Economic Impacts of Invasive Species in Forests · hectares of forest plantations (Anon 2007). On...

THE YEAR IN ECOLOGY AND CONSERVATION BIOLOGY, 2009

Economic Impacts of Invasive Speciesin Forests

Past, Present, and Future

Thomas P. Holmes,a Juliann E. Aukema,b Betsy Von Holle,c

Andrew Liebhold,d and Erin Sillse

aU.S. Forest Service, Southern Research Station, Research Triangle Park,North Carolina, USA

bThe Nature Conservancy, Seattle, Washington, USAcUniversity of Central Florida, Department of Biology, Orlando, Florda, USA

dUS Forest Service Northern Research Station, Morgantown, West Virginia, USAeNorth Carolina State University, Department of Forestry & Environmental Resources,

Raleigh, North Carolina, USA

Biological invasions by nonnative species are a by-product of economic activities, withthe vast majority of nonnative species introduced by trade and transport of productsand people. Although most introduced species are relatively innocuous, a few speciesultimately cause irreversible economic and ecological impacts, such as the chestnutblight that functionally eradicated the American chestnut across eastern North Amer-ica. Assessments of the economic costs and losses induced by nonnative forest pests arerequired for policy development and need to adequately account for all of the economicimpacts induced by rare, highly damaging pests. To date, countrywide economic evalu-ations of forest-invasive species have proceeded by multiplying a unit value (price) by aphysical quantity (volume of forest products damaged) to arrive at aggregate estimatesof economic impacts. This approach is inadequate for policy development because (1) itignores the dynamic impacts of biological invasions on the evolution of prices, quanti-ties, and market behavior, and (2) it fails to account for the loss in the economic value ofnonmarket ecosystem services, such as landscape aesthetics, outdoor recreation, andthe knowledge that healthy forest ecosystems exist. A review of the literature leads oneto anticipate that the greatest economic impacts of invasive species in forests are dueto the loss of nonmarket values. We proposed that new methods for evaluating aggre-gate economic damages from forest-invasive species need to be developed that quantifymarket and nonmarket impacts at microscales that are then extended using spatiallyexplicit models to provide aggregate estimates of impacts. Finally, policies that shiftthe burden of economic impacts from taxpayers and forest landowners onto partiesresponsible for introducing or spreading invasives, whether through the imposition oftariffs on products suspected of imposing unacceptable risks on native forest ecosys-tems or by requiring standards on the processing of trade products before they crossinternational boundaries, may be most effective at reducing their impacts.

Key words: forest pests; pathogens; invasive; nonnative; economic; contingent valua-tion; hedonics; ecosystem services; chestnut blight; management; trade; gypsy moth

Address for correspondence: Juliann E. Aukema, The Nature Conser-vancy, 1917 1st Ave, Seattle, WA 98101. [email protected]

Introduction

Biological invasions are among the most se-rious environmental problems currently facingsociety. Through millions of years of evolution,

The Year in Ecology and Conservation Biology, 2009: Ann. N.Y. Acad. Sci. 1162: 18–38 (2009).doi: 10.1111/j.1749-6632.2009.04446.x c© 2009 New York Academy of Sciences.

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Holmes et al.: Economics of Forest Invasives 19

the world’s biota has been largely separatedinto independently coevolved ecological com-munities, but globalization has broken downbarriers to movement, resulting in an ex-change of species among and within continents.While many invasions have been inconsequen-tial, certain species have profoundly alteredtheir invaded environments, affecting ecosys-tem processes and ultimately impacting humansocieties.

The biological (US Congress OTA 1993;Williamson 1996; National Research Council2002; Lockwood et al. 2007) and economic(General Accounting Office 2000; Perings et al.

2002; Pimentel et al. 2000) aspects of biologicalinvasions in general have been reviewed. Thereare also some general reviews covering eco-logical aspects of invasions in forests (Liebholdet al. 1995; Lovett et al. 2006), but we are notaware of a previous review focusing on the eco-nomic aspects of biological invasions in forestecosystems.

In this review we discuss the economics ofinvasive species in forests. We start with a briefdescription of the biological invasion problemand its ecological effects on forests. Next wedescribe the economic underpinnings of inva-sions; globalization is the root cause of mostinvasions, and there are complex economicprocesses driving this global trend. Then wedescribe the various economic consequencesof invasions, including impacts on nonmarketvalues of forests. Next we discuss the complica-tions of estimating aggregate economic impactsbased on a series of microeconomic studies. Fi-nally, in the last section we discuss the impli-cations of impacts of invading species on tradepolicies.

Ecological Threats Posed byNonindigenous Forest Pests

Humans have transported species from onegeographic region to another, both intention-ally and unintentionally, for millennia. It’s ob-vious that, in many cases, intentional intro-

ductions of nonnative species have providedtremendous social benefits. The production ofwheat, which was domesticated from wild an-cestors in southwest Asia, provides a good ex-ample. Today wheat is grown throughout theworld and is one of the most important staplefood crops (Prescott-Allen and Prescott-Allen1990). Within the forestry sector, plantationsof nonindigenous tree species have proven tobe highly profitable. Monterey pine (Pinus radi-

ata), which is native to a limited region in thefog belt of coastal California, accounts for ap-proximately 90% of New Zealand’s 1.8 millionhectares of forest plantations (Anon 2007). Onthe other hand, some intentionally introducedspecies become invasive and can cause signif-icant economic damages. This includes treessuch as Acacia mearnsii (black wattle) in south-ern Africa and Prunus serotina (black cherry) inEurope (de Wit et al. 2001; Chabrerie et al.

2007). Other intentionally introduced plantsthat are having a detrimental impact on forestproductivity include cogongrass (Imperata cylin-

drica), which is considered one of the ten worstweeds in the world, invading tropical and sub-tropical forested and nonforested areas in 73countries. Cogongrass forms large, monotypicexpanses, with Asia reporting over 35 millionacres affected (Garrity et al. 1997). Another ex-ample is kudzu (Pueraria montana), which wasintentionally introduced into the southeasternUnited States to prevent soil erosion and has in-advertently caused millions of dollars of lossesto timber productivity (Forseth and Innis 2004).

