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The economic value of forests in supplying local climate regulation

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  • Eugenio Figueroa
  • Roberto Pasten

Abstract

type="main" xml:id="ajar12096-abs-0001"> Several authors have argued that forest ecosystems serve as a hedge against extreme climatic events at a local scale. Consequently, the local climate regulation ecosystem services provided by forests can be economically valued by evaluating the reduction (increase) in the insurance premium that risk-averse individuals are willing to pay when forest cover is marginally increased (reduced). This type of insurance value associated to forest ecosystems services is estimated to be USD 0.0733 per hectare of forest for Chilean farmers. The empirical framework proposed in this paper is useful and relevant for the cost-benefit analysis of natural resource conservation investments.

Suggested Citation

  • Eugenio Figueroa & Roberto Pasten, 2015. "The economic value of forests in supplying local climate regulation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(3), pages 446-457, July.
  • Handle: RePEc:bla:ajarec:v:59:y:2015:i:3:p:446-457
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    File URL: http://hdl.handle.net/10.1111/ajar.2015.59.issue-3
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    Cited by:

    1. Valente, Donatella & Miglietta, Pier Paolo & Porrini, Donatella & Pasimeni, Maria Rita & Zurlini, Giovanni & Petrosillo, Irene, 2019. "A first analysis on the need to integrate ecological aspects into financial insurance," Ecological Modelling, Elsevier, vol. 392(C), pages 117-127.
    2. Soto-Montes-de-Oca, Gloria & Bark, Rosalind & González-Arellano, Salomón, 2020. "Incorporating the insurance value of peri-urban ecosystem services into natural hazard policies and insurance products: Insights from Mexico," Ecological Economics, Elsevier, vol. 169(C).
    3. Sun, Xuehui & Li, Xueming & Guan, Zhangnan & Liu, Jian & Zhang, Shuping, 2017. "The use of meteorological data to assess the cooling service of forests," Ecosystem Services, Elsevier, vol. 25(C), pages 28-34.

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