Decomposing Shadow Prices Under Climate‐Driven Growth Scenarios: Insights From an Elk Herd Case Study

ABSTRACT Natural capital accounting provides a framework for integrating ecological processes with economic valuation, but the mechanics of shadow price formation often remain opaque to resource managers and policymakers. Using the Clarks Fork elk herd in northwestern Wyoming as a case study, we decompose the shadow price of natural capital into its ecological, economic, and institutional components. Population dynamics are estimated using a linearized Ricker model and projected forward using a logistic projection, incorporating climate‐driven reductions in intrinsic growth rates. These ecological scenarios are linked to a shadow pricing formulation that explicitly accounts for marginal benefits, harvest policy responses, discounting, and capital gains. Results show shadow prices are shaped by population size, nonlinear ecological feedbacks, and scarcity expectations. Climate‐induced declines in intrinsic growth rates dampen both biological growth and capital gains, attenuating the steepness of shadow price declines relative to population losses. Isolating the effects of marginal benefits, discounting, and capital gains sheds light on how ecological change shapes scarcity‐adjusted value, improving the interpretability of natural capital accounting.