Understanding the True Cost of Land-Use Projects

last updated 2019-10-02

Update: My team’s paper earned the coveted Outstanding rating! Further, our paper won the Rachel Carson award, which “is presented to a team selected by the Head Judge of ICM Problem E for excellence in using scientific theory and data in its modeling.” Over 4,800 collegiate teams from around the world were competing in Problem E, so I am honored that our work was recognized as the best!


BLUF: My team of two other college sophomores competed in an academic competition involving 99 hours of modeling and paper writing. We ended up cranking this paper out: “Ecological Services Valuation Model: Understanding the True Cost of Land-Use Projects”. There is nothing really fancy going on with the math we came up with. We priced certain features of the Commons that people tend to care about at the cost of replacement, and for ecological services that were not particularly replaceable, we priced the Quality-Adjusted Life Years lost at the cost of replacement. Where I think we did wel is justfying our model with other theories like Georgism and hedonic utilitarianism, and connected this with real-world, adaptable application.


Here’s the introduction:

Our team was hired to tackle one of the greatest problems remaining in the 21st century: how do we prevent the “tragedy of the commons?” Specifically, our task was to “create an ecological services valuation model to understand the true economic costs of land use projects when ecosystem services (ES) are considered.” We discovered that answering this question is key for governments to rent land to entities for land-use projects at a price necessary to preserve the value of ES owned by all.

In our pursuit of creating a model, we began by researching the philosophical underpinnings of value. We decided that well-being, based off conscious-subjective experiences, is the only good which is intrinsically valuable. While we maintain a degree of moral uncertainty on this matter, we ultimately decided to base our valuation of ecosystem services from their expected impact on well-being of conscious creatures, most especially humans.

We then explored the economic systems that best support our value-theory, and settled on Georgism, an economic philosophy which asserts that, while individuals ought to own the fruits of their own labor, natural resources are a public good [1]. Then, we researched the possible frameworks we could use to price ecosystem services, and determined the price should reflect the cost of artificially replacing ES. In other words, the value of an ES depends on the price to replace its services. For services that are irreplaceable, we propose a method of converting lost environmental services into Quality-Adjusted Life Years (QALYs), which may then converting [sic] into dollars based off the rate of producing QALYs.

We explored preexisting models for pricing the ES affected by land-use projects, and found several highly-developed, but difficult to apply models. To solve for this, we sought to create a model which balances accurate valuation with ease of applicability, while still maintaining our values of maximizing well-being. Thus, we designed a general model with only the most applicable variables.