Species preservation and biodiversity value: a real options approach

Kassar, Ilhem; Lasserre, Pierre

doi:10.1016/j.jeem.2003.11.005

Cited by 80 publications

(45 citation statements)

References 15 publications

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“…Our model allows two separate but possibly correlated returns, those from traditional crops and from energy crops. Kassar and Lasserre (2004) examine the optimal abandonment rule between two species, both of which have stochastic values. However, in their study, a species cannot be recovered once it is lost, which is equivalent to switching in one direction only.…”

Section: Switching To Perennial Energy Crops Under Uncertainty and Comentioning

confidence: 99%

Switching to Perennial Energy Crops Under Uncertainty and Costly Reversibility

Feng

Zhao

Swinton

2011

American J Agri Economics

120

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We study a farmer's decision to convert traditional crop land into growing dedicated energy crops, taking into account sunk conversion costs, uncertainties in traditional and energy crop returns, and learning. The optimal decision rules differ significantly from the expected net present value rule, which ignores learning, and from real option models that allow only one way conversions into energy crops. These models also predict drastically different patterns of land conversions into and out of energy crops over time. Using corn-soybean rotation and switchgrass as examples, we show that the model predictions are sensitive to assumptions about stochastic processes of the returns.Government policies might have unintended consequences: subsidizing conversion costs into switchgrass reduces proportions of land in switchgrass in the long run.

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Section: Switching To Perennial Energy Crops Under Uncertainty and Comentioning

confidence: 99%

Switching to Perennial Energy Crops Under Uncertainty and Costly Reversibility

Feng

Zhao

Swinton

2011

American J Agri Economics

120

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“…First, it pushes the barrier^ downward; second, by increasing the positive skewness of the distribution of , it raises the probability of the barrier being reached. 41 Both e¤ects induce a higher rate of deforestation in both the short-run and long-run.…”

Section: Case With 1 >mentioning

confidence: 99%

An Equilibrium Model of Habitat Conservation Under Uncertainty and Irreversibility

2011

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SummaryIn this paper stochastic dynamic programming is used to investigate habitat conservation by a multitude of landholders under uncertainty about the value of environmental services and irreversible development. We study land conversion under competition on the market for agricultural products when voluntary and mandatory measures are combined by the Government to induce adequate participation in a conservation plan. We analytically determine the impact of uncertainty and optimal policy conversion dynamics and discuss different policy scenarios on the basis of the relative long-run expected rate of deforestation. Finally, some numerical simulations are provided to illustrate our findings. Keywords AbstractIn this paper stochastic dynamic programming is used to investigate habitat conservation by a multitude of landholders under uncertainty about the value of environmental services and irreversible development. We study land conversion under competition on the market for agricultural products when voluntary and mandatory measures are combined by the Government to induce adequate participation in a conservation plan. We analytically determine the impact of uncertainty and optimal policy conversion dynamics and discuss di¤erent policy scenarios on the basis of the relative long-run expected rate of deforestation. Finally, some numerical simulations are provided to illustrate our …ndings.

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“…Malgré certains titres provocateurs (Christie et al, 2006), les mesures empiriques de la valeur de la biodiversité et des écosystèmes portent en fait sur des objets concrets et assez variés (gènes, espèces, habitats, fonctions, services) dont le choix est souvent motivé par la finalité de l'évaluation (Goeschl et Swanson, 2007 ;Sarr et al, 2008 ;Loomis et White, 1996 ;Richardson et Loomis, 2009 ;Kassar et Lasserre, 2004 ;Leroux et al, 2009). …”

Section: Les Objets De L'évaluationunclassified

Dossier « Le réveil du dodo III » - Évaluer la biodiversité et les services écosystémiques : pourquoi, comment et avec quels résultats ?

Salles

2010

Nat. Sci. Soc.

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Mots-clés :biodiversité ; choix collectifs ; évaluation économique ; politiques de conservation ; services écosystémiques.Résumé -L'évaluation de la biodiversité et des services liés aux écosystèmes est actuellement l'objet de nombreux travaux et d'un large débat. Afin de dépasser les oppositions, il importe de comprendre ce que signifie vraiment l'évaluation économique pour en cerner l