ASH CLOUD
ASH CLOUD
Wolves reduce vehicle deer collisions with Nick Parker Hoover Institution
Economics, markets, and policy all have significant impacts on human behavior and decision making. Nick Parker is an environmental economics professor at the University of Wisconsin-Madison and the Hoover Institution who has been studying the human interaction with wolves, and especially the indirect effects wolves have on environments they live, to examine if it was possible for wolves to actually benefit humans and reduce threats to human lives and property. He found that the reintroduction of wolves into Wisconsin and other US States led to a 25% decrease in deer vehicle collisions. The research suggests that two thirds of this reduction is due to how wolves change deer behaviour rather than just eating deer. The wolves prefer to travel along strait corridors such as roads, creeks, and railway lines leading to fewer deer in the vicinity of roads. The benefits from wolves was found to be 63 to one when the costs associated with human mortality, injuries, and damage to vehicles was compared to the compensation payments the state was making to ranchers for livestock predation.
However, the impact of wolves and deer populations on communities is actually far more complex than just vehicle collisions and predation of livestock. Deer also eat farmers crops, damage gardens, and damage timber, and they can spread Lyme disease. So deer vehicle collisions are only one aspect of the damages caused by over abundance of deer. Wolves also help control subservient predators like coyotes and foxes and and compete with mountain lions and bear. In the US the number one cause of livestock damage is from coyotes. Large deer populations can also provide economic benefits through hunting. All these indirect effects also feeds into the cost benefit analysis question.
Economics is a powerful tool for optimizing natural resource use and it is possible to set up a system where those who benefit compensate those who bear the cost.
“Is it possible to set up a system that those who benefit compensate those who bear the cost. Because, as an economist, I think that's the that's the gold standard for determining the optimal level of any natural resource use that's both the asset and a liability. Like wildlife is the asset and a liability. Some people want more, some people want less. Those who want more should pay for it, and those who bear the cost should be compensated in some way.”
The big challenge is that policy frequently focuses on the direct effects with little consideration of the indirect effects. Nick Parkers’s study on impact of wolves on deer vehicle collisions shows that for policies to be effective the whole system needs to be understood as the secondary, and tertiary effects and how these can be more important than the primary effect.
“If you want long term resource conservation and sustainability, we need policies that cause users of those resources to treat them like they're the owner. Now we might not want to convey ownership, and might not be practical or politically feasible, or even socially desirable, for individuals and groups to own every natural resource. But if we have have policies that encourage them to act as if they own it, then the incentives are going to be lined for long term.”
You can listen to my conversation with Nick parker here.
Nick Parker is the Ilene and Morton Harris Senior Fellow (adjunct) and the Hoover Institution and the Anderson-Bascom Professor of Applied Economics at the University of Wisconsin-Madison.
Welcome to the At Cloud. I'm At Sweeping. Economics, markets, and policy all have significant impacts on human behaviour and decision making. Our guest today, Nick Parker, has been studying the human interaction with wolves and especially the indirect effects to examine if it was possible for wolves to actually benefit humans and reduce threats to human lives and property in modern times.
SPEAKER_01:And where wolves colonized these counties, we saw a 25% reduction in deer vehicle collisions. And we think two-thirds of that is due to wolves changing deer behavior rather than just eating deer. So then we took that, we took, you know, well, what's the implied value of that reduction in deer vehicle collisions, you know, due to lower probability of premature mortality of humans, which economists can put a statistical value to that. It's controversial, but we do. And, you know, what's the value of the property, the vehicle that uh was damaged? Uh you know, add all that up, compare it to the verified losses um uh due uh for for ranch owners in Wisconsin due to um predation, direct predation from wolves, and that's a 63 to one uh number. So the the benefits from wolves via the reduction in deer vehicle collisions is 63 times greater than the compensation payments the state was making.
Ash Sweeting:Failure for policy to address the indirect effects has real opportunity costs.
SPEAKER_01:Policy focuses on the direct effects, and the the big economic impacts could be the indirect effects. So you you mentioned this research in Yellowstone about the cascading effects of uh of having an apex predator in the system, and so it funnels indirectly through the whole ecological system. Some of those secondary third effects are more important ecologically, perhaps, than the primary effect.
Ash Sweeting:How large is the D vehicle collision problem?
SPEAKER_01:There's almost two million collisions annually between vehicles and deer. Um, lots of uh deer vehicle collisions in Canada, um, some in Europe as well. Uh, but these result in 200, about 200 fatalities per year, 30,000 um human injuries. And and so these these, you know, one risk of overabundant deer populations is you you might hit one with your car. You know, when I talk about this topic, sometimes I'll be in a room of people, certainly in the Midwest or the Northeast part of the US, and I'll say, raise your hand if you've if you've been in a vehicle accident with a deer. You know, half the people raise their hand. And I said, raise your hand if a friend or a relative has been in an accident with a deer. Everybody, everybody in the room raises their hand, but they're so common.
Ash Sweeting:There are broader impacts.
SPEAKER_01:And they also eat um farmers' crops, significant damage to timber. Um, uh, they impact household landscaping, so they get into gardens. They're potentially involved in the spread of Lyme disease, which can be fatal, um, very problematic. So deer vehicle collisions are one aspect of the damages caused by overabundance of ungulates like deer.
Ash Sweeting:How do deer and wolves interact?
