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    • [caption id="attachment_1045" align="alignleft" width="150" caption="Jessica Sushinsky birding at Uluru - August 2010"]Jessica Sushinsky birding at Uluru - August 2010
Using modern portfolio theory to enhance ecosystem service delivery: A case study from China

Zhang X, Jin X, Fuller RA, Liang X, Fan Y & Zhou Y (2023) Using modern portfolio theory to enhance ecosystem service delivery: A case study from China. Journal of Environmental Management, 347, 119064.

Land management strategies often prioritize agricultural supply services at the expense of other ecosystem services. To achieve a high and steady supply of multiple ecosystem services, it is essential to optimize land management practices in areas suitable for agriculture. However, many studies on land management tend to focus on their benefits to ecosystem service delivery without adequately considering the potential risks to other services that might be involved. Here we use modern portfolio theory to quantitatively measure benefits and risks from land management strategies to enhance ecosystem services. We create seven land management scenarios that balance different kinds of ecosystem services in different ways in the agricultural production area of Maoming, Guangdong Province, China. The method yielded optimal portfolios of land management patterns that enhanced ecosystem services while reducing risk as much as possible. This includes a scenario delivering a 22% increase in agricultural production service, while simultaneously increasing the provision of nature-related ecosystem services by 2%. However, no optimization scenario was perfect, and there was always a trade-off between gaining certain ecosystem service benefits and creating a risk of losing others. Our portfolio theory approach reveals that it is essential to consider both the benefits and risks of land management strategies.

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