Abstract
We merge inclusive wealth theory with ecosystem-based management (EBM) to address two challenges in the science of sustainable management of ecosystems. First, we generalize natural capital theory to approximate realized shadow prices for multiple interacting natural capital stocks (species) making up an ecosystem. These prices enable ecosystem components to be better included in wealth-based sustainability measures. We show that ecosystems are best envisioned as portfolios of assets, where the portfolio's performance depends on the performance of the underlying assets influenced by their interactions. Second, changes in ecosystem wealth provide an attractive headline index for EBM, regardless of whether ecosystem wealth is ultimately included in a broader wealth index. We apply our approach to the Baltic Sea ecosystem, focusing on the interacting community of three commercially important fish species: cod, herring, and sprat. Our results incorporate supporting services embodied in the shadow price of a species through its trophic interactions. Prey fish have greater shadow prices than expected based on market value, and predatory fish have lower shadow prices than expected based on market value. These results are because correctly measured shadow prices reflect interdependence and limits to substitution. We project that ecosystem wealth in the Baltic Sea fishery ecosystem generally increases conditional on the EBM-inspired multispecies maximum sustainable yield management beginning in 2017, whereas continuing the current single-species management generally results in declining wealth.