SPEAKER_01:Theoretically, they could influence it through two channels. Um, one is is pretty obvious, is that they prey on deer, so they can reduce their populations, they can reduce the number of deer and hence reduce the probability that they'll just be deer around near roadways. Or the second is more interesting, and and at least in in our in our particular study, we find likely more important. But if you add wolves into a landscape um that they previously weren't part of, that can really change the the behavior of deer, um, certainly in the short run, but maybe in the long run as well. In the short run, um, deer could change their um uh mobility patterns, they could share, uh, change where they where they congregate. Um, specifically, wolves could push them further away from roads. And so because deer are learning that the predators in the landscape, they're afraid of the predator, they want to avoid contact with it, they stay away. Um, where wolves have been radio collared, there's evidence that they prefer to travel along linear corridors like roads, creeks, riverbeds, because this can minimize their um calorie use. And so wolves could reduce deer vehicle collisions or elk vehicle collisions just by changing their behavior.
Ash Sweeting:Once again, the impact Sabroda.
SPEAKER_01:The other thing an apex predator like a wolf does is it controls um subservient predators like coyotes and fox and felines, so like bobcats and mountain lions. Doesn't necessarily control bear or mountain lions, but you know, wolves compete with them and they can push them out of certain areas. And so uh the number one cause of livestock damage in the U.S. is from coyotes.
Ash Sweeting:The potential beneficiaries are also more complex.
SPEAKER_01:One of the direct effects of large ungulate populations economically is it it can be a local stimulus through through hunting. And so you have these different I think this feeds into your cost-benefit analysis question. I mean, you have these different beneficiaries of uh large ungulate populations.
Ash Sweeting:Economics is a powerful tool for optimizing natural resource use.
SPEAKER_01:Is it at all possible to set up a system that those who benefit compensate those who bear the cost? Because, you know, in you know, as an economist, I think that's the that's the gold standard for determining the optimal level of any natural resource use that's both the asset and a liability, like wildlife is an asset and a liability. Some people want more, some people want less. Those who want more uh, you know, should pay for it, and those who bear the cost should be compensated in some way. Patience and persistence is vital. Hank Fisher worked for Defenders of Wildlife, advocate of wolf reintroduction. And he would go to these meetings with ranchers, and the ranchers would say things like, Hank, I can't believe anybody hadn't killed you yet, you know, because that's how unpopular he was. But he he he kind of worked both sides of the table and he got um the environmental group, the defenders of wildlife, to raise money to pay ranchers for their for their losses. And so, you know, this was back in 1995, and now compensation payments are really common. They're they they exist in France, uh, where wolves have spread, they exist in Spain.
Ash Sweeting:Economic opportunities continue to evolve.
SPEAKER_01:We're gonna pay them um not only if they lose an animal due to predation, but just if they're hosting animals, and that kind of takes you to a next level of economic contracting, where I'm like, that's a pretty sophisticated contract. Um, you know, where I'm, you know, and then it starts to change the incentives of the landowner. Like, oh, now this now this animal's uh more of an asset than a liability. And I'm recognizing that people value it, they're putting money where their mouth is, they're not just forcing it down my throat.
Ash Sweeting:As does behavior.
SPEAKER_01:Maybe at the margin I install a more friendly wildlife fence that allows them to, you know, uh elk to move more freely. Um, because I I actually wouldn't mind them on my property. I'm not trying to keep them out. And maybe I uh dedicate a little bit more of my land to wildlife habitat.
Ash Sweeting:And so you the implications of government policy should not be underestimated.
SPEAKER_01:If you want long-term resource conservation and sustainability, we need policies that cause users of those resources to treat them like they're the owner. Now we we we might not want to convey ownership, it might not be practical or politically feasible or even socially desirable for individuals and groups to own uh uh every natural resource, but if they have power if we have policies that encourage them to act as if they own it, then the incentives are going to be aligned for long-term conservation.
Ash Sweeting:And so water policy is a major driver of IV use.
SPEAKER_01:The governance of water and policies governing water that do not create strong incentives for long-run conservation, they don't um uh they don't mimic ownership arrangements, they don't allow the user to think of the resource as if they owned it and hence a long-run asset to to try to preserve over time. One issue is there's often use it or lose it laws to waters for surface and groundwater. This is common across the world. So, you know, if you don't use the water, you lose your rights. So this is like the rule of capture.
Ash Sweeting:Nick, thank you very much for joining me today.
SPEAKER_01:It's great to be here.
Ash Sweeting:At the end of the day, it's humans that make decisions on food sustainability. So our behavior and the impact that economics, markets, and policy has on our behavior is critical. You've been studying the human interaction with wolves and the direct and the indirect effects of that and how that affects uh behavior. Uh, could you outline what you've learned through those studies?
SPEAKER_01:Yes, uh, so wolves have obvious direct effects uh on uh on people, on uh human health potentially, they pose a risk because they're apex predators. Um, but they've also have direct effects on human property. So um, since the beginning, uh big predators like lions, tigers, bears, and wolves, of course, um, were a threat to uh humans and the property they obtained. So in the earliest times, a human hunter could obtain uh a prey species and have the carcass. And of course, their ownership of the carcass was threatened by a big predator who could be in the neighborhood. Um, over the years, uh, as humans developed livestock operations, as we domesticated um animals for rearing them, um, predators have remained a threat to the property of humans and uh and would and would often uh historically kill uh animals that people raise for profit, so human human uh property, and they they would sometimes kill humans as well. So these are the direct effects of of a big predator like wolves um historically. Um wolves are uh being introduced in various places of the world, and we can talk more about that in detail. Um, but I've been interested in the indirect effects as well as the direct effects. So, could it be possible that wolves could actually benefit humans, uh reduce threats to human uh risks of human uh threats to human lives? Um, could they actually protect human property in modern times? So that's that's a little teaser, I suppose, of some of the things I'm working on.
