Economic Activity and the Resilience of Ecological Systems: Complexity, Nonlinearities and Uncertainty in Economic-Ecological Modelling

This thesis presents an ecological economics analysis of how limited information about natural systems affects the way we address environmental protection. Selected topics from the literature on decision making under uncertainty and from the theories of dynamical systems and complexity are applied to the study of joint systems composed of an economy and its supporting environment. Insights from these literatures are used to develop three models of ecological-economic systems subject to perturbations that threaten their stability and resilience. The first model studies the impact of depletion and pollution in a stylised renewable resource system. It is shown that, under general assumptions, increasing stress through harvest or pollution causes the rate at which ecosystems recover after a disturbance to decrease. Moreover, increasing stress induces a decrease in the resilience of the natural system. The effects of pollution on the resilience of an economically exploited natural resource are shown to depend on the form of the environmental damage function. A second model studies the relationship between the two most widely usedde denitions of resilience - recovery times and stability domain. This is done by developing a stochastic model that gives an analytically appropriate treatment to the problem of accumulation of successive disturbances. The conditions are identified that determine which of the two standard indicators is the most appropriate in given specific contexts, namely the presence of continuous, persistent disturbances versus unexpected discrete shocks. A third model considers a few among the implications of a resilience approach for policy and management. A re-formulation of Hotelling's efficiency condition is offered, adapted to the exploitation of renewable resources which are valued also for their role in protecting ecosystems' stability and resilience. In the presence of uncertainty and costly enforcement of property rights the above effciency rule does not guarantee ecological sustainability. An approach is outlined for incorporating ecological thresholds in a dynamic stochastic economic control problem. Safe Minimum Standards are considered as a possible way of imposing regulatory barriers on processes that threaten the resilience of the system. Some general properties of the regulation policy are shown to depend on whether control costs are strictly convex,, linear, or have a substantial set-up component.