Global change and the value of biodiversity for new product research. Final project report, September 1, 1995--August 31, 1996

A number of biologists believe that human activities are causing species extinctions at alarming rates. The only precedents, they claim, are to be found in the mass extinctions associated with a handful of apocalyptic volcanic eruptions and/or meteorite strikes distributed over geological time scales. Slowing the rates of greenhouse gas emissions, natural habitat destruction, and other factors that are believed to be inducing modem extinctions could be very expensive, however. It is natural to ask, then, what is the value of preserving biodiversity. One (although admittedly, among many) argument frequently made is that biodiversity is a source of new industrial, agricultural, and, particularly, pharmaceutical products. Natural organisms, it is argued, are great repositories of genetic information. Wild species, in their struggle to capture prey, escape predators, resist infection, and enhance reproductive success have evolved chemical mechanisms more elaborate and inventive than those synthetic chemists can now create. If these chemical mechanisms could be adapted and refined for human use, they could be of great value. There has, therefore, been considerable interest among natural scientists and conservation advocates in {open_quotes}biodiversity prospecting{close_quotes} the search for new commercial products among naturally occurring organisms-as both a mechanism and an argument for preserving biodiversity. In recent years economists and others have attempted to estimate the value of biodiversity for use in new product development. These studies vary considerably in their data, methods, and estimates. The Simpson, Sedjo and Reid and Polasky and Solow papers differ from previous work in that they focus on what is arguably the economically relevant issue: what is the value of biodiversity on the margin