.

The Google.org investment in updating that map will allow Blackwell to more thoroughly mark locations where potential exists for geothermal development.

Blackwell and Richards are convinced that oilfields may be some of the most overlooked sites for geothermal power production in the United States. SMU’s geothermal team is offering an energy solution that would boost capacity in low-producing oilfields by using the deep shafts drilled for petroleum products to also tap kilowatt-generating hot water and steam.

The process of pumping oil and gas to the surface frequently brings up a large amount of hot wastewater that the industry treats as a nuisance. Install a binary pump at the well head to capture that waste hot water, Blackwell says, and enough geothermal energy can be produced to run the well, mitigating production costs for low-volume wells. It can even make abandoned wells economically feasible again.

Taken a step further, surplus electricity generated from an oilfield full of geothermal pumps could be distributed to outside users at a profit. This kind of double dipping makes sense for short and long-term energy production, Richards says.

“This is an opportunity,” she says, “for the energy industry to think outside the box.” — Kim Cobb

Related links:
SMU geothermal home
SMU Geothermal Lab
SMU geothermal program
Google invests in SMU geothermal research
Google video: Advanced geothermal technologyvideo.jpg
CBN News: Geothermal energy right under our feet
Texas geothermal energy
David Blackwell
James E. Quick
SMU Roy M. Huffington Department of Earth Sciences
Dedman College of Humanities and Sciences

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Economics & Statistics Researcher news

Financial-market research nets Venkataraman cash prize

kvenkataraman.jpgKumar Venkataraman, in SMU’s Cox School of Business, has received an SMU 2008 Ford Research Fellowship.

Venkataraman’s research has influenced important policy debates on the structure of financial markets and has been cited by regulators with the Securities and Exchange Commission in the United States, as well as with the Financial Services Authority in Europe.

He specializes in market microstructure dynamics and applying sophisticated models to large databases of financial variables.

An associate professor in finance, Venkataraman’s work has been featured in industry publications such as “The CFA Digest.” It’s also been published in several books, including “The Handbook of World Stock, Derivatives and Commodities Exchanges.”

Venkataraman has published articles in “The Review of Accounting Studies,” “The Journal of Financial Economics,” and “The Journal of Financial and Quantitative Analysis.” He is an invited member of the National Bureau of Economic Research Working Group on Market Microstructure.

Established in 2002 through a $1 million pledge from Gerald Ford, chair of SMU’s Board of Trustees, the fellowships help the University retain and reward outstanding scholars. Each recipient receives a cash prize for research support during the year. The new Ford Fellows were honored by the SMU Board of Trustees at its May meeting.

Related links:
Kumar Venkataraman
2008 Ford Research Fellows named