The Private and Public Insurance Value of Conservative Biodiversity Management
- 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.
Author: | Stefan BaumgärtnerORCiDGND, Martin F. QuaasORCiD |
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URL: | https://pub-data.leuphana.de/frontdoor/index/index/docId/444 |
Document Type: | ResearchPaper |
Language: | English |
Year of Completion: | 2006 |
Date of Publication (online): | 2006/11/22 |
Release Date: | 2006/11/22 |
Tag: | biodiversity; ecosystem management; free-riding; insurance; public good |
GND Keyword: | Ökosystem; Versicherung; Haftpflichtrisiko; Öffentliches Gut |
Institutes: | Universität / Frühere Fachbereiche |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |