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|Title:||The private and public insurance value of conservative biodiversity management |
Quaas, Martin F.
|Issue Date:||2006 |
|Series/Report no.:||University of Lüneburg working paper series in economics 33|
|Abstract:||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 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 ecosystem 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.|
|Document Type:||Working Paper|
|Appears in Collections:||Working Paper Series in Economics, Leuphana Universität Lüneburg |
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