The Private and Public Insurance Value of Conservative Biodiversity Management
The ecological literature suggests that biodiversity reduces the variance of ecosystem services. Thus, conservative biodiversity management has an insurance value to risk-averse users of ecosystem services. We analyze a conceptual ecological-economic model in which such management measures generate a private benefit and, via ecosystem processes at higher hierarchical levels, a positive externality on other ecosystem processes at higher hierarchical levels, a positive externality on other ecosystem users. We find that ecosystem management and environmental policy depend on the extent of uncertainty and risk-aversion as follows: (i) Individual effort to improve ecosystem quality unambiguously increases. The free-rider problem may decrease or increase, depending on the characteristics of the ecosytsem and its management; in particular, (ii) the size of the externality may decrease or increase, depending on how individual and aggregate management effort influence biodiversity; and (iii) the welfare loss due to free-riding may decrease or increase, depending on how biodiversity influences ecosystem service provision.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas Aronsson & Sören Blomquist, 2003. "On Environmental Taxation under Uncertain Environmental Damage," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(2), pages 183-196, February.
- Blomquist, Sören & Aronsson, Thomas, 1999.
"On Environmental Taxation under Uncertainty,"
Working Paper Series
1999:14, Uppsala University, Department of Economics.
- Salvatore Di Falco & Charles Perrings, 2003. "Crop Genetic Diversity, Productivity and Stability of Agroecosystems. A Theoretical and Empirical Investigation," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 207-216, 05.
- Di Falco, Salvatore & Chavas, Jean-Paul & Smale, Melinda, 2006. "Farmer management of production risk on degraded lands: the role of wheat genetic diversity in Tigray Region, Ethiopia," EPTD discussion papers 153, International Food Policy Research Institute (IFPRI).
- Salvatore Di Falco & Charles Perrings, 2004.
"Crop Biodiversity, Risk Management and the Implications of Agricultural Assistance,"
0084, National University of Ireland Galway, Department of Economics, revised 2004.
- Di Falco, Salvatore & Perrings, Charles, 2005. "Crop biodiversity, risk management and the implications of agricultural assistance," Ecological Economics, Elsevier, vol. 55(4), pages 459-466, December.
When requesting a correction, please mention this item's handle: RePEc:lue:wpaper:33. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Wagner)
If references are entirely missing, you can add them using this form.