The value of biodiversity as an insurance device
(2017) , 29 pages
Files
2017005.pdf
Open Access - Adobe PDF
- 864.76 KB
Details
- Authors
- Abstract
- This paper presents a benchmark endogenous growth model including biodiversity preservation dynamics. Producing food requires land, and increasing the share of total land devoted to farming mechanically reduces the share of land devoted to biodiversity conservation. However, safeguarding a greater number of species guarantee better ecosystem services – pollination, flood control, pest control, etc., which in turn ensure lower volatility of agricultural productivity. The optimal conversion/preservation rule is explicitly characterized, as well as the value of biological diversity, in terms of the welfare gain from biodiversity conservation. The Epstein-Zin-Weil specification of the utility function allows us to disentangle the effects of risk aversion and aversion to fluctuations. A twoplayer game extension of the model highlights the effect of volatility externalities and the Paretian sub-optimality of the decentralized choice.
- Affiliations
Université de La Rochelle Mathématiques, Image et Applications (MIA) Université Aix-Marseille CNRS, EHESS, Centrale Marseille, AMSE Université Paris 1 Panthéon-Sorbonne Paris School of Economics
Citations
Augeraud-Veron, E., Fabbri, G., & Schubert, K. (2017). The value of biodiversity as an insurance device (IRES Discussion Papers 2017-5). https://hdl.handle.net/2078.5/180771