The U.S. government defines an invasivespecies as “an alien species whose introductiondoes or is likely to cause economic or environ-mental harm or harm to human health” (Fed-eral Register, Presidential Documents 1999).Invasion is a process in which an organ-ism moves from its native habitat (donor re-gion) and ultimately becomes a pest in a newhabitat (recipient region) (Vermeij 1996). Thisprocess occurs in discrete stages—arrival, es-tablishment, and population spread—which ul-timately can cause debilitating impacts to eco-logical and economic systems. At each stage

20 Annals of the New York Academy of Sciences

of the process, there is a low probability thata nonindigenous organism will progress to thenext step. The sequence of transition proba-bilities has been referred to as the “tens rule,”based on the notion that roughly one out of ev-ery 10 organisms makes the transition from onestage to the next (Williamson and Fitter 1996).However, transition probabilities may be muchhigher for some groups of organisms (Jeschkeand Strayer 2005).

Because nonindigenous organisms have notcoevolved with native biota, they threaten thestructure and functioning of native ecosystems(Wilcove et al. 1998; Simberloff 2000; Millen-nium Ecosystem Assessment 2005). Perhaps themost dramatic example can be found in theforests of eastern North America where, follow-ing European settlement, a sequence of non-indigenous pathogens and pests removed theAmerican chestnut (Castanea dentata) —formerlya dominant or codominant tree species in forestcommunities across eastern North America—from the overstory. Beginning in 1825, a rootpathogen (Phytophthora cinnamomi) killed chest-nut trees in the southern portion of the tree’snatural range, and by the end of the cen-tury, P. cinnamomi had killed most chestnuttrees in low, moist areas (Schlarbaum et al.

1997; Anagnostakis 2001). Thus, when chest-nut blight (Cryphonectria parasitica), another non-native pathogen, was first detected in 1904, therange of American chestnut was already re-stricted. Within a period of 50 years, C. para-

sitica swept over the entire range of Americanchestnut, killing virtually every overstory C. den-

tata in an area representing roughly 3.6 millionhectares (Anagnostakis 2001).

The removal of chestnut over vast forest re-gions of eastern North America has left last-ing effects on forest ecosystem structure andfunction, including decreased leaf-litter pro-cessing rates, decreased quality of litter inputs,decreased growth rates of aquatic invertebrates,and increased input of large woody debris intostreams (Smock and MacGregor 1988; Hed-man et al. 1996; Wallace et al. 2001). Therewas also a drastic change in the dominance

of tree species across its range (Mackey andSivec 1973; Day and Monk 1974; Myers et al.

2004), as well as decreased abundance of cavity-nesting birds following the blight (Haney et al.

2001). American chestnut accounted for ap-proximately 25 to 40% of the standing timberin some stands of the eastern deciduous for-est. Economic costs associated with the demiseof this species included losses in livelihood forthose who collected the nuts for food, and theloss of a high-quality timber that was used ex-tensively for construction and wood products(Myers et al. 2004). Microeconomic theory sug-gests that the reduction in timber inventoriesduring the decades following the catastrophicdecline of an important timber species will in-duce higher timber prices and a loss of prof-its for timber growers and wood-using firms(Holmes and Lee 1991). In addition, by di-minishing or degrading the suite of nontim-ber benefits provided in forests formerly domi-nated by chestnuts, such as landscape aestheticsor wildlife habitat, a substantial loss in eco-nomic welfare is incurred. Because the changein ecosystem structure and function is funda-mentally irreversible, the loss in economic wel-fare is potentially enormous.

Although striking, the loss of chestnut fromthe forests of eastern North America is not anisolated example of large-scale forest changecaused by nonnative pests, pathogens, andplants. Invasions by nonnative species continueto drive widespread changes in forest compo-sition and structure around the world. Thepinewood nematode was accidentally intro-duced to Japan in the early 1900s, and overthe last century has eliminated pines from vastforested areas in Japan and, more recently, inChina (Kishi 1995). In Hawaii, an array of in-vasive plants is changing the structure of therain forest (Asner et al. 2008). Emerald ashborer (Agrilus planipennis), discovered in Michi-gan in 2002, appears poised to remove an entiregenus from natural and urban forests through-out the upper Midwest and eastern UnitedStates (Poland and McCullough 2006; U.S.Government Accountability Office 2006).


Although it is clear that nonnative organismshave had, and continue to have, substantial im-pacts on native forests, it is difficult to quantifylong-term ecological impacts, both because for-est ecosystems adjust and evolve in response toinvasions and because most forest ecosystemsaround the world are subject to many anthro-pogenic disturbances. For example, palynolog-ical studies suggest that C. dentata increased inabundance in some areas following Europeansettlement and prior to the arrival of chestnutblight (Fuller et al. 1998; Paillet 2002). Todayeastern North American forests reflect a 250-year history of logging, clearing, burning, firesuppression, deer grazing, and natural refor-estation, as well as the impacts of nonnativeplants, insects, and pathogens (Foster et al. 1998;Fuller et al. 1998; Abrams 2003). These forestsdo not appear to be returning to the composi-tion and structure of pre-European forests, butinstead are much more homogeneous acrossclimatic gradients (Foster et al. 1998). In fact,human disturbances over 100 years ago con-tinue to leave a legacy of nonnative plantspecies (Von Holle and Motzkin 2007). In theface of deforestation and climate change, it isimpossible to know what these forests wouldlook like in the absence of chestnut blightand other nonnative pathogens, insects, andplants. Therefore, a comparison of the level ofgoods and services provided by forests with andwithout invasive species is confounded by thefact that a counterfactual “without” scenariocannot be easily defined. Transitory impacts,which occur while ecosystems and economiesadjust to biological invasions, are likely tobe more reliably evaluated than long-termimpacts.

The stages of invasion have been described interms of a series of ecological barriers or filtersthat may prevent an organism from proceedingto the next stage (Richardson et al. 2000; Co-lautti and MacIsaac 2004). Figure 1 illustratesthe stages of a biological invasion, the manage-ment actions that can be applied at each stage,and the economic implications. The first stagein the invasion process is the arrival of an or-

ganism from a donor region. If an organismis undetected during transport and successfullyescapes into a native ecosystem, establishmentdepends upon a suitable climate and proxim-ity to food resources. When populations andranges of nonnative organisms are small, eradi-cation has the best chance of success due to theAllee effect (adverse effects of low populationdensities) (Williamson 1996; Liebhold and Bas-compte 2003; Liebhold and Tobin 2008). How-ever, if an organism becomes successfully estab-lished and is not eradicated in a timely man-ner, favorable conditions may allow it to spreadthroughout suitable ecosystems of the recipientcountry. Eventually the invasive species maysaturate the entire geographical extent of suit-able habitat. Even at this point, managers maycontinue to suppress populations in order tominimize damages, but society is also likely toadapt to the presence of the invasive speciesand its impacts.