Ash Sweeting:So, what have you found in that space? Because the the the to jump to the chase a bit, you you found that the numbers of road accidents between humans and between cars and um grazing animals, ungulates, could be decreased by wolves. So obviously that's not a natural thing. So can you talk through what you find found and and the research that you've done there?
SPEAKER_01:Absolutely. So umgulates would include deer, elk, uh, moose, um, and uh these animals are pretty abundant in many parts of the world today. They used to be um scarce uh historically. Um so in the US, for example, there were estimates of 35 million deer uh around the time of Christopher Columbus. So um around 1400, 1500, there was maybe 35 million deer within the continental US. Those numbers plummeted um due to excessive uh market hunting um under conditions of open access uh to deer and plummeted to less than a million by 1900. Uh, due to coordinated conservation efforts, those numbers are back to 35 million, which is kind of unbelievable, actually. So you have the same number of deer, one kind of ungulate, um, in the US that you had uh 500 years ago. But of course, you have um uh millions, millions more people. So there's lots more interactions between humans and deer. Um, less dramatic, but similar story for elk and moose, um, where you just you have more people and more animals due to successful conservation. Um but one of the residual effects of uh these large populations of ungulates is they um they cause damage to human human property. Um one is uh they present a risk um and present risk to human lives as well. So one is uh the potential that you're you're driving your vehicle in modern times and you hit a deer, you hit an elk, or you hit a moose, um, and that's an escalating uh ordering of of uh mortality risk. Actually, if you hit a moose, uh that's the it's likely to not go well. Um, and for an elk as well, and deer are smaller, but so you know, just collisions with deer in the US. Um there, I think I want to say there's almost 2 million collisions annually between vehicles and deer. Um, lots of uh deer vehicle collisions in Canada, um, some in Europe as well. Uh, but these result in 200, about 200 fatalities per year, 30,000 um human injuries. And and so these these, you know, one risk of overabundant deer populations is you you might hit one with your car. If, you know, when I talk about this topic, sometimes I'll be in a room of people, certainly in the Midwest or the Northeast part of the US, and I'll say, raise your hand if you've if you've been in a vehicle accident with a deer. You know, half the people raise their hand. And I said, raise your hand if a friend or a relative has been in an accident with a deer. Everybody, everybody in the room raises their hand, but they're so common. Um, I personally hit an elk uh um in Montana two years ago, so not a deer, but I um it it uh was on the highway and it was dark and it was very scary. I mean, I uh I didn't have any time to react. The elk just appeared right in my headlights. Um I mean, I literally had time to say, uh-oh, and then boom, hit the hit the elk. Um, my airbags deployed, I was not injured, my passenger was not injured, the elk was was killed, um, but it it completely um wrecked the car. I mean, the car was totaled. Um so so so these so these it um this is, I mean, I this is one one piece of damage from overabundant ungulates like deer. I mean, they also eat um farmers' crops, significant damage to timber. Um uh they impact household landscaping, so they get into gardens. They're potentially involved in the spread of Lyme disease, which can be fatal, um very problematic. So deer vehicle collisions are one aspect of the damages caused by overabundance of ungulates like deer.
Ash Sweeting:So, and how do how do wolf populations impact the number of road accidents or vehicle accidents with deer?
SPEAKER_01:Well, I mean, theoretically they could influence it through two channels. Um, one is is pretty obvious, is that they prey on deer, so they can reduce their populations, they can reduce the number of deer and hence reduce the probability that they'll just be deer around near roadways in in rural areas. Um, and so that's one way that they affect um deer vehicle collisions. The less is, or the second is more interesting, and and at least in in our in our particular study, we find likely more important. But if you add wolves into a landscape um that they previously weren't part of, that can really change the the behavior of deer, um, certainly in the short run, but maybe in the long run as well. In the short run, um deer could change their um uh mobility patterns, they could share, uh change where they where they congregate. Um, specifically, wolves could push them further away from roads. And so because deer are learning that the predators in the landscape, they're afraid of the predator, they want to avoid contact with it, they stay away. Um, where wolves have been radio collared, there's evidence that they prefer to travel along linear corridors like roads, creeks, riverbeds, because this can minimize their um calorie use. And so if wolves are traveling on roads and deer lead, you know, learn that, then they can um they can stay away. And so wolves could reduce deer vehicle collisions or elk vehicle collisions just by changing their behavior. Um in the longer run, the two can interact um where wolves are calling certain deer from the population, they're preying on them. And maybe through natural selection, those are the kind of deer that are more likely to be involved in deer vehicle collisions, you know, perhaps the uh the less shrewd uh part of the gene pool.
