Managing increasing environmental risks through agro-biodiversity and agri-environmental policies

Research output: Working paperWorking papers

Standard

Managing increasing environmental risks through agro-biodiversity and agri-environmental policies. / Baumgärtner, Stefan; Quaas, Martin F.
Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg, 2008. (Working paper series in economics; No. 80).

Research output: Working paperWorking papers

Harvard

Baumgärtner, S & Quaas, MF 2008 'Managing increasing environmental risks through agro-biodiversity and agri-environmental policies' Working paper series in economics, no. 80, Institut für Volkswirtschaftslehre der Universität Lüneburg, Lüneburg.

APA

Baumgärtner, S., & Quaas, M. F. (2008). Managing increasing environmental risks through agro-biodiversity and agri-environmental policies. (Working paper series in economics; No. 80). Institut für Volkswirtschaftslehre der Universität Lüneburg.

Vancouver

Baumgärtner S, Quaas MF. Managing increasing environmental risks through agro-biodiversity and agri-environmental policies. Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg. 2008. (Working paper series in economics; 80).

Bibtex

@techreport{e1eb839bae384cd88e6935c9757ff569,
title = "Managing increasing environmental risks through agro-biodiversity and agri-environmental policies",
abstract = "Agro-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 subsidyon 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.",
keywords = "Economics, agro-biodiversity, ecosystem services, agri-environmental policy, insurance, risk-aversion, uncertainty, agro-biodiversity, ecosystem services, agri-environmental policy, insurance, risk-aversion, uncertainty, Sustainability sciences, Management & Economics, agro-biodiversity, ecosystem services, agri-environmental policy, insurance, risk-aversion, uncertainty",
author = "Stefan Baumg{\"a}rtner and Quaas, {Martin F.}",
note = "Literaturverz. S. 20 - 23",
year = "2008",
language = "English",
series = "Working paper series in economics",
publisher = "Institut f{\"u}r Volkswirtschaftslehre der Universit{\"a}t L{\"u}neburg",
number = "80",
type = "WorkingPaper",
institution = "Institut f{\"u}r Volkswirtschaftslehre der Universit{\"a}t L{\"u}neburg",

}

RIS

TY - UNPB

T1 - Managing increasing environmental risks through agro-biodiversity and agri-environmental policies

AU - Baumgärtner, Stefan

AU - Quaas, Martin F.

N1 - Literaturverz. S. 20 - 23

PY - 2008

Y1 - 2008

N2 - Agro-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 subsidyon 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.

AB - Agro-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 subsidyon 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.

KW - Economics

KW - agro-biodiversity

KW - ecosystem services

KW - agri-environmental policy

KW - insurance

KW - risk-aversion

KW - uncertainty

KW - agro-biodiversity

KW - ecosystem services

KW - agri-environmental policy

KW - insurance

KW - risk-aversion

KW - uncertainty

KW - Sustainability sciences, Management & Economics

KW - agro-biodiversity

KW - ecosystem services

KW - agri-environmental policy

KW - insurance

KW - risk-aversion

KW - uncertainty

M3 - Working papers

T3 - Working paper series in economics

BT - Managing increasing environmental risks through agro-biodiversity and agri-environmental policies

PB - Institut für Volkswirtschaftslehre der Universität Lüneburg

CY - Lüneburg

ER -

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