Economic Underpinningsof Biological Invasions

One of the key complexities of biologicalinvasions is the inherent interdependency ofecology and economics. While the economicconsequences of ecosystem changes producedby invading species are often well publicized,the invasions themselves are ecological conse-quences of economic processes. In particular,they are externalities, or by-products, of eco-nomic activity. As a result, the potential costs ofinvasive species are generally not factored intodecisions about exports, imports, and domes-tic transport of goods and people, all of whichare pathways for the introduction and spread ofinvasive species. Thus, invasions act as a con-duit by which one group of economic forcesinfluences other economic processes.

Economic processes affect each of the fourinvasion stages shown in Figure 1, but nonemore so than arrival. Crosby (1993) documentshow the beginnings of the current onslaughtof species invasions can be traced back to the


Arrival

Spread

WidelyEstablishedPopulations

RiskAssessment

Detection

DomesticQuarantines

Monitoring

InternationalQuarantines

Inspection

Eradication

Suppression

Market Values

Non marketValues

ManagementCosts

Barrier Zones

ECOLOGY MANAGEMENT ECONOMICS

Establishmentof Isolated

Populations

Figure 1. The stages of a biological invasion are linked to management actions that canbe applied at each stage; each of these management actions has economic implications.

international expansion of colonial Europe.This era of imperialism was driven by a varietyof economic processes, including the demandfor raw materials to process within Europe’sgrowing industrial centers, as well as the unsa-tiated demand for tillable land in Europe thatled immigrants to seek better agricultural op-portunities. These colonists brought with them(both intentionally and inadvertently), a va-riety of species, many of which establishedoutside of Europe and forever altered nativeecosystems.

As economies around the world have de-veloped, international trade of virtually ev-ery commodity has increased and this trendhas been the driving factor behind the steadyincrease in arrivals of nonindigenous species(Stanaway et al. 2001; Vila and Pujadas 2001;Levine and D’Antonio 2003; Work et al. 2005;Caton et al. 2006; McCullough et al. 2006).The National Invasive Species Council (2005)has mapped the great diversity of human-mediated pathways by which species are in-troduced. Many invasive vertebrate and plant


species have been deliberately introduced, of-ten through the pet and horticultural trades(Jeschke and Strayer 2005; Dehnen-Schmutzet al. 2007). Forest pests and pathogens areprone to hitchhike on other commodities orpacking material (Mack et al. 2000). Solidwood packing material (crating, dunnage, andspoolage) as well as roundwood have beenimplicated as particularly important pathways(Brockerhoff et al. 2006; Haack 2006; Piel et al.

2008). Air passenger luggage is another signif-icant invasion pathway (Liebhold et al. 2006;Tatem and Hay 2007).

While most arrivals of invasive species inmodern times are almost exclusively anthro-pogenic, establishment and spread continue tobe driven by the interplay of ecology and eco-nomics. A large body of literature indicates thatestablishment success is closely related to thefrequency and size of arrivals, termed “propag-ule pressure” (Leung et al. 2004; Von Holle andSimberloff 2005; Lockwood et al. 2005). Whenspecies are repeatedly introduced, Allee effectsand stochastic dynamics are much less likely tocause founding populations to go extinct. Asa consequence, the same economic forces thatwiden invasion pathways and increase arrivalrates can also be expected to enhance estab-lishment. There is more mixed evidence thathuman disturbance of ecosystems may reducetheir “biotic resistance” to the establishment ofinvasive species, particularly plants (Levine et al.

2004).The spread of invading species is also af-

fected by economic factors. As with arrivals, hu-mans may either deliberately or inadvertentlytransport invasive species over much greaterdistances than their natural rate of diffusion(Shigesada and Kawasaki 1997). For exam-ple, the importance of human-mediated spreadhas been demonstrated for gypsy moth in theUnited States (Lippett et al. 2008) and the horse-chestnut leaf miner in Europe (Gilbert et al.

2004). The movement of firewood, for recre-ational and residential heat purposes, has beenshown to play a critical role in mediating spreadof wood-boring insects (Muirhead et al. 2006).

Movement of nursery stock greatly enhancesthe spread of a variety of insects and diseases(Poland and McCullough 2006).

Policy or management can be applied ateach stage of Figure 1 to reduce the proba-bility of successful invasion or to reduce theassociated damages (Leung et al. 2002; Lodgeet al. 2006; Liebhold and Tobin 2008; Holmeset al. 2008a). International quarantine and phy-tosanitary policies such as ISPM15 are de-signed to prevent invasive species from enteringthe transport network, by mandating thermaltreatment, fumigation, or inspection of prod-ucts in exporting countries (Mumford 2002;Jabara et al. 2008). Inspection programs in portsof arrival may detect and eliminate organismsthat have survived transport. When an inva-sive species first becomes established, govern-ments may seek to eradicate it; for example,the U.S. Department of Agriculture APHIS(Agriculture and Plant Health Inspection Ser-vice) monitors and treats any areas where Asiangypsy moth and Asian long-horned beetle aredetected in the United States. However, be-cause it is often difficult to detect isolated popu-lations until they have become well established,eradication may no longer be possible by thetime that public resources are mobilized (Carey1996; Sharov and Liebhold 1998; Lodge et al.

2006; U.S. Government Accountability Office2006). Once an invasive species starts to spread,domestic quarantine and other barrier-zoneprograms may be implemented to postpone itsimpacts in new areas. For example, a U.S. For-est Service program has effectively slowed thespread of European gypsy moth (Sharov et al.

2002). At the same time, the U.S. Forest Serviceoperates a cooperative suppression program,providing cost-share and technical support foraerial spraying to suppress gypsy moth popu-lations in states and localities where there arealready widely established populations.

Public initiative to manage invasive speciesis essential because forest health protection isa “public good,” characterized at least to somedegree by nonexcludability (everyone benefitsfrom prevention, eradication, or containment


of an invasive species) and nonrivalry (the ben-efits to one person are not reduced by benefits toanother) (Sumner 2003). As previously noted,biological invasions are externalities of tradeand transport of people and goods—that is,they are side effects of economic activities thatare expected to increase welfare (Perrings et al.

2002). For example, both import-export firmsand the consumers in the importing countryderive benefits from trade in nonindigenous or-namental plants and commodities transportedin wood packing. However, each shipment isalso associated with a small risk of biologicalinvasion. Economic theory suggests that if theexporters and importers had to pay for thoserisks, they would effectively “internalize” theexternalities, resulting in an optimal level ofrisk, given the costs and benefits involved. Forexample, economists have explored the poten-tial for tariffs and fees in invasive-species pol-icy (Costello and McAusland 2003; McAuslandand Costello 2004; Knowler and Barbier 2005).Optimally, these would reflect the risks andpotential costs of invasive species arriving viavarious trade pathways, defined by commodity,country of origin, packaging, mode of trans-port, and phytosanitary measures, and wouldlikely raise the price and lower the quantity oftraded goods. Of course, this is easier to concep-tualize than to implement, because informationon these risks and costs is lacking.