Ash Sweeting:So there's also the I guess the possibly quite famous example of the wolves in the ocean in um Yellowstone, where they um changed the grazing pattern of the deer, and then they changed the nature of where the pastures are and where the forest was and the emergence of saplings, and then that led to you know opportunities for beavers and things like that, so it ended up changing the course of the river. So I think there's there's a lot of um I think the the underlying fact is there's a lot of complexities in our behavior and in animals' behavior, and if you just have a very single, you know, knock-a-mole, whack-a-mole approach where the deer killed my livestock, I go and kill the deer. Uh that's uh the indirect effects could outweigh, or the negative impact of the indirect effects could outweigh the positive benefit of a very direct impact. So moving on a bit to so what what's your thoughts on that, I guess, to start off with?
SPEAKER_01:Oh, I think I think that's really important. I think policy focuses on the direct effects and the the big economic impacts could be the indirect effects. So you you mentioned this research in Yellowstone about the cascading effects of uh of having an apex predator in the system, and so it funnels indirectly through the whole ecological system. Some of those secondary third effects are more important ecologically, perhaps, than the primary effect. And so I'm an economist, um, not uh an ecologist, uh, but but so we're trying to study these indirect effects through economic channels. And and so, you know, in terms of in terms of policy, I think you need to understand them. If you're trying to set policy towards predators or wildlife, it's actually going to benefit um local communities, landowners, farmers, um, uh in a Real in a real way, you have to understand um the whole the whole system. So yeah, the direct effects uh are pretty easy to see. Uh wolves eat sheep, they eat lambs, they eat calves, and um can have a significant negative effect through that direct effect on farmers' livelihood. Uh, you know, some of these profit margins are slim, and you lose a couple animals, uh, you're in the red. And that's, you know, and so you get these political constituencies that are really opposed to wolves because they see these direct effects, they feel them, they're obvious. Um, but indirectly, I mean, it's possible that, you know, maybe theoretically, wolves are a net benefit to some of these farmers. Uh one one effect is, or community in communities, so one effect is in the control of um abundant deer populations and the damages that they cause. We talked about that. Um, the other thing an apex predator like a wolf does is it controls um subservient predators like coyotes and fox and felines, so like bobcats and mountain lions. Doesn't necessarily control bear or mountain lions, but you know, wolves compete with them and they can push them out of certain areas. And so these other uh predators are also a threat to um to to to farm to farmers. I mean, that you know, the the the livestock, you know, the actually the number one threat to um uh the number one cause of livestock damage in the US is from coyotes. And so if wolves reduce, I mean that theoretically they might reduce some of those effects. Uh and and so then, you know, indirectly, um, if you if you look just at the direct effect and don't net out the indirect effect, you could come to uh the wrong conclusion about whether wolves are good or bad economically for rural communities.
Ash Sweeting:And I think there's also on top of that the you know, if you've got hundreds of deer grazing on your pastures, then there's certain you know, a lot less pasture available for your livestock as well. So there's direct competition for food in there as well. But and what you're saying makes uh a lot of you know, it's it makes perfect sense. And uh we understand it's complex, we understand that the benefits are um uh dispersed and the and the problems uh but the problem is I guess concentrated in you you've seen the wolf kill uh kill an animal. Um now if you bring this back into the human side of things and how we think about that, and um you know, one very common tool is a cost-benefit analysis that's used or other similar tools to evaluate whether a policy is going to be uh um implemented or not. How do you how do you work through that human side of things with the comp because the the direct effects are very simple, but the cost of uh hunting the wolf versus the cost of the livestock? It's a very simple equation to work out. Whereas once you start looking at all the other potential, the impact on other predators, um, the impact on um Lyme's disease, vehicle accidents, etc., it becomes much more complex. So, how do we need to think about that from that human perspective in terms of how do you value wolves um in the positive effect, which is much more difficult than the cost of them um in terms of direct damage, if that makes sense, what I've just asked.
SPEAKER_01:Yeah, that uh it makes sense, it makes sense to me that you know coming up with a good answer is difficult, but the question makes perfect sense. Um, just backtracking a moment on your earlier point that ungulates compete uh uh with livestock for forage. I mean, that's certainly the case um in Paradise Valley, which is just north of Yellowstone uh park, where the elk migrate uh through the valley and there's ranchers that have livestock, and the elk certainly um compete for forage uh with the livestock. So that's that's another interesting um indirect interaction between the predator prey and and profit from livestock. I'd I'd be I'd be remiss if I didn't mention a you know one of the one of the big benefits um to rural communities of ungulate populations is you know, hunting, recreational hunting is still um uh still important in some parts of of the world, certainly parts of the US, and they it attracts revenue to local communities. Um and so one of the direct effects of large ungulate populations economically is it it can be a local stimulus through through hunting. And so you have these different constituents, and I think this feeds into your cost-benefit analysis question. I mean, you have these different beneficiaries of uh large ungulate populations, you have those who bear the costs, uh, and then you add a predator to that system, and it oh, it gets even more complicated with direct and indirect uh benefits and costs. Uh so you know, I think the answer to your question is twofold. One is how do we understand, how do we measure the the benefits? I mean, the the the direct the direct costs are you know easier to to ben to measure. We can see that you know livestock's been killed, we know how much it would have been sold on the market, you know, we can we can peg a number to that, but the the indirect benefits of wolves are are hard to measure because they're dispersed. So that's one one question is how do you measure them? And the other is is it at all possible to set up a system that those who benefit compensate those who bear the cost? Because, you know, in you know, as an economist, I think that's the that's the gold standard for determining the optimal level of any natural resource use that's both the asset and a liability, like wildlife is an asset and a liability. Some people want more, some people want less. Those who want more uh, you know, should pay for it, and those who bear the cost should be compensated in some way. And so, so, so, you know, so there's so there's a question of understanding what these benefits and costs are, and then setting up a system such that those who get the benefits compensate those who bear the costs. And so my some so go ahead, yeah.
