Arnaud Dragicevic: Assessing the Impact of Payments for Environmental Services on a Bioeconomic Supply Chain Equilibrium

Monday January 15, 2024 at 11am (online)

Speaker: Arnaud Dragicevic  (CIRANO Montreal, Canada, and Chulalongkorn University, Bangkok, Thailand)

Title: Assessing the Impact of Payments for Environmental Services on a Bioeconomic Supply Chain Equilibrium

Summary: This study explores the effectiveness of Payments for Environmental Services (PES) in addressing both climate change and biodiversity loss within the framework of bioeconomic supply chain management. Our findings indicate that reductions exceeding 50% in both greenhouse gas (GHG) emissions and biodiversity loss are achievable. While PES are integral to this success, they are insufficient on their
own. A synergistic approach that combines a moderate decrease in production levels due to the economic decoupling effect, heightened environmental awareness among stakeholders, and targeted monetary incentives is essential to realize such substantial reductions. Thus, PES are necessary but not sufficient to achieve a meaningful reduction in environmental footprint. The adoption of sustainable practices and
improvements in resource efficiency are equally crucial. To substantiate our theoretical claims, we leveraged variational inequality methods within a multi-criteria decision-making framework. Numerical simulations executed via an optimized machine learning algorithm provided robust evidence supporting our conclusions.