One clear example of the balance betweeneconomic causes and consequences of pest in-vasions involves plantations of nonindigenoustree species. Such plantations represent the ma-jority of forest land area in many countries andindeed the world (Zobel et al. 1987). An im-portant reason why plantations of nonindige-nous tree species exhibit exceptional produc-tivity is the absence of pests and diseases fromtheir native range (Nair 2001; Wingfield 2003).Maintaining this exclusion of nonindigenoustree species from their pests necessitates strictphytosanitary procedures. Unfortunately, quar-antine activities in many countries have notbeen sufficient to prevent pest invasions andmany pests of nonindigenous tree species have

managed to “catch-up” with their hosts (With-ers 2001; Wingfield 2003). An excellent exam-ple of this is provided by Eucalyptus spp., whichare native to Australia but widely planted inSouth America, Africa, Europe, and Asia. Sev-eral major pest species from Australia (e.g.,Thaumastocoris peregrinus, Gonoptherous spp., Pho-

erecantha spp., Leptocybe invasa, and Colletogloeopsis

zuluense) have invaded all major regions in theworld where eucalyptus is grown. The problemmay be traced back to the operational diffi-culty of charging the cost of invasions (reducedtimber yield and reduced provision of non-market ecosystem services) into the economicsector that causes invasions (e.g., shipping in-dustries). These pest species cause substantialreduction in volume yield, and ultimately theeconomic return from Eucalyptus plantationsis less than had these pests been successfullyexcluded.

Several economic, legal, and political fac-tors converge to make effective managementquite challenging. First, invasions can progressthrough the “weakest link,” for example, theport with the least effective surveillance, thehomeowner who fails to notice diseased trees,or the fuelwood vendor who ignores a domesticquarantine (Perrings et al. 2002; Holmes et al.

2008a). For example, the deliberate importa-tion and accidental release of European gypsymoth in just one site eventually led to its es-tablishment as one of the most costly invasivedefoliators affecting U.S. forests. Second, mea-sures to prevent the arrival of potential invasivespecies are constrained by international tradepolicy, which allows inspections and quaran-tine but not tariffs differentiated by invasionrisk. Third, policy makers are handicapped bylimited information about which species willbecome invasive and about the size of newlyestablished and spreading populations (Moffitand Osteen 2006; D’Evelyn et al. 2008). Thismay discourage investment in measures (withlarge known costs) to reduce arrival rates (withuncertain benefits that are occasionally verylarge but usually negligible) (Horan et al. 2002;Finnoff et al. 2007). It is self-evident that the


costs of preventing the arrival or of eradicatingthe first established populations of particularinvasive species would have been much lowerthan the costs of attempting eradication afterestablishment and spread. However, as Perrings(2007) notes, this self-evident truth “is like cal-culating the benefit-cost ratio of the purchase ofa winning lottery ticket. The ex ante calculationinvolves uncertainty about the invasiveness ofthe species, the invasibility of the system beingprotected, the effectiveness of the control pro-gram, and the responses of those whose life andlivelihoods are affected by invasive species andtheir control” (p. 150). Finally, many invasiveforest pests and pathogens affect nonmarketvalues, such as some ecosystem services, land-scape aesthetics, and biodiversity. These gener-ally attract less funding and a less coordinatedresponse than invasions that directly threatenagriculture or human health (Lodge et al.

2006).

Economic Consequences ofBiological Invasions in Forests

Since the time Europeans discovered NorthAmerica, more than 368 nonindigenous phy-tophagous insects have become established inforests, woodlots, parks, and orchards (Matt-son et al. 1994). A characteristic of biologi-cal invasions is that most nonindigenous pestsare innocuous, and only a few become seriouspests (Williamson and Fitter 1996). From theensemble of nonindigenous forest insects thathave become established in North America, alimited number—such as the European gypsymoth, emerald ash borer, and hemlock woollyadelgid—are causing severe economic losses.The number of nonindigenous tree pathogensthat have become established in North Americais more difficult to gauge, as many pathogensare either innocuous or insidious and, in gen-eral, no effort is expended to document inva-sions by microorganisms unless they have mea-surable impacts. Nonetheless, a similar patternemerges for tree pathogens that have become

major pests; only a few tree diseases—such aschestnut blight, Dutch elm disease, and sud-den oak death—have had substantial economicconsequences. Therefore, if the past incidenceof economic damages induced by forest pests isviewed as a random drawing from some under-lying distribution of economic damage poten-tial, then accounting for the economic lossescaused by a few catastrophic nonindigenousforest pests might provide a reasonable lower-bound approximation to the level of aggregateeconomic damages that might be expected inthe future.

Although it appears to be both pragmaticand reasonable to focus attention on the eco-nomic impacts of the most damaging non-indigenous forest pests, accounting for the eco-nomic impacts of the top few forest-invasivespecies is not a simple matter. We stress that es-timates of economic damages from nonindige-nous forest pests need to be consistent with thatcomponent of microeconomic theory knownas welfare economics, which emphasizes theimpact of changes in prices, quantities, andenvironmental quality on the economic well-being of consumers and producers. Althougha number of studies have been conducted inthe context of microeconomic theory to eval-uate the economic impacts of nonindigenousforest species, the question remains as to howthese few studies might be scaled-up to provideestimates of aggregate economic damage.

Nonindigenous forest invaders cause dam-ages to a suite of forest ecosystem goods andservices. While impacts on timber values andtimber markets are substantial, we suspectthat damages to nonmarket economic valuesare at least as important. A preliminary esti-mate of aggregate economic damages wouldkeep separate accounts for the various cat-egories of damages that are incurred, keep-ing in mind that dollar values cannot alwaysbe summed if the underlying theoretical con-structs are disparate. For example, reductionsin revenues cannot be summed with reductionsin profits because the economic measures dif-fer, even though both impacts are measured


in dollars. Likewise, reductions in propertyvalues should not be summed with costs ofhazard tree removals on private property be-cause this might lead to double-counting ofimpacts.

