The economic insurance value of ecosystem resilience
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In: Ecological Economics, Vol. 101, No. 6, 05.2014, p. 21-32.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - The economic insurance value of ecosystem resilience
AU - Baumgärtner, Stefan
AU - Strunz, Sebastian
PY - 2014/5
Y1 - 2014/5
N2 - Ecosystem resilience, i.e. an ecosystem's ability to maintain its basic functions and controls under disturbances, is often interpreted as insurance: by decreasing the probability of future drops in the provision of ecosystem services, resilience insures risk-averse ecosystem users against potential welfare losses. Using a general and stringent definition of "insurance" and a simple ecological-economic model, we derive the (marginal) economic insurance value of ecosystem resilience and study how it depends on ecosystem properties, economic context, and the ecosystem user's risk preferences. We show that (i) the insurance value of resilience is negative (positive) for low (high) levels of resilience, (ii) it increases with the level of resilience, and (iii) it is one additive component of the (overall always positive) economic value of resilience.
AB - Ecosystem resilience, i.e. an ecosystem's ability to maintain its basic functions and controls under disturbances, is often interpreted as insurance: by decreasing the probability of future drops in the provision of ecosystem services, resilience insures risk-averse ecosystem users against potential welfare losses. Using a general and stringent definition of "insurance" and a simple ecological-economic model, we derive the (marginal) economic insurance value of ecosystem resilience and study how it depends on ecosystem properties, economic context, and the ecosystem user's risk preferences. We show that (i) the insurance value of resilience is negative (positive) for low (high) levels of resilience, (ii) it increases with the level of resilience, and (iii) it is one additive component of the (overall always positive) economic value of resilience.
KW - Sustainability sciences, Management & Economics
KW - Ecosystem
KW - Economic value
KW - Insurance
KW - Resilience
KW - Risk
KW - Risk preferences
KW - Economic value
KW - Ecosystem
KW - Insurance
KW - Resilience
KW - Risk
KW - Risk preferences
UR - http://www.scopus.com/inward/record.url?scp=84895741278&partnerID=8YFLogxK
U2 - 10.1016/j.ecolecon.2014.02.012
DO - 10.1016/j.ecolecon.2014.02.012
M3 - Journal articles
VL - 101
SP - 21
EP - 32
JO - Ecological Economics
JF - Ecological Economics
SN - 0921-8009
IS - 6
ER -