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Buying Ecological Services: Nature's Harmonies, Fragmented Reserves and the Agricultural Extensification Debate

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Abstract

Growing demand for cropland products has placed intense pressure on the ability of land resources to support nature, straining public budgets to purchase environmental goods. Fixing overall agricultural output, two policy options are whether to promote more extensive and nature friendly farming practices or to produce intensively on some land and leave the rest wild. Microeconomic models of the topic have not accommodated widely recognized complementary spatial externalities in providing ecological services. This article does so, identifying also a third policy possibility. This is that environmental services can follow a smoothly varying spatial path characterized by harmonic functions.

Suggested Citation

  • David A. Hennessy & Harvey E. Lapan, 2008. "Buying Ecological Services: Nature's Harmonies, Fragmented Reserves and the Agricultural Extensification Debate," Center for Agricultural and Rural Development (CARD) Publications 08-wp482, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    • Handle: RePEc:ias:cpaper:08-wp482
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    More about this item

    Keywords

    biofuels; environmental policy; spatial externalities; Wirtinger's inequality.;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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