Use of system dynamics modelling in design of an environmental restoration banking institution

Abstract

This paper describes a system dynamics model developed to inform design of a proposed environmental restoration banking system. The purpose of the proposed system is to facilitate restoration of extensive areas of mangrove forests that have been cleared or damaged in large part by expansion of the commercial shrimp farming industry. A case study is developed for mangrove restoration in Thailand; however, the model is seen as applicable to a number of countries which have experienced severe mangrove loss. The scheme is based on environmental mitigation banking principles, in which users of an environmental resource are required to purchase from a mitigation bank credits representing restorations undertaken to compensate for environmental damage, thereby achieving “no net loss” of the environmental asset. The scheme proposed in this paper differs from usual mitigation banking practise in that the objective is to restore large degraded areas over and above present rates of consumption. Model simulations show that the restoration banking system may be effective in restoring coastal mangroves and in rehabilitating the coastal shrimp farming industry that is dependent on environmental services provided by the mangrove stock.