Optimal investment in multi-species protection when species interact in an ecosystem

This paper studies optimal investment in multi-species protection when species interact in an ecosystem and there is uncertainty about the exact nature of species interaction. The analysis is based on a model of stochastic species extinction in which survival probabilities are interdependent. Individual species protection plans can increase a species’ survival probability within certain limits and contingent upon the existence or absence of other species. Protection plans are costly and the conservation budget is fixed. It is assumed that human well-being depends solely on the services provided by one particular species, but other species contribute to overall ecosystem functioning and thus influence the first species’ survival probability. One result is that it may be ecologically and economically optimal to invest in conservation plans also for those species that do not directly contribute to human well-being. Another result is that taking species interaction into account may reverse standard results obtained under the assumption of independent species. For example, the rank ordering of spending priorities among different species protection plans may be completely reversed by species interaction. However, with uncertainty about the exact nature of species interaction no clear policy recommendation about optimal investment in multi-species protection plans can be made. One conclusion for environmental policy is that, given the current large uncertainties about the exact functioning of ecosystems, targeting individual species with protection plans lacks an ecological-economic rationale. Rather, whole ecosystems should be the target of environmental protection.