Changes in Economic Well-Being

Within the domain of neoclassical eco-nomics, changes in the economic well-beingof producers and consumers in response tochanges in prices, quantities, or environmen-tal quality are topics in welfare economics(e.g., Varian 1984). Microeconomic analysis de-scribes the behavior of producers and con-sumers at the individual level and in termsof aggregates such as markets. A fundamen-tal principle of microeconomic theory is thateconomic agents attempt to do the best theycan, as they define it, given constraints on theiraccess to resources. When producers or con-sumers are faced with a change, such as dam-age to forest assets from a nonindigenous pest,they will generally seek means for minimizingtheir losses. The tendency for people to searchfor creative ways to mitigate losses creates nu-ances in economic analysis that need to berecognized when evaluating the economic im-pacts of nonindigenous forest pests. Althoughthese nuances typically demand greater rigorin estimating economic impacts, we argue thatthe theoretical foundation underlying such ap-proaches makes them most suitable for policyanalysis.

A particularly vexing issue in the economicanalysis of nonindigenous forest species con-cerns the distinction between the value of cap-ital accounts and changes in economic wel-fare. Microeconomic theory, which provides thefoundation for economic welfare analysis, is pri-marily concerned with understanding trade-offs among economic variables and how de-cisionmakers respond to changes in economicand environmental conditions (this forms thebasis for marginal analysis). From an economicwelfare perspective, economic values for Na-ture are determined by the trade-offs made by

individual economic agents, such as how muchone would be willing to sacrifice to preserve anatural resource in its current condition relativeto some altered condition. Although previousstudies have sought to estimate the economicvalue of nature without reference to alternativestates of nature (Costanza et al. 1997), this ap-proach has been criticized for failing to considereconomic trade-offs as the basis for economicvaluation (Bockstael et al. 2000). Among the nu-ances of individual economic behavior that en-rich, and complicate, economic analysis of for-est damages is the tendency for people to seeksubstitutes for resources that have been or willimminently be damaged. For timber, this couldinvolve the substitution of alternative speciesby timber growers or by wood-using firms, orthe substitution of salvaged timber for greentimber in the marketplace. Likewise, in a non-market context, residential landowners couldsubstitute alternative species for species dam-aged by forest pests. Substitution of one good orservice for another adds an important dynamicto economic analysis that needs to be recog-nized when evaluating the economic value ofecosystems.

To illustrate this point, consider the follow-ing juxtaposition between the capital valueof standing chestnut timber and the sug-gested economic behavior for mitigating losses.Based on reports from governmental agen-cies in Pennsylvania, West Virginia, and NorthCarolina, the value of standing chestnut timberat risk of mortality from chestnut blight in thosestates was estimated to be about $82.5 millionin 1912 (Anagnostakis 1987). In current (2007)dollars, this amount represents roughly $1.7 bil-lion in standing timber value. Although this isa substantial sum of money, it may very welloverstate the market value of timber lost to thedisease in those states if forest owners followedthe advice offered by the assistant director ofthe New York Botanical Gardens: “Utilizationis the big issue. See that you are advised of theprogress of the disease, appropriating moneyfor this if necessary, and market your timber asit approaches. Be businesslike and accept the


inevitable in time to make the best of it” (Dr.W.A. Murrill, New York Times, 1912). Busi-nesslike behavior, such as preemptive loggingof chestnut stocks, mitigates economic losses byliquidating some of the accounting value be-fore trees are killed (Keever 1953). Further, stateforesters in the affected areas advised landown-ers who were not able to harvest live trees tosalvage the value they could from trees killedby the blight (Anagnostakis 1987). This actionwould further mitigate the loss of accountingvalue. Economic behavior drives a wedge be-tween accounting values and the change in eco-nomic welfare.

In North America, two countrywide stud-ies have been conducted that provide estimatesof the aggregate economic impacts of forest-invasive species. Both studies conflate account-ing value and economic loss. The most widelycited study providing estimates of aggregateeconomic damages due to nonindigenous forestpests is Pimentel et al. (2000), who suggest thateconomic damages arising from nonindigenousforest pests in the United States are on the or-der of $4.2 billion annually. This estimate isbased on two critical assumptions: (1) forestpests reduce overall timber productivity by 9%per year, and (2) nonindigenous forest insectsand diseases account for 30% of the damagecaused by all forest pests. We suspect that theestimate of aggregate damage is biased for sev-eral reasons. First, the authors used account-ing methods that do not account for economicbehavior and are not consistent with microeco-nomic theory. Second, impacts are measured infinal product markets, not markets for timberinputs. Third, the authors do not account fornonmarket economic values.

Colautti et al. (2006) evaluated economiclosses due to nonindigenous forest insect anddiseases in Canadian forests. They employedthe price-times-quantity method by assemblinga list of 16 nonindigenous invasive species af-fecting Canadian ecosystems, and obtainingestimates of the proportional loss of resourceproduction associated with each pest. As notedby the authors, the productivity loss estimates

used in their empirical model are highly bi-ased, as they were based on small-scale, short-term studies. They attempted to offset thisbias by ranking, from smallest to largest, theloss proportions associated with each pest. Bytreating the median, quartile, and half-quartileas estimates of the maximum, midrange, andminimum levels of productivity loss, they ob-tained alternative, but not necessarily unbi-ased, estimates for reduced yields. Applyingthis technique to forest ecosystems, the authorsestimate the loss in value to forest products re-sulting from four nonindigenous insects (Asianlonghorn beetle, balsam woolly adelgid, brownspruce longhorn beetle, and gypsy moth) andthree nonindigenous pathogens (Dutch elm dis-ease, scleroderris canker, and white pine blisterrust) to be $9.6 billion (ranging from $7.7 bil-lion to $20 billion). Because their estimates donot account for “businesslike behavior” takento mitigate potential losses, because values aremeasured in final product markets, and becausethey did not quantify nonmarket economic im-pacts, we conclude that their estimated impactsare susceptible to multiple sources of bias.

Turner et al. (2004) estimated the costs andbenefits of biosecurity and forest health re-search to the forest growing industry and urbanforest estate in New Zealand. Because the tim-ber supply and demand relationships neededto estimate economic welfare impacts have notbeen estimated for the New Zealand forest sec-tor, they performed a linear aggregation basedupon estimates of yield decline and averagestumpage prices. Although this method for es-timating timber-sector impacts is more defen-sible than applying values from final productmarkets, it does not represent a change in ei-ther timber producer welfare (the area abovethe supply curve and below price) or wood-products consumer welfare (the area below tim-ber demand and above price). Thus, it is notconsistent with microeconomic theory. The au-thors also included accounting measures forcosts associated with eradication and controlprograms, household expenditures to controlforest pests, and expenditures to replace trees in


the urban forest. Projecting impacts to the year2070, they concluded that the net present valueof economic impacts associated with a new for-est pest range from $3.8 billion to $20.3 billion,depending on the discount rate used.

In contrast to the accounting studies re-ported by Pimentel et al. (2000), Turner et al.