Ash Sweeting:So on that, it's it's that that you know, the the ranch has got the walls on their property, and there's going to be a certain loss of livestock. And then there's the person who's driving their car or their vehicle down the road, and they don't see a deer, they don't hit a deer, they just have a completely normal drive down a road when nothing happens, and then obviously they've benefited from the fact there are less or fewer deer on the road, but there's no trigger point to say I should I should have to pay for that benefit because nothing happens. So there's the perception of the two of them, and it'd be it's very easy to see how the rancher then goes, I'm just gonna solve my problem and forget about all the other problems, because there's no trigger point to say, Oh, I should have to pay for this this fact that nothing happened when I drove down the road.
SPEAKER_01:Absolutely, and the inverse is true. If you know I'm you know, live in uh an urban area in Chicago or Washington, DC, and I'm pushing for policy to reintroduce wolves in rural areas, uh, you know, they're not a threat to my economic livelihood, so I don't bear those costs either. So that this is a symmetric problem where um where what we really want in a well-functioning economic system that will kind of push us towards some kind of optimal number of wolves in a system would be, yeah, those who those who get the benefits are meeting with those who bear the costs and coming up with some kind of cooperative agreement. And that's like, I mean, that's that's kind of how economic trade works, right? You know, I mean, you get cooperative agreements through mutually beneficial exchanges. And so that's that's you know, that's the gold standard, tricky to get there. Um, but you know, one starting point is compensating um, one starting point is compensating ranchers who lose livestock to um to predators is compensating them for their losses. That's like a starting point. And that's that's really what made the reintroduction of wolves um in in Yellowstone Park in 1995, which was one of the the first reintroductions, and the one you mentioned that triggered these ecologic each ecological studies, you know, it the way that became politically feasible is um is there was an agreement to compensate um uh livestock owners for their losses. So, like, you know, the livestock owners were opposed because they thought there's no way wolves are gonna stay in Yellowstone Park, they're gonna spread into Wyoming and Idaho and Montana, and they're gonna eat my animals. And um, the environmentalists on the other side were saying, well, you know, we we we want wolves in the in the system, they're gonna be good for the ecology. And, you know, and how do you how do you come up with a compromise? Well, the compromise was attributed to, I think, uh, at least in in my mind, to a really cool entrepreneur and viropreneur named Hank Fisher. And Hank Fisher worked for Defenders of Wildlife, advocate of wolf reintroduction. And he would go to these meetings with ranchers, and the ranchers would say things like, Hank, I can't believe anybody hadn't killed you yet, you know, because that's how unpopular he was. But he he he kind of worked both sides of the table and he got um the environmental group, the defenders of wildlife, to raise money to pay ranchers for their for their losses. And so, you know, this is back in 1995, and now compensation payments are really common. They're they they exist in France, uh, where wolves have spread, they exist in Spain, um, and you know, in Wisconsin and you know, and everywhere. So um so compensation is now um now pretty common, and that's a starting point because like I mean you you you have at least you at least initially you had people who are making voluntary contributions to the environmental defense fund because they wanted wolves and uh and they were gonna pay for those who bore the cost. So, you know, there there's shortcomings of the compensation programs. Um, happy to talk about those, but it's at least the starting point for now. Now, how do you how do you take that further? You know, how do you take it further? You say, okay, well, now we're now we're starting to discover that, you know, and quantify some of these benefits. So the the benefits in Wisconsin from a reduction in deer vehicle collisions um that me and my co-authors attribute to the spread of wolves. Um, we we've you know talk about the details of this study, but we compare um the timing of colonization of wolves in different counties in Wisconsin from uh the early 1990s to close to the present. And where wolves colonized these counties, um, we saw a 25% reduction in deer vehicle collisions. And we think two-thirds of that is due to wolves changing deer behavior rather than just eating deer. So then we took that, we took, you know, well, what's the implied value of that reduction in deer vehicle collisions, you know, due to um lower probability of premature mortality of humans, which economists can put a statistical value to that. It's controversial, but we do. Uh, and and you know, what's the value of the property, the vehicle that uh was damaged? Uh you know, add all that up, compare it to the verified losses um uh due uh for for ranch owners in Wisconsin due to um predation, direct predation from wolves, and that's a 63 to one uh number. So the the benefits from wolves via the reduction in deer vehicle collisions is 63 times greater than the compensation payments the state was making for verified losses. So that's that's you know, I that's so those are verified losses. And you you could say, and and I think it's an important point, uh livestock owner will say, well, you know, wolves they have these other indirect effects on my operation. They reduce the productivity of my animals because they're they're scared, they're threatened. And so those losses are probably bigger to ranchers than the verified losses just from um predation. And I and I think that's completely valid, completely true. I'd love to measure it. We're trying to through other research. Um, but still a 63 to one ratio is a is a big difference. And so this goes back to your earlier point. I mean, is there a way to get you know drivers in rural communities who benefit from a lower threat of deer vehicle collisions? Um sort of to chip in for uh the damages that wolves cause.
