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http://hdl.handle.net/10419/28195
  

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dc.contributor.authorBaumgärtner, Stefanen_US
dc.contributor.authorQuaas, Martin F.en_US
dc.date.accessioned2008-03-18en_US
dc.date.accessioned2009-10-01T15:02:13Z-
dc.date.available2009-10-01T15:02:13Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/28195-
dc.description.abstractAgro-biodiversity can provide natural insurance to risk-averse farmers by reducing the variance of crop yield, and to society at large by reducing the uncertainty in the provision of public-good ecosystem services such as e.g. CO2 storage. We analyze the choice of agro-biodiversity by risk-averse farmers who have access to financial insurance, and study the implications for agri-environmental policy design when on-farm agro-biodiversity generates a positive risk externality. While increasing environmental risk leads private farmers to increase their level of on-farm agro-biodiversity, the level of agro-biodiversity in the laissez-faire equilibrium remains inefficiently low. We show how either one of two agri-environmental policy instruments can cure this risk-related market failure: an ex-ante Pigouvian subsidy on on-farm agro-biodiversity and an ex-post compensation payment for the actual provision of public environmental benefits. In the absence of regulation, welfare may increase rather than decrease with increasing environmental risk, if the agroecosystems is characterized by a high natural insurance function, low costs and large external benefits of agro-biodiversity.en_US
dc.language.isoengen_US
dc.publisherLeuphana-Univ. Lüneburgen_US
dc.relation.ispartofseriesUniversity of Lüneburg Working paper series in economics 80en_US
dc.subject.jelQ1en_US
dc.subject.jelQ57en_US
dc.subject.jelH23en_US
dc.subject.jelD62en_US
dc.subject.ddc330en_US
dc.subject.stwAgrarsubventionen_US
dc.subject.stwBiodiversitäten_US
dc.subject.stwUmweltschutzen_US
dc.subject.stwLandwirtschaften_US
dc.subject.stwRisikoaversionen_US
dc.subject.stwWohlfahrtseffekten_US
dc.subject.stwTheorieen_US
dc.titleManaging increasing environmental risks through agro-biodiversity and agri-environmental policiesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn559771487en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:Working Paper Series in Economics, Leuphana Universität Lüneburg

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