(2004), and Colautti et al. (2006), Holmes(1991) demonstrated how forest-sector marketmodels can be used to measure the changesin economic welfare due to catastrophic pestoutbreaks using timber supply-and-demandcurves. This approach is consistent with mi-croeconomic theory and captures the behav-ioral responses made by timber producers andwood-using consumers as economic conditionsadjust to changes in forest health. The changesin economic welfare measured with the forest-sector market approach are consistent with Justand Hueth (1979), who show how the changesin profits within a vertically integrated indus-try (such as the forest-products sector) can bemeasured using supply-and-demand curves forraw inputs. The forest-sector market-modelapproach to measuring changes in economicwelfare was also used by the USDA ForestService (Holmes and Lee 1991) to evaluatechanges in the economic welfare of timber pro-ducers and wood-products consumers if non-indigenous pests were introduced from tim-ber trade with the Soviet Far East. Potentialnet changes in producer and consumer wel-fare over the period 1990 to 2040 due to in-sect defoliators were estimated to range from$35 billion to $58 billion using a 4% discountrate.

Nonmarket Economic Losses

A potentially enormous source of bias in ag-gregate estimates of the economic losses due tononindigenous forest pests is the failure to ac-count for nonmarket values. These values en-compass a suite of ecosystem services providedby trees, groves, stands, and forests (such as wa-ter filtration, flood mitigation, wildlife habitat,carbon sequestration, and landscape aesthetics)

that are not directly traded in markets. Hun-dreds of nonmarket valuation studies seeking toquantify virtually all dimensions of forest goodsand services have been conducted over the pastseveral decades (Sills and Abt 2003). However,only a limited number of these have focusedattention specifically on the economic impactsof forest insects and diseases. The results todate suggest that the residential impacts of for-est pests are large and might dominate othercategories of market and nonmarket impactsin developed countries (Leuschner et al. 1996;Reinhardt et al. 2003; Turner et al. 2004; Nowaket al. 2006).

Forest landscapes are highly valued whenthere is a confluence of an advantageous spa-tial location and the presence of biological at-tributes that satisfy human needs. Forests in fa-vorable spatial locations that provide desirablebiological attributes are the landscapes mostlikely to be modified for human needs. The rel-ative scarcity of favored private forest locations,relative to more abundant, remote and/or lessbiologically desirable forest areas, conveys eco-nomic value. Consequently, we would expectthat forested residential landscapes, in general,are more highly valued—per unit area—thanthe landscapes that are traditionally catego-rized as forest (e.g., private and public timber-lands and nonindustrial private forest lands).Therefore, invasion of these modified forestlandscapes is likely to impose the greatest lossesin nonmarket values. At the same time, thesemodified landscapes are historically more likelyto be invaded, possibly precisely because theyhave been modified and therefore have lowerbiotic resistance, and more certainly because ofproximity to transportation hubs and the resul-tant propagule pressure.

The nonmarket costs of invasive species havebeen studied in an economic welfare-theoreticcontext using both direct questions about will-ingness to pay (stated preference methods) andevidence from behavior in related markets (re-vealed preference methods). The most com-monly used approach is the contingent valu-ation method (CVM). In this survey method,


respondents are asked their willingness to payfor a change in conditions in a constructed(hypothetical) market. CVM has been used tounderstand the full cost of invasive species—including aesthetics and other unpriced ecosys-tem services—in residential areas as well aspublic lands. For example, several CVM sur-veys have elicited willingness to pay for bettercontrol of gypsy moth in residential landscapes(Jakus 1992; Miller and Lindsay 1993; Mac-Donald et al. 1997). Leuschner et al. (1996) re-lied on this literature (specifically University ofMaryland, 1988) for their conclusion that resi-dential costs were much higher than any othercomponent of costs.

The contribution of landscape attributes toprivate-property values can be studied usingan economic welfare-theoretic method knownas the hedonic property-value method. Thismethod has been used to estimate the value thattrees contribute to the sale values of homes fromthree perspectives: (1) yard trees contribute toproperty values, (2) forest preserves near res-idential neighborhoods convey value, and (3)trees in the general forest matrix surroundingresidential areas convey value. These studies in-dicate that trees contribute, roughly, from 2% to5% to the private-property value of private res-idences (Morales 1980; Anderson and Cordell1988; Garrod and Willis 1992; Dombrow et al.

2000; Tyrvainen and Mietinnen 2000). Con-sequently, we would expect that nonindige-nous forest pests that cause a visible loss inforest health (Sheppard and Picard 2006), orthat ultimately cause tree mortality, would in-duce a loss of property values in residentialareas.

Although evidence of the impact of non-indigenous forest pests on residential propertyvalues is limited, the study by Holmes et al.

(2006)—also reported in Huggett et al. (2008)—indicates that private-property value losses dueto infestations of the hemlock wooly adelgid(Adelges tsugae) in residential areas are large andthat spillovers from properties with damagedtrees to neighboring properties are evident.Values reported in those studies indicate that

losses to residential property values can be asmuch as $20,000 per acre of dead and dyinghemlock. Impacts of this magnitude are muchlarger than comparable losses in timber valueon well-stocked, old-growth eastern hemlockstands.

In addition to the economic losses borneby private-property owners in residential areas,forest pests can cause substantial nonmarketeconomic losses on public forest lands (Walshet al. 1990; Haefele et al. 1991). Household will-ingness to pay to avoid nonmarket economiclosses, as measured by CVM studies, is ad-ditive across the relevant population of con-sumers because forest protection is a publicgood (Holmes et al. 2008a). Before aggregat-ing nonmarket values, however, two questionsmust be answered. First, who cares about thechange in nonmarket goods and services (whatis the extent of the market) (Smith 1993)? Sec-ond, are substitute goods and services availablethat would cause aggregation to be nonlinear(Bockstael et al. 2000)? Given these considera-tions, even conservative estimates of aggregatewillingness to pay can be large and should notbe ignored. For example, Moore (2008) used aCVM study of households in North Carolinato evaluate willingness to pay by residents ofthat state for a 3-year program to control thehemlock woolly adelgid in the Great SmokyMountain National Park and neighboring U.S.Forest Service lands. He found that householdwillingness to pay is about $50/year. Sum-ming this value across all households in NorthCarolina results in aggregate value of protec-tion programs that exceed $100 million peryear for the 3-year program. This value couldbe considered a lower-bound estimate of thetotal value of hemlock protection programs be-cause it is likely that households in other statesthat either use or are familiar with these pub-lic lands would also have a positive willingnessto pay. The values reported by Moore (2008)are consistent with other CVM studies of for-est protection programs reviewed by Krameret al. (2003), who concluded that the total non-market economic value derived from protecting


the health of public forests is largely due to theknowledge that healthy forest ecosystems ex-ist (existence value) and will be maintained forfuture generations (bequest value).