Ash Sweeting:That's um 63 to 1. And even if we halve that because we say you know the measurements are imperfect and call it 30 to 1, there's there's not many opportunities out there where you can invest in something at a 31 return. Um so that's that's pretty impressive. And I guess I guess the other side of that is uh it's quite uh if you if you knew there was a 60 or 30 to 1 return out there, um you'd expect people to be queuing at your door trying to, you know, where can I invest in that? So the fact that this has slipped through the cracks for for so long and we haven't seen it is also a very um interesting kind of um mirror into the way we think about problems. And uh um but what in terms of uh the wolves is such a beautiful example of this, but I'm sure uh it's not the only one out there. So uh where where else do you see opportunities to sort of use this kind of thinking um in terms of our food systems and sustainability? And the other side is where do what's the role of governments or markets or incentivizing and disincentivizing certain behaviors to try and guide um policies that will will lead to these better outcomes?
SPEAKER_01:Yeah, I um on your on your point that it's surprising to slip through the crack, uh, through the cracks, um it you know, it that's one of the one of the big values of um scientific research, I think, like this is to is to try to cast light and quantify um some of the complex things that are happening in ecological and um agricultural systems, um, so that so that we have better information and on which to base policy. So data, data-driven information. And so that's that's I think one reason is uh we didn't we didn't have it, we didn't have it quantified in this way until pretty recently. Um the other the other potential reason is these effects are likely variable in different places. So um I we have a follow-up study um with uh co-authors that I've that I've worked with on uh wolf issues looking at um Quebec Canada. And so there's wolves on one side of the St. Lawrence River and have been for 100 years. On the other side, there isn't. And we're finding uh very similar effects that there's um much higher deer animal vehicle collisions. These ones include moose in Canada on the side that um doesn't have wolves, and so uh, but you know, I I don't know if the effects look the same in um other parts of the world and other parts of the country. And so um, so the 30 to one opportunity, you know, maybe it's maybe it's 15 to one in what in some places and 30 to one in others and 100 to one and others, um, because ecological conditions are different and the and the human interactions are different. Um in terms of uh in terms of economic incentives and policies that can kind of uh steer us closer to optimal levels of prey and predators in a in a system. Um we have some new technologies and some innovative things that are happening um on both fronts in terms of compensating landowners for um hosting ungulates and for hosting predators, even. One example that's pretty new is a group um in the Western US that is paying landowners for presents. So it's setting up wildlife cameras on property. And if the if the animals are spotted, there's literally a menu list of, you know, a wolf is worth this much, a grizzly bear is worth this much, uh elk is worth this much. This is recognizing that um for landowners, these animals could be perceived to be a liability. If they're perceived to be a liability, they're not gonna feel welcoming towards them. That could hurt long-run efforts towards compensation. Um, and so we're actually gonna we're gonna pay them um not only if they lose an animal due to predation, but just if they're hosting animals. And that kind of takes you to a next level of economic contracting where I'm like, that's a pretty sophisticated contract. Um, you know, where I'm, you know, and then it starts to change the incentives of the landowner. Like, oh, now this now this animal's uh more of an asset than a liability. And I'm recognizing that people value it, they're putting money where their mouth is, they're not just forcing it down my throat and telling me I, you know, I I can't do anything to manage these animals that are a threat to my livelihood. Um, but instead, like, oh, they're you know, they're I'm I'm I'm gonna get I'm gonna get compensated. Maybe at the margin I install a more friendly wildlife fence that allows them to, you know, uh elk to move more freely. Um, because I actually wouldn't mind them on my property. I'm not trying to keep them out. And maybe I uh dedicate a little bit more of my land to wildlife habitat. And so your interests are in long-run sustainability and these ecological and agricultural systems. Well, you know, these kinds of advanced ways of economic contracting, that's the basics, the basics of a market interaction, as you know, is can you can you make an agreement with someone? If if X happens, I'll pay you Y. And then you're you know, you're you're more likely to get that if this kind of cooperative um payment payment system. So I'm not sure I'm answering the question you you raised, but I wanted to I wanted to point that out as a um I don't know, kind of a frontier um form of economic contracting that really uh accounts for um incentives for economic incentives as primary to resource sustainability.
Ash Sweeting:Um that's fascinating. I think um adding to that the back on the indirect effects, which I'm sure there there's a lot of work to measure some of these, but excuse me, there's uh there's pretty there's lots of research out there that if you're grazing a pasture with a combination of sheep and goats and uh cows or cattle, um, you'll get um a better utilization of that pasture. And you know, the goats will eat certain species that the sheep won't, and the sheep will eat certain things that the cattle won't, and as long as you don't overgraze it, um, having those multiple species is is highly beneficial to the land and to the regrowth and the amount of pasture you're growing. So there's no other reason to believe that having uh non-domesticated uh grazers on the land wouldn't have similar benefits in terms of things like woody weeds or or various different other other parts of what's grows there. So that goes back in again into uh what are the uh direct and indirect uh consequences and uh benefits of these these kind of policies. But uh speaking to you mentioned the gentleman who started the program in Washington, in um Yellowstone in the mid-90s, and you know how how he uh was not overly popular among the ranching communities. How have you seen attitudes with these um communities and with the people whose land this is happening on um changing over over the years?
