Abstract
Biologists point out that biodiversity loss contributes to promote the transmission of diseases. In epidemiology, this phenomenon is known as dilution effect. Our paper aims to introduce this effect in an economic model where the spread of an infectious disease is considered. More precisely, we embed a SIS model into a Ramsey model (1928) where a pollution externality coming from production affects the evolution of biodiversity. Biodiversity is assimilated to a renewable resource and affects the infectivity of the disease (dilution effect). A green tax is levied on production at the firm level to finance depollution according to a balanced budget rule. In the long run, a disease-free and an endemic regime are possible. We focus only on the second case and we find that the magnitude of the dilution effect determines the number of steady states. When the dilution effect remains low, there are two cases depending on the environmental impact of production: (1) a low impact implies two steady states with high and low biodiversity respectively; (2) a large impact rules out any steady state. Conversely, when the dilution effect becomes high, a (unique) steady state always exists: a strong dilution effect works as a buffer and prevents the human pressure from being lethal for biodiversity in the long run. Moreover, under a low dilution effect, a higher green tax rate always impairs biodiversity at the low steady state, while this green paradox is over under a high dilution effect. In the short run, we show that a limit cycle can arise around the high biodiversity steady state when the dilution effect is low. Surprisingly, the limit cycle is preserved under a high dilution effect. In other words, even if a strong dilution effect preserves the biodiversity in the long run and prevents the economy from the green paradox, it does not shelter the economy from the occurrence of biodiversity fluctuations.
Similar content being viewed by others
Notes
See [20] among others.
Price-taker producers share the same technology. Because of the constant returns to scale, their individual profit maximization is equivalent to our aggregate profit maximization.
Since γ and β are endogenously determined by the biodiversity level, nothing guarantees that \(\gamma \left (B\right ) <\beta \left (B\right ) \). The following section studies the case where this inequality holds. In Section 6, we provide a numerical example to show that this case is relevant.
See for instance [26].
In this economy, τ captures the public air protection expenditures. Indeed G/Y = τY/Y = τ = 0.2%. According to the OECD (2016) Environmental Performance reviews for France (p. 149) [27], the public air protection expenditures amount to less than 5 billions of euros (2013 prices), which represents less than 0.25% of France GDP. Then, our calibration for τ is in accordance with data.
In economic terms, ε < 1 means that consumption and biodiversity are complements in the household’s preferences. As explained in the previous section, such a complementarity can generate a limit cycle through a Hopf bifurcation, that is, fluctuations of biodiversity.
To this purpose, we use the MATCONT package for MATLAB.
The reader is referred to pages 307 and 349 in [21] for the generalized Hopf bifurcation and the double-Hopf bifurcation respectively.
References
Akazawa, M., Sindelar, J., Paltiel, D. (2003). Economic costs of influenza-related work absenteeism. Value in Health, 6, 107–115.
d’Autume, A., Hartwick, J.M., Schubert, K. (2010). The zero discounting and maximin optimal paths in a simple model of global warming. Mathematical Social Sciences, 59, 193–207.
Ayong Le Kama, A. (2001). Sustainable growth, renewable resources and pollution. Journal of Economic Dynamics & Control, 25, 1911–1918.
Barnosky, A.D., Matzke, N., Tomiya, S., Wogan, G.O., Swartz, B., Quental, T.B., Marshall, C., McGuire, J.L., Lindsey, E.L., Maguire, K.C., Mersey, B., Ferrer, E.A. (2011). Has the Earth’s sixth mass extinction already arrived? . Nature, 471, 51–57.
Bella, G. (2010). Periodic solutions in the dynamics of an optimal resource extraction model. Environmental Economics, 1, 49–58.
Bosi, S., & Desmarchelier, D. (2017). Are the Laffer curve and the green paradox mutually exclusive? Journal of Public Economic Theory, 19, 937–956.
Bosi, S., & Desmarchelier, D. (2019). Local bifurcations of three and four-dimensional systems: a tractable characterization with economic applications. Mathematical Social Sciences, 97, 38–50.
Bosi, S., & Desmarchelier, D. (2018). Limit cycles under a negative effect of pollution on consumption demand: the role of an environmental Kuznets curve. Environmental and Resource Economics, 69, 343–363.
Bosi, S., & Desmarchelier, D. (2018). Pollution and infectious diseases. International Journal of Economic Theory, 14, 351–372.
Bosi, S., & Desmarchelier, D. (2018). Natural cycles and pollution. Mathematical Social Sciences, 96, 10–20.
Civitello, D.J., Cohen, J., Fatima, H., Halstead, N.T., Liriano, J., McMahon, T.A., Ortega, C.N., Sauer, E.L., Sehgal, T., Young, S., Rohr, J.R. (2015). Biodiversity inhibits parasites: broad evidence for the dilution effect. PNAS, 112, 8667–8671.
Dean, J., van Dooren, K., Weinstein, P. (2011). Does biodiversity improve mental health in urban settings? Medical Hypotheses, 76, 877–880.
Fernandez, E., Pérez, R., Ruiz, J. (2012). The environmental Kuznets curve and equilibrium indeterminacy. Journal of Economic Dynamics & Control, 36, 1700–1717.
Fouad, A.M., Waheed, A., Gamal, A., Amer, S.A., Abdellah, R.F., Shebl, F.M. (2017). Effect of chronic diseases on work productivity: a propensity score analysis. Journal of Occupational and Environmental Medicine, 59, 480–485.
Goenka, A., & Liu, L. (2012). Infectious diseases and endogenous fluctuations. Economic Theory, 50, 125–149.
Goenka, A., Liu, L., Nguyen, M. (2014). Infectious diseases and economic growth. Journal of Mathematical Economics, 50, 34–53.
