This paper attempts to develop a dynamic model of optimal biodiversity preservation in a stylized ecosystem. Species richness (number of species) is used as a measure of diversity and its interactions with the resource stock, consumptive extraction and preservation efforts are explored using a two-state variable optimal control model. The analysis extends to the implications of a random threshold in species richness and the relationship between ecological and economic stability conditions. Dynamic paths and equilibrium characteristics are illustrated using numerical techniques.

The environmental Kuznets curve (EKC) hypothesis proposes that there is an inverted U-shape relation between environmental degradation and income per capita. This has been taken to imply that economic growth will eventually redress the environmental impacts of the early stages of economic development. The literature on this issue has developed rapidly over the last few years. This paper examines whether progress has been made on both understanding the EKC phenomenon and on addressing the various criticisms raised against some of the empirical studies and their interpretation in the policy literature. Though basic EKC studies continue to be carried out, recent work has focused on the effect of a variety of conditioning variables on the environmental impact-GDP relationship. Some attempts have also been made to examine the history of the relationship in individual countries. The econometric techniques used have improved. However, empirical decompositions of the EKC into proximate or underlying causes are either limited in scope or non-systematic, and explicit testing of the various theoretical models has not yet been attempted.

The use of trade measures for environmental purposes has given rise to a series of economic and legal issues. These are explored in the paper through an examination of the United States embargo on imports of shrimp from several countries for environmental reasons, currently being considered by a WTO dispute settlement panel. The paper examines the effect on competitiveness of compliance with the higher standard imposed by the US, the appropriateness of universalizing those standards, and whether the US action is consistent with WTO rules. The major findings are that, in the case of Trinidad, (a) the competitiveness of the affected fishermen was reduced, (b) the US regulation was inappropriate to the conditions which prevailed in the shrimp industry there, and (c) the US action was WTO inconsistent given current interpretation of WTO rules. The paper anticipates that the current case could lead to a review of WTO rules, in favour of the environment.

One of the first lessons that students of cost-benefit analysis (CBA) learn is to ask whether projects or policies which they are studying generate additional benefits or costs, relative to the status quo. They are also told to be very careful in defining the project/policy which is the subject of their analysis. In my view, the ecological concept of resilience fails the CBA test, when applied to the study of economic and social systems, because it offers no additional insights to those we have already, and appears to be poorly defined.

Levin et al. deliver a sweeping lecture on the state of nature and society. They point out that economic and ecological systems are linked, this linkage is complex, and that in the litany of environmental disasters that awaits us ‘none can be treated by traditional markets, or regulatory policies.’ Markets fail because they do not aggregate information accurately; corrective policies fail too because lobbying efforts serve to polarize rather than galvanize public debate. Policymakers, social planners, and researchers are asked to rethink their typical conduct, and instead focus on the construction of flexible and adaptive institutions that can accommodate the uncertain future in a way that maintains human welfare. Trust and intellectual guidance are the ties that bind a better world to these undefined, but resilient new institutions.

We, as a society, find ourselves confronted with a spectrum of potentially catastrophic and irreversible environmental problems, for which conventional approaches will not suffice in providing solutions. These problems are characterized, above all, by their unpredictability. This means that surprise is to be expected, and that sudden qualitative shifts in dynamics present serious problems for management. In general, it is difficult to detect strong signals of change early enough to motivate effective solutions, or even to develop scientific consensus on a time scale rapid enough to allow effective solution. Furthermore, such signals, even when detected, are likely to be displaced in space or sector from the source, so that the motivation for action is small. Conventional market mechanisms thus will be inadequate to address these challenges.

Levin et al. give us a sweeping vision of the notion of resilience and the response of management. In these comments I wish to discuss the daunting task of quantification of the resilience-based management issues raised by Levin et al. I also wish to suggest directions of future research.

I am in agreement with the main thesis of the paper by Levin et al., namely that complex, non-linear systems, whether ecological or socioeconomic, do not lend themselves to management protocols based on assumptions of linear, globally stable, single equilibrium systems. As the authors point out, policy makers need a better understanding of the concept of resilience. Furthermore, it is especially important for them to understand the crucial elements for maintaining resilience in the integrated ecological-socioeconomic resource use systems (the forests, rangelands, and agro-ecosystems) on which most human welfare depends.

Resilience is turning out to be a resilient concept. First proposed way back in the 1970s in the context of ecosystem dynamics, it was then dissected and elaborated–spawning terms such as malleability, elasticity, hysterisis, inertia, resistance, amplitude–as ecologists struggled to make it into something measurable, usable, and distinct from its notoriously slippery predecessor ‘stability’.

The modern study of stability in ecology can be said to have begun with the appearance of ‘Fluctuations of Animal Populations and a Measure of Community Stability’, by R.H. MacArthur in 1955. Since the publication of this influential paper, ecologists have investigated the properties of a number of different stability and stability-related concepts; the concepts of persistence, resilience, resistance, and variability readily come to mind. Of these various concepts, the concept of resilience itself appears to have been rather resilient. Indeed, as Neubert and Caswell (1997) and others have noted, today there is a vast literature on resilience. However, it is important to note that this literatur—to the best of my knowledge—has been primarily ecological in nature. In other words, the concept of resilience originated in ecology, and this concept has been applied and studied primarily in the context of ecosystems.

One of the most interesting and potentially useful outcomes of recent collaboration between natural and social scientists concerned with the sustainability of jointly determined ecological-economic systems is the application of the ecological concept of resilience. In its broadest sense, resilience is a measure of the ability of a system to withstand stresses and shocks – its ability to persist in an uncertain world. For many policy-makers, however, the concern that desirable states or processes may not be ‘sustainable’ is balanced by the concern that individuals and societies may get ‘locked-in’ to undesirable states or processes. Many low-income countries, for example, are thought to have been caught in poverty traps, and poverty traps have since been seen as a major cause of environmental degradation (Dasgupta, 1993). Other examples of ‘lock-in’ include our dependence on hydrocarbon-based technologies, or the institutional and cultural rigidities that stand in the way of change (Hanna, Folke, and Mäler, 1996). Such states or processes are too persistent.