Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45231
Authors: 
Baumgärtner, Stefan
Quaas, Martin
Year of Publication: 
2005
Series/Report no.: 
UFZ-Diskussionspapiere 27/2005
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 extent of optimal regulation may decrease or increase, depending on the relative size of private and external effects of management effort on biodiversity; and (iii) the welfare loss due to free-riding may decrease or increase, depending on how biodiversity influences ecosystem service provision; it increases, unless higher biodiversity greatly decreases the variance of ecosystem services.
Subjects: 
biodiversity
ecosystem services
ecosystem management
free-riding
insurance
public good
risk-aversion
uncertainty
Document Type: 
Working Paper

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