Hethcote, H.W. (2009). The basic epidemiology models: models, expressions for R0, parameter estimation, and applications. In Mathematical understanding of infectious disease dynamics, Lecture notes series, Institute for mathematical sciences, National University of Singapore, vol. 16, chapter 1.
Itaya, J.-I. (2008). Can environmental taxation stimulate growth? The role of indeterminacy in endogenous growth models with environmental externalities. Journal of Economic Dynamics & Control, 32, 1156–1180.
Keesing, F., Holt, R.D., Ostfeld, R.S. (2006). Effects of species diversity on disease risk. Ecology Letters, 9, 485–498.
Keesing, F., Belden, L.K., Daszak, P., Dobson, A., Harvell, C.D., Holt, R.D., Hudson, P., Jolles, A., Jones, K., Mitchell, C., Myers, S., Bogich, T., Ostfeld, R. (2010). Impacts of biodiversity on the emergence and transmission of infectious diseases. Nature, 468, 647–652.
Kuznetsov, Y. (1998). Elements of applied bifurcation theory. Springer, Applied Mathematical Sciences 112.
Kuznetsov, Y.A., Meijer, H.G.E., Al-Hdaibat, B., Govaerts, W. (2014). Improved homoclinic predictor for Bogdanov-Takens bifurcation. International Journal of Bifurcation and Chaos, 24, 1–14.
Lloyd-Smith, J.O., George, D., Pepin, K.M., Pitzer, V.E., Pulliam, J.R.C., Dobson, A.P., Hudson, P.J., Grenfell, B.T. (2009). Epidemic dynamics at the human-animal interface. Science, 326, 1362–1367.
Michel, P., & Rotillon, G. (1995). Disutility of pollution and endogenous growth. Environmental and Resource Economics, 6, 279–300.
Mitchell, R.J., & Bates, P. (2011). Measuring health-related productivity loss. Population Health Management, 14, 93–98.
Nourry, C., Seegmuller, T., Venditti, A. (2013). Aggregate instability under balanced-budget consumption taxes: a re-examination. Journal of Economic Theory, 148, 1977–2006.
OECD. (2016). OECD environmental performance reviews: France 2016, OECD Publishing, Paris.
Ramsey, F. (1928). A mathematical theory of saving. Economic Journal, 38, 543–559.
Salkeld, D.J., Padgett, K.A., Jones, J.H. (2013). A meta-analysis suggesting that the relationship between biodiversity and risk of zoonotic pathogen transmission is idiosyncratic. Ecology Letters, 16, 679–686.
Sinn, H.-W. (2008). Public policies against global warming: a supply side approach. International Tax and Public Finance, 15, 360–394.
Smith, K.F., Goldberg, M., Rosenthal, S., Carlson, L., Chen, J., Chen, C., Ramachandran, S. (2014). Global rise in human infectious disease outbreaks. Journal of The Royal Society Interface, 11, 1–6.
WWF. (2014). Living planet report 2014, Species and spaces, People and places. World Wide Fund for Nature.
Wirl, F. (2004). Sustainable growth, renewable resources and pollution: thresholds and cycles. Journal of Economic Dynamics & Control, 28, 1149–1157.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
The authors would like to thank Manh-Hung Nguyen of Toulouse School of Economics as well as two anonymous reviewers for their helpful and valuable comments.
Appendix
Appendix
Proof
of Proposition 2
The agent maximizes the intertemporal utility function (9) under the budget constraint (7). Setting the Hamiltonian \(H_{t}=e^{-\theta t}u\left (c_{t},B_{t}\right ) +\lambda _{t}\left [ \left (r_{t} -\delta \right ) h_{t}+\bar {\omega }_{t}-c_{t}\right ] \), deriving the first-order conditions ∂Ht/∂ct = 0, \(\partial H_{t}/\partial h_{t}=-\dot {\lambda }_{t}\) and \(\partial H_{t}/\partial \mu _{t}=\dot {h}_{t}\), and defining μt ≡ λte𝜃t, we get Eqs. 10, 11, and 12. □
Proof
of Proposition 3
Consider Eqs. 4, 14, 18, and Proposition 2. □
Proof
of Proposition 7
We differentiate system (19)–(22) to find the following:
Under Assumption 4 and \(B\in \left (0,1\right ) \), we obtain easily Proposition 7. □
Proof
of Proposition 8
In the Cobb–Douglas case, σ = 1 and, according to expressions (46), (37) yields the following:
In the case a = b, we obtain the following:
Proposition 8 immediately follows. □
Proof
of Proposition 9
According to Corollary 15 of [7], a Hopf bifurcation arises iff S2 = S3/T + DT/S3 and T and S3 have the same sign.
Let us rewrite S2 and S3 as follows:
Replacing (47), equation
becomes the following:
We observe that, if 0 < d < 1, D < 0 < m + T iff \(\bar {B}<B<\left (1+\theta \right ) /2\). In this case, m + T > 0 and \(4mD\left (m+T\right ) <0\). If d > 1, then D < 0 and, thus, D < 0 < m + T iff \(B<\left (1+\theta \right ) /2\). Even in this case, m + T > 0 and \(4mD\left (m+T\right ) <0\).
Then, in both the cases,
Clearly, the solution ε2 of
is not acceptable as Hopf bifurcation value because T and S3 have opposite sign. Let εH be solution of the following:
Replacing Eq. 48 in the LHS and Eq. 49 in the RHS, we obtain Eq. 44. □
Rights and permissions
About this article
Cite this article
Bosi, S., Desmarchelier, D. Biodiversity, Infectious Diseases, and the Dilution Effect. Environ Model Assess 25, 277–292 (2020). https://doi.org/10.1007/s10666-020-09688-9
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10666-020-09688-9