Disaggregated economic impact analysis incorporating ecological and social trade-offs and techno-institutional context: A case from the Western Ghats of India

- We propose disaggregated analysis of economic impacts as an alternative to benefit-cost analysis or just valuation.
- This approach is applied to the case of a wildlife sanctuary in Southern India considering only monetizable impacts.
- The shift from a lower to higher conservation status generates a variety of ecological trade-offs, including dis-benefits.
- Costs and benefits vary across stakeholders - some are net gainers and others losers in economic terms.
- But the results are context-specific and sensitive to assumptions about technology, institutions and ecological dynamics.

Economic valuation of ecosystem benefits and their aggregation in a benefit-cost analysis (BCA) framework is the norm in mainstream environmental economics. But valuation and BCA have also attracted criticisms. 'Internal' criticisms point to the absence of alternative scenarios in valuation, overlooking of ecological trade-offs and dis-services, and inattention to context. Others criticize aggregation across diverse stakeholders and the problem of non-monetizable benefits, and dismiss BCA as fatally flawed. They suggest approaches such as deliberative decision-making and multi-criteria analysis. We propose a middle path that uses the strengths of economic analysis for decision support while avoiding the pitfalls. We disaggregate economic impacts by stakeholder groups, link ecosystem changes to benefits as well as dis-benefits, and examine how socio-technological context shapes the magnitude of economic impact. We illustrate this approach by studying the impact of creating the Biligiri Rangaswamy Temple wildlife sanctuary in the Western Ghats forests of southern India. Our analysis shows that while some stakeholders are net beneficiaries, others are net losers. Changes in forest rights, irrigation technologies, and ecosystem dynamics influence the magnitude of benefits and sometimes convert gainers into losers. Such disaggregated analysis can provide useful information for deliberative decision-making and important academic insights on how economic value is generated.