SPEAKER_01:I mean, there's uh There is in some ways a new a new generation of ranchers and farmers. And I think their their views on predators are complex and they're varied. So not every every farmer and rancher feels the same way about predators, but uh certainly the ones that I interact with are very open to um listening to um uh research find I mean to to learning from research findings. And and if you have some data-driven evidence, um uh you know they they want to hear that. Um I think what's probably been similar over time is um landowners and ranchers are pretty resistant to top-down regulatory controls on their land use. And so um one thing that is probably a constant, more or less, is you know, something like the Endangered Species Act in the US, which constrains um how a rancher or farmer can react to a threat from wildlife is something that they bristle at. Um, and and it's because it's a regulatory uh stick rather than a carrot. And so one of the one of the ways in which the Endangered Species Act has improved and I think helped with landowner and farmer perceptions of wildlife is there's over time since the act was passed in the 70s, there's been amendments like a safe harbor agreement um and and and other amendments that have recognized that you know uh this doesn't seem that fair to landowners, to farmers, to ranchers. And moreover, um, if we really want successful species conservation, um, we want the landowners and farmers and ranchers to be more like allies, allies to us than enemies. And so things like the safe harbor agreement um will begin to compensate landowners for um protecting habitat rather than destroying habitat, um, and certainly not penalizing them for protecting habitat. So, one example of an unintended consequence of the Endangered Species Act is you know, if you become regulated under the act, it's a violation of the law to destroy habitat on which an endangered species relies. And so, in anticipation of that future constraint on your economic options, some landowners preemptively destroy habitat. Um, a good example is the uh red cockaded woodpecker in North Carolina, it nests in old growth trees. Uh, landowners know this. They know that once they have red cockaded woodpeckers in their trees, they can't cut them. And so, and and you know, in some of these areas, forestry is a is a you know a source of economic profit. So, what do the landowners do in these places? Well, they would preemptively cut trees so they couldn't provide habitat. Amendments to the Endangered Species Act have um uh uh left like lessened that problem. Um and so it's a long-winded way of saying uh, you know, attitudes are changing, but attitudes in part are a function of policies that recognize some of the costs that wildlife uh uh can can can cause to landowners.
Ash Sweeting:And yeah, I guess the big thing there is incentivize um versus disincentivise. If you if you uh if if society realizes the benefit of wolves or the pet woodpeckers or other species and are willing to compensate the or rancher to um house those and look after them on their land, um then obviously there's the you're creating a mutual benefit for both groups, um rather than a you know the more top-down regulatory approach. Absolutely. Yeah. And we've talked a lot about wolves and grazing systems and ranching um systems, but are there other areas that you've been studying where you see uh I guess not necessarily simmer, but you see the complexities between the direct and the indirect benefits of things um that that you could also share.
SPEAKER_01:Yeah, I um so I study natural resources and I teach courses in um the economics of natural resource management, and and so we talk about uh renewable resources and non-renewable resources and uh and and also water, which is kind of in between the two, right? You have um uh uh you know groundwater supplies are are renewable in some sense, but they can take a long time to regenerate. Um, and you know, I study fisheries and forests and other resources like that. And um one of the conclusions that I've come to over the years of both researching these topics and teaching on their conservation is that if you want long-term resource conservation and sustainability, we need policies that cause users of those resources to treat them like they're the owner. Now we we we might not want to convey ownership, it might not be practical or politically feasible or even socially desirable for individuals and groups to own uh uh every natural resource, but if they have power, if we have policies that encourage them to act as if they own it, then the incentives are going to be aligned for long-term conservation. And so, you know, you have these interactions between short-term use and long-term conservation, and and some of those are through direct and some are through indirect channels. Um, so take uh take water, for example. So water is a key input for agriculture and food systems. Um, globally, it's by far the dominant use of fresh water, and this is groundwater and surface water. Um, but water is becoming scarce in many places. Um, there's annual fluctuations that vary uh, of course, by region, but the long-term trend has generally been a decline in groundwater, um, certainly in arid places in the US, but globally, like India, for example. Um, and so so you know, I'm interested in why, you know, why is that uh resource becoming um scarce and and what what can economics offer in terms of um trying to encourage better long-term conservation of water supplies?
Ash Sweeting:And I I love what you said about treating the asset to treating the the entity or the the object of conservation as or having people treat that as they as they would own it. Because if you if you think you know, if you see something that you own, then you will likely see that as an asset that you want to maintain and preserve and maintain the value of rather than as something that you want to you know destroy or get rid of.
