Economics of Ecological Restoration

Abstract

Ecological restoration is a complex activity that requires integrating biophysical, social, and economic factors. It requires the engagement of various stakeholders with potentially competing interests and goals. Economists have developed methods to elicit peoples’ values and preferences related to restoration. These economic tools provide information that allows decision makers to better understand how to best allocate scarce resources among alternative restoration projects and activities. The field of restoration economics can be traced back to the 1970s, but it did not gain popularity until the late 2000s. A review of the literature indicates that only about 6% of academic papers on ecological restoration have used economic tools and instruments. Economic tools and instruments can be applied at five stages of a restoration project: (a) understanding the causes and processes of degradation, (b) setting restoration targets and policies, (c) project planning and prioritization, (d) project implementation, and (e) ex-post assessment and evaluation of restoration outcomes. Generally speaking, economic tools and analysis are not extensively applied in all five stages of a restoration project, which potentially limits the effectiveness of investment. Several strategies can be applied to strengthen restoration science and practices, which include the incorporation of economic analysis into the planning of ecological restoration projects, reducing the cost of economic data collection and analysis, addressing social values, establishing links between the causes of degradation and restoration outcomes, understanding of the alignment of incentives and motives, and assessment of large-scale and long-term impacts of restoration projects.