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Uncertain future preferences and conservation

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  • Chichilnisky, Graciela
  • Beltratti, Andrea
  • Heal, Geoffrey

Abstract

An important problem in environmental economics arises from te irreversibility of consuming or destroying certain resources. Extractive resources like oil are a clear example. Even for environmental resources the same seems to be true in a number of environmental cases, for example biodiversity, current climate conditions, or complex ecological systems. Irreversibility imposes a sever externality across different generations; future generations will suffer from the destruction of a unique asset like Amazonia, and it is not clear how such a loss could be compensated in terms of other goods. If such an asset is destroyed, then it is not possible to subsequently restore it. In contrast, if the asset is preserved, then it is possible to "use" the asset at a subsequent date. If there is uncertainty about future preferences or valuations, then preservation provides a type of insurance which is not available if the irreversible decision is carried out.

Suggested Citation

  • Chichilnisky, Graciela & Beltratti, Andrea & Heal, Geoffrey, 1998. "Uncertain future preferences and conservation," MPRA Paper 7912, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:7912
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    Cited by:

    1. Alain Le Kama & Katheline Schubert, 2004. "Growth, Environment and Uncertain Future Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(1), pages 31-53, May.
    2. Svenja Hector, 2013. "Accounting for Different Uncertainties: Implications for Climate Investments?," Working Papers 2013.107, Fondazione Eni Enrico Mattei.
    3. Attanasi, Giuseppe Marco & Montesano, Aldo, 2010. "Testing Value vs Waiting Value in Environmental Decisions under Uncertainty," TSE Working Papers 10-154, Toulouse School of Economics (TSE).
    4. Susanne Soretz, 2003. "Stochastic Pollution and Environmental Care in an Endogenous Growth Model," Manchester School, University of Manchester, vol. 71(4), pages 448-469, July.
    5. El Hadji Fall, 2006. "The Worst-Case Scenario and Discounting the Very Long Term," Post-Print halshs-00084074, HAL.
    6. Nkuiya, Bruno & Costello, Christopher, 2016. "Pollution control under a possible future shift in environmental preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 193-205.
    7. Susanne Soretz, 2007. "Efficient Dynamic Pollution Taxation in an Uncertain Environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(1), pages 57-84, January.
    8. Frank Krysiak, 2009. "Sustainability and its relation to efficiency under uncertainty," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(2), pages 297-315, November.
    9. Donatella Baiardi & Mario Menegatti, 2011. "Pigouvian tax, abatement policies and uncertainty on the environment," Journal of Economics, Springer, vol. 103(3), pages 221-251, July.
    10. Alain AYONG LE KAMA, 2004. "La consommation de ressources environnementales en incertitude," Discussion Papers (REL - Recherches Economiques de Louvain) 2004031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    11. Alain Ayong Le Kama, 2001. "Preservation and exogenous uncertain future preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 18(3), pages 745-752.
    12. Chichilnisky, Graciela, 2009. "Avoiding extinction: equal treatment of the present and the future," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-25.
    13. Maria Cunha-E-Sá & Clara Costa-Duarte, 2000. "Endogenous Future Preferences and Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(2), pages 253-262, June.
    14. Chichilnisky, Graciela, 1998. "The economics of global environmental risk," MPRA Paper 8812, University Library of Munich, Germany.
    15. Robert Kast, 2010. "Managing financial risks due to natural catastrophes," Working Papers 10-19, LAMETA, Universtiy of Montpellier, revised 2010.
    16. Geoffrey Heal & Bengt Kriström, 2002. "Uncertainty and Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 3-39, June.
    17. Robert Kast, 2011. "Managing financial risks due to natural catastrophes," Working Papers hal-00610241, HAL.
    18. El Hadji Fall, 2006. "The Worst-Case Scenario and Discounting the Very Long Term," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00084074, HAL.
    19. Frank Krysiak, 2009. "Risk Management as a Tool for Sustainability," Journal of Business Ethics, Springer, vol. 85(3), pages 483-492, April.
    20. Loek Groot, 2004. "La consommation de ressources environnementales en incertitude," Recherches économiques de Louvain, De Boeck Université, vol. 70(3), pages 255-286.
    21. Svenja Hector(), "undated". "Accounting for Different Uncertainties: Implications for Climate Investments?," Working Papers ETH-RC-13-007, ETH Zurich, Chair of Systems Design.
    22. Ngo Van Long, 2019. "Managing, Inducing, and Preventing Regime Shifts: A Review of the Literature," CESifo Working Paper Series 7749, CESifo.
    23. Frank Krysiak & Daniela Krysiak, 2006. "Sustainability with Uncertain Future Preferences," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(4), pages 511-531, April.

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    More about this item

    Keywords

    biodiversity; climate change; ecological systems; externality; future; preferences; environmental; environment; irreversible; resources; natural resources;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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