A mathematical model to quantitatively calculate the trade-offs between ESs within a DSS

Abstract

Farmers tend to develop a production plan for their farm based on experience and expectations regarding costs, yields and revenues for their different production options. This is – especially in connection with livestock and/or biogas production systems – a complex decision problem that can be solved using mathematical programming approaches. Currently farmers are additionally expected to consider ecosystems services when optimising their production, some of which can be rewarded through various payment schemes. The study of the trade-off between ESs is an important issue that helps to optimize decisions about their use as well as their conservation. Despite the increase in the number of studies on ESs and the trade-off between them, the number of studies on how to quantitatively calculate and manage these trade-offs is still scarce. In the absence of a market to directly discover the value of ESs, economic valuation is a useful research and policy tool for determining the value and prioritization of ESs by assigning a monetary value for the services provided by them. But these methods usually value ESs separately and based on surveys of their consumers’ willingness to pay. The whole farm mathematical modelling approach within the project DAKIS (Digital Agricultural Knowledge and Information System) will allow for the determination of the shadow value of ESs simultaneously based on their society’s supply and demand and their impact on the farmer's income or cost. This conceptual paper, while introducing this feature in order to evaluate and prioritize the ESs more comprehensively and accurately, shows how it can be used to quantify the effect of changes in the society’s supply and demand of each ESs on the trade-offs between them.