Scaling-up Microeconomic Values

Although a number of theoretically con-sistent microeconomic models of nonindige-nous forest-pest impacts have been reported inthe literature, and should form the foundationfor economic analysis of nonindigenous forestpests, a major difficulty associated with the useof microeconomic studies to estimate aggregateeconomic impacts is the problem of extrapola-tion. This is true whether we are trying to esti-mate the aggregate economic impacts due to asingle nonindigenous forest pest or whether ag-gregate estimates are sought for the entire suiteof nonindigenous forest pests. The aggregationproblem faces two major challenges. First, ex-isting microeconomic studies reported in theliterature are a sample of some underlying pop-ulation. Extrapolation of estimates based onmicrostudies must then have a clear idea of thenature of the population from which the sampleis drawn, and the spatial extent of the impactsshould be circumscribed. Second, the scalingfrom microeconomic to aggregate economicimpacts may not be linear, and interactions,either in the marketplace or for nonmarket val-ues, may be critical.

The aggregation of microeconomic studiesacross relevant geographic areas will be sim-plified by focusing attention on the transientecological and economic impacts that occurwhile these systems adjust to a biological in-vasion. The idea that economic variables oper-ating on slow-time-scales can be treated as con-stants, allowing one to focus on fast-time-scaleeconomic dynamics, was presented in the sem-inal paper by Simon and Ando (1961). Theyrecognized that aggregation in dynamic sys-tems can be greatly simplified by decomposingall of the interactions in the economy into asmall number of sectors, within which interac-

tions can be studied (on the fast-time-scale) asif the slow interactions between sectors did notexist. For forest protection, this approach sug-gests that separate accounts can be establishedfor sectors such as timber markets, residentiallandscapes, and public forests. Within each sec-tor, the fast-time-scale dynamics can be studiedand the interactions (such as substitution pat-terns) can be identified. Further, by limiting thetime period over which intrasectoral dynamicsand interactions are studied to, say, 10 years,the longer-term intra- and intersectoral inter-actions can be held constant.

Once the economic system has been decom-posed into the relevant sectors for analyzingthe economic impacts of nonindigenous forestpests, aggregation of the fast-time-scale vari-ables will necessitate the development of mod-els for each sector. The goal of the models isto link the available microeconomic studies tothe population from which they were drawn.In the case of nonindigenous forest species, ag-gregation will generally be across geographicareas representing the distribution of hostspecies and across the population of people whoare affected by the specific changes in foresthealth.

In the case of timber damages from a non-indigenous forest pest, extrapolating from a sin-gle producer to the level of regional damagescould proceed using forest-sector market mod-els, as reviewed above. Scaling-up of nonmar-ket economic values could be accomplishedusing benefit-transfer models (Rosenburg andLoomis 2003). The basic idea of a benefit trans-fer is to extrapolate the results of a case studyto other sites of policy interest. Perhaps thebest known method of benefit transfer is meta-analysis, in which statistical methods are usedto relate economic values reported in a set ofcase studies to a set of explanatory variables thatvary across the case studies (Smith and Huang1995). Statistically significant explanatory vari-ables that can be linked to those same variablesat other geographic locations can then be usedto transfer values from the case studies to othergeographic areas with similar characteristics.


We expect that too few microeconomic stud-ies have been reported to conduct explicit meta-analysis of economic damages from forest-invasive species. In this case, we suggest thatspatial analysis, using Geographic Informa-tion System (GIS) tools, might be productivelyused to extrapolate economic damage estimatesobtained from microeconomic studies to themesoscale (Eade and Moran 1996; Batemanet al. 2002; Holmes and Smith 2007). In partic-ular, the population from which documentedcase studies have been sampled might be iden-tified in a two-step process: (1) list a set ofsalient characteristics that are associated withcase-study sites, and (2) use GIS tools to iden-tify locations with similar characteristics at thelandscape scale. By linking economic values ob-tained at the study site with the set of locationsidentified at the landscape scale, values can betransferred from study sites to other sites of pol-icy interest.

We anticipate that, having extrapolated eco-nomic damage estimates from case studies toareas of policy relevance, a distribution of eco-nomic impacts will be observed, and that theoriginal case studies might well be among theset of worst-case damages. This is because eco-nomic case studies often focus on bad- or worst-case scenarios in order to detect significanteconomic impacts due to the availability ofdata and the power of statistical tests. A rel-atively simple, and conservative, approach toaggregation within the specified economic sec-tors would be to sum the damage estimates atthe bad- and worst-case geographic locationsacross the landscape.

Finally, damages estimated within specifiedeconomic sectors at the landscape scale couldbe summed across the ensemble of most-damaging forest pests to arrive at a conser-vative estimate of aggregate economic impact.We warn that economic sectors should be keptseparate and not aggregated if the underlyingeconomic logic used to describe economic im-pacts differs across sectors. Nonetheless, thisprocedure could provide estimates of the eco-nomic losses incurred within sectors and iden-

tify the pests that are most damaging within thesectors.

We speculate that this approach to obtain-ing conservative, lower-bound estimates withinprescribed economic sectors would be emi-nently reasonable if economic damages aredistributed following a heavy-tailed distribu-tion. This speculation is based on a particu-larly intriguing result reported in previous stud-ies showing that the size distribution of somewell-known forest disturbances such as wild-fires (Malamud et al. 2005; Holmes et al. 2008b)and bark-beetle epidemics (Gamarra and He2008) follow power laws. Power laws are un-usual in that they are self-similar across scales,and might represent the behavior of complexadaptive systems (Chave and Levin 2003). Thisproperty gives power-law distributions heavytails and suggests that most of the damagefrom forest disturbances occurs in a few, rareevents. In general, power laws have the prop-erty that the magnitude of the sum of addendsis equal in magnitude to the largest of manyaddends (Mandelbrot 1997). If damages fromnonindigenous forest pests follow power-lawdistributions, then the problem of scaling-upfrom case studies to aggregate estimates may besimplified by focusing attention on the few caseswhere the largest impacts are anticipated—because it is these cases that would dominatethe sum of the economic impacts.