SPEAKER_01:So so if the question is why, you know, why is groundwater becoming more scarce in in many parts of the world, well, there's proximate causes. I guess these are the direct causes. Um, there's growing demand um for water from urban users, uh through agricultural systems, even for manufacturing of um, you know, uh chips, for example, it's very water intensive. Um, but there's there's a more fundamental root cause, I think, and that's due to the governance of water and policies governing water that do not create strong incentives for long-run conservation. They don't um uh they don't mimic ownership arrangements, they don't allow the user to think of the resource as if they owned it and hence a long-run asset to to try to preserve over time. Um and and that's really like if you think about groundwater, um there's there's a lack of clear ownership. Groundwater aquifers um uh can span large subsurface areas and they can be underneath um uh lots of surface parcels. And so it's like a common pool resource. If you're you know, if you if you drill a well in one part of the aquifer, you're you're drawing water um that other people could use. Um, and so this creates incentives as if the resource is is like a you know, sometimes like an open access resource, or certainly like common property. Um, and so if the system is set up by the rule of capture, that is to say, I own the water only once I withdraw it from the aquifer, then my incentive is to withdraw water from the aquifer and use it before others um can use the resource. And so the rule of capture is is a very weak ownership structure, um, and it's prevalent all across the world. Uh, and so I think that's fundamental to the problem, at least of groundwater depletion is is is this, you know, who owns it. And so how do you how do you set up systems um for which, you know, what are the causes of that, uh, of that insecure ownership or insecure rights? And how do you how do you change the system? Well, one issue is there's often use it or lose it laws to waters for surface and groundwater. This is common across the world. So, you know, if you don't use the water, you lose your rights. So this is like the rule of capture. The economic incentives this creates are just are really obvious and they're they're easy to describe to students. Um, and and so when I do so, they can see right away like this is not a sustainable incentive structure. I mean, but there's other issues with water, like you know, in some places of the world we subsidize, um, we subsidize water use. Often we subsidize governments subsidize energy use. So um if electricity is used to pump water from groundwater and we're subsidizing electricity, we're gonna get more groundwater pumped uh than we would get without those subsidies. Um, you've seen that in parts of India, for example. Um, and and another another issue with water is there's um restrictions on trading. And so even if I have a claim to a pertinent water, water in a river next to my property, or if I have a fairly secrete secure right to groundwater that I could that I could pump from the from the ground, um, there's you know specific restrictions on how I can use it. Like it might have to be employed for beneficial use, as defined by the state. Well, you know, how the state defines beneficial use sometimes in ways that's beneficial for generating revenue from the state. So, like, you know, uh uh the the beneficial use might not be to keep the water in river or in ground, you know. So if I'm a if I'm a water conservationist and I've raised money to um try to keep water in stream, maybe for fish habitat, or keep water uh in the ground for future conservation. As an owner, you are often disallowed to make an agreement with me where the environmental group pays you as a landowner to conserve the water. There's restrictions on that because conservation is not defined in the law as a beneficial use. Um, so it's a very like it's a that's a strict restriction on water marketing and water trading and economic contracting for conservation.
Ash Sweeting:And and you're not gonna get you're not gonna get the owner to or the the user to act as a full owner, would the what what what's what's quite evident from everything we've discussed is that the the indirect effects keep on cascading and uh much, much more complex than um than the direct effects. And uh, you know, going back to the the water use side of things in certain states, um to maintain water rights, you have to keep livestock on your property. And so you end up with people owning livestock purely for the main reason of um maintaining their water licenses and their water rights rather than actually because they want to be livestock producers. And so, you know, those and there's the environmental impact of those livestock and the fact that they're not you know as efficiently managed as someone who's a full-time livestock producer, um, and that just leads back into the incentives um that are there for but the drive behavio behaviour. So I know this is a this is the the very open-ended question, and um there's no simple answer to this, but you know, in terms of what can be done to actually start to alter policies to align um the outcomes with uh you know the uh benefits to the whole community, um, what are your thoughts on that?
SPEAKER_01:In the case of water, I think um eliminating use it or lose it laws is is a starting point. So you can get um new demanders of water um to interact with kind of traditional uses. So traditional uses of water have been for agricultural production um and for um mining, sluicing mining. Um uh but there's new demands for water, and if if at least those um uh new demanders, some who want um water to kept be kept in basin for ecological uh benefits. So for fish habitat, for example, or wildlife habitat, if you can at least um set up a system where they can do business with one another, I think you're likely to get um more uh beneficial long-run uses of water, non-uses of water, um, conservation. So I think um, you know, changes that just um uh uh make markets more possible are are gonna help with water. And certainly getting rid of um subsidies that um encourage you over excessive use of water, I think is you know a pretty obvious policy change. Um and so those are two with respect to water.
Ash Sweeting:Wonderful. We're basically out of time. So before we go, is there anything that you'd like to add that we haven't already discussed?
SPEAKER_01:At the beginning, you asked, you know, how I became interested in um in wolves uh and their complex interactions with local communities. And um I will say I I worked in Yellowstone National Park in 1994. Um, I was a 20-year-old uh student at the time, and I just worked there for a summer. And right at that time, um, there was, you know, the the top discussion in Yellowstone was the reintroduction of wolves. And so I was uh exposed to all the arguments for and against uh that were happening. I mean, this is what this is what people in the Yellowstone region were talking about at that time, and so that is, you know, as I as I uh um moved forward in my career and ended up getting a PhD in economics with an infinite emphasis on uh environmental science, it was something I always wanted to to study, like can we, you know, can we quantify some of these effects um that we hear uh, you know, that there's there's some bar stool talk about the ecological and economic impacts, but you know, can we apply these economic tools in particular, uh, the empirical tools, um, to try to begin to understand what some of these costs and benefits might look like once you incorporate uh the full system, direct and indirect. And so um uh so that that was that was kind of the origin of my interest in in this topic.
Ash Sweeting:Well, that's absolutely fascinating. It's great to, you know, that that journey, um, it's great to see the inspiration that working in Yellowstone has had and how that's kind of you know come back in at a later state. So that's really cool to hear. Thank you. So, Nick, thank you very much for joining me today. Um, yeah, thank you. It's great to be here. Thank you for listening to The Ashcloud with me as sweeting in conversation with Nick Parker. If you've enjoyed this podcast, please subscribe to The AshCloud, where I continue to discuss food sustainability with guests to bring a deep understanding of the environmental, political, and cultural challenges facing our societies and creative ideas on how to address them.