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Environmental Risks and Precautionary Behaviour

Author

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  • Pablo Garcia Sanchez

Abstract

Humanity is degrading natural capital at rates far greater than ever before, raising the likelihood of irreversible environmental damages. Using a simple cake-eating model, I argue that this heightened risk of irreversible damages fosters precautionary behaviour. That is, it becomes optimal to build a cushion of natural capital to make these damages less likely, and to limit the fall in consumption if they ever occur.

Suggested Citation

  • Pablo Garcia Sanchez, 2023. "Environmental Risks and Precautionary Behaviour," Annals of Economics and Statistics, GENES, issue 150, pages 67-80.
    • Handle: RePEc:adr:anecst:y:2023:i:150:p:67-80
    DOI: 10.2307/48731469
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    More about this item

    Keywords

    Natural capital; Environmental Risks; Tipping Point;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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