Finally, to continue our speculation, if forestdamages follow heavy-tail distributions, thenthe past may not provide a reliable guide forthe future. Imagine for a moment an economicteam given the mandate to estimate the poten-tial economic losses from nonindigenous for-est pests in 1904—the year before chestnutblight was first identified in the United Stateson chestnut trees in the New York ZoologicalGarden (Anagnostakis 1987), and 2 years be-fore white pine blister rust was discovered onpine seedlings imported from Europe (Maloy1997). Although gypsy moth was present ineastern U.S. forests at that time, there was con-siderable optimism that it could be controlled(Popham and Hall 1958). If the analysts had


summed up all of the economic damages tothat point caused by nonindigenous forest pestsand divided by the number of years of damageto arrive at an estimate of the average annualimpact, they would not have come close to pre-dicting the catastrophic levels of forest damageobserved during the subsequent decades. Like-wise, it may be presumptuous for economic an-alysts today to assume that past damages fromnonindigenous forest pests represent the worstkind of pest behavior by portraying averagedamages from historical events as typical.

Concluding Remarks

The economics of forest-pest invasions areparticularly complex because (1) invasions haveboth important economic causes and conse-quences; (2) once established, the ecologicaland economic impacts of forest-invasive speciesmay be irreversible; and (3) knowledge is lim-ited regarding which nonnative forest pests willultimately cause catastrophic damage. Govern-ment policies that address the pest-invasionproblem must balance the economic factorscausing invasions (e.g., trade) with the economicimpacts of invasions. At present, the economiccosts and losses associated with forest-pest in-vasions are borne by taxpayers and private for-est landowners. In theory, policies that shiftthe costs and losses induced by invasive pestsonto the responsible economic sectors (e.g., byimposing tariffs) should result in an optimalreduction in risk, given the balance of costsand benefits. Unfortunately, substantial politi-cal and sociological barriers prevent the inter-nalization of these spillover effects and other ap-proaches may be necessary. The PrecautionaryPrinciple, which emerged in the 1992 Confer-ence of Rio on Environmental Development,provides a rationale for applying cost-benefitanalysis and discretionary judgment in policydevelopment where scientific knowledge is lack-ing regarding the impacts of economic activ-ities on the environment. Although the Pre-cautionary Principle remains controversial, its

application may be justified in cases where it issupported by the weight of scientific evidence(Foster et al. 2000).

Whether for the development of interna-tional trade policy or on-the-ground for foresthealth protection programs, reliable estimatesof the economic impacts from invasive forestpests are needed to inform policy making at alllevels of government. Due to a paucity of dataand underlying microeconomic analysis thatcould provide a basis for estimating macrolevelparameters, few attempts have been made toestimate countrywide economic damages fromnonindigenous forest pests. Although existingestimates are useful in providing a rough ideaof the magnitude of economic threats, new ap-proaches are needed.

In this chapter, we argue that economic anal-ysis needs to be consistent with economic the-ory. People respond to factors that threatentheir economic well-being, and economic sys-tems adjust to changes in ecosystem dynamics.In some instances, people take actions to mit-igate damages, whether that means applyingpreventive treatments to protect trees, preemp-tive harvesting of timber, salvaging dead tim-ber, removing hazard trees, or substituting al-ternative species in the production process oron the landscape. These types of actions ofteninvolve transfers between various market par-ticipants. In other cases, forest damages can-not be prevented and losses to aesthetic values,recreational opportunities, or wildlife habitatare incurred.

Previous countrywide analyses of the eco-nomic impacts of forest-invasive species havefocused primarily on productivity losses in thewood-products sector of the economy. Thesestudies are biased because of the methods usedto estimate impacts to the forest-products sec-tors and because impacts on the suite of non-timber ecosystem services are not adequatelyaddressed.

Our review of existing microeconomic stud-ies suggests that total nonmarket economic im-pacts from invasives might exceed the valueof timber losses. Nonindigenous forest species


are typically introduced via ports-of-entry intoareas of high population density, and highlypopulated areas are often located in or nearforested landscapes that are used for residen-tial and recreational uses. Thus, we hypothesizethat large nonmarket economic impacts can oc-cur in forested landscapes that are modified forhuman uses or are located close to populationcenters. Nonmarket economic impacts on theaesthetic value of trees on residential properties,and on the value of protecting forest ecosystemson public land need to be included in damageassessments, to the extent possible.

Aggregate estimates of economic impactsfrom nonindigenous forest pests should use ex-isting microeconomic studies as a foundation.The aggregation problem can be greatly sim-plified by focusing on fast-time-scale variablesand treating slow-time-scale variables as con-stant. Independent economic sectors should beidentified, and the transitory economic dynam-ics within those sectors, including substitutionpatterns and other interactions, should be stud-ied. This can be accomplished by construct-ing models for each of the sectors identified.Forest-sector market models can be used to es-timate changes in economic welfare for tim-ber producers and wood-products consumers.Benefit-transfer models can be used to aggre-gate nonmarket values across geographic areasand the population of people who are impactedby changes in ecosystem dynamics.

Aggregation of microeconomic studies to thelandscape scale can be further simplified by fo-cusing attention on the most damaging non-indigenous forest pests. Microeconomic studiesare typically conducted where impacts are largeenough to be detected by economic methods.If the damages from nonindigenous forest pestsare concentrated in the sense that most dam-ages occur in a few instances, then the extrap-olation from case studies to the most damagingreplicates on the landscape may constitute areasonable lower bound to estimates of aggre-gate damage from specific pests.

This idea may be equally applicable to theestimation of countrywide economic damages

from forest-invasive species. If most invasivespecies are innocuous, and a few species arehighly consequential, then the magnitude of ag-gregate economic damages from all nonindige-nous forest pests is concentrated and mightreasonably be estimated by the magnitude ofdamages associated with the worst-case exam-ples of individual nonindigenous forest pests.Linking theoretically sound market and non-market economic damage estimates with con-servative procedures for aggregation acrossscales would provide a sound foundation for thedevelopment of economic policies and manage-ment strategies.

Acknowledgments

This work was conducted as part of the Eco-logical and Economic Impacts of NonnativeForest Pests and Pathogens in North AmericaWorking Group supported by The Nature Con-servancy and The National Center for Ecolog-ical Analysis and Synthesis, a center fundedby NSF (Grant #DEB-0553768), the Univer-sity of California, Santa Barbara, and the Stateof California. Additional support was also pro-vided for JEA, the NCEAS Associate in theGroup. We thank our colleagues J. Englin, B.Leung, R. Haight, D. McCullough, S. Frankel,T. Stohlgren, E. Fleishman, C. Chivers, and K.Britton for valuable discussions. We are grate-ful to Gretchen Daily, Rick Ostfeld, and RobertHuggett, Jr. for comments on the manuscript.

Conflicts of Interest

The authors declare no conflicts of interest.

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