Quickest Detection of Ecological Regimes for Natural Resource Management

TL;DR

This paper develops a framework for the quickest detection of ecological regime shifts to improve resource management, integrating surveillance and decision-making under uncertainty, with a case study on São Paulo's water reservoir crisis.

Contribution

It introduces a Pareto optimal detection framework for ecological regime shifts, incorporating economic decision-making and surveillance, with solutions for profit-maximizing agents and real-world application.

Findings

Optimal detection delays are minimized under the proposed framework.

Application to São Paulo's water reservoir reveals critical regime shift detection insights.

Framework is adaptable to various decision makers and functional forms.

Abstract

We study the stochastic dynamics of natural resources under the threat of ecological regime shifts. We establish a Pareto optimal framework of regime shift detection under uncertainty that minimizes the delay with which economic agents become aware of the shift. We integrate ecosystem surveillance in the formation of optimal resource extraction policies. We fully solve the case of a profit-maximizing monopolist, study its response to regime shift detection and show the generality of our framework by extending our results to other decision makers and functional forms.We apply our framework to the case of the Cantareira water reservoir in S\~ao Paulo, Brazil, and study the events that led to its depletion and the consequent water supply crisis.