Chapter 7 Bioeconomics and International Trade: The Case of the Great Salt Lake, Utah

Abstract

We present a computable general equilibrium model of the interface between the Great Salt Lake (GSL) ecosystem and both the international and regional economy that impacts the ecosystem. International trade is accounted for in the simplest of terms, involving the export of each of the ecosystem's main commodities and importation of a composite good, as well as equilibrium balances in the savings-investment and current accounts. With respect to the ecosystem, the model treats the various representative species as net energy maximizers and bases population dynamics on the period-by-period sizes of surplus net energy. Energy markets – where predators and prey exchange biomass – determine equilibrium energy prices. With respect to the regional economy, we model five production sectors (at the aggregate industry level) – brine cyst harvesters, the mineral-extraction industry, agriculture, recreation, and a composite-good industry – as well as the household sector. By performing dynamic simulations of the joint ecosystem–regional economy model, we isolate the effects of period-by-period stochastic changes in salinity levels and an initial shock to species-population levels on the ecological and economic variables of the model.

Citation

Finnoff, D.C. and Caplan, A.J. (2010), "Chapter 7 Bioeconomics and International Trade: The Case of the Great Salt Lake, Utah", Gilbert, J. (Ed.) New Developments in Computable General Equilibrium Analysis for Trade Policy (Frontiers of Economics and Globalization, Vol. 7), Emerald Group Publishing Limited, Leeds, pp. 189-216. https://doi.org/10.1108/S1574-8715(2010)0000007010