Article
Measuring the Bioeconomic Impacts of Prolonged Drought on a Lake Ecosystem: The Case of the Great Salt Lake, Utah
Natural Resource Modeling
(2020)
Abstract
We present a general-equilibrium (GE) bioeconomic model of Utah’s Great Salt Lake (GSL) ecosystem
that tightly links the lake’s ecosystem with its regional economy and attendant international trading
partners, thereby enabling full identification of dynamic feedback effects in the presence of prolonged
drought. The drought modeled here mimics a drying climate’s impact on the lake’s nutrient pool. We
demonstrate how prolonged drought affects key bioeconomic variables over time, and how the GSL
bioeconomy recovers toward a new steady state. We also consider how two separate fishery-specific regulatory
tools – a temporary harvest moratorium and ad valorum tax on the fishery’s factors of production
– alter the bioeconomy’s recovery path. Our main finding is that a fishery-specific regulation can induce
perverse social welfare effects in a general equilibrium context by inducing a shift of resources out of the
fishery and into a sector of the economy that produces a negative externality, in our case pollution from
the mining industry. These welfare effects are appraised with two different measures of equivalent variation
– one based on an initial benchmark period, the other on expenditure differences that roll through
time. Our model further demonstrates how these perverse welfare effects can be mitigated by imposing
either an output or input tax on the mining industry.
Keywords
- Species net energy,
- biomass demand and supply,
- regional economy,
- Great Salt Lake
Disciplines
Publication Date
Winter February 15, 2020
Citation Information
Arthur J Caplan and Dong-Hun Go. "Measuring the Bioeconomic Impacts of Prolonged Drought on a Lake Ecosystem: The Case of the Great Salt Lake, Utah" Natural Resource Modeling (2020) Available at: http://works.bepress.com/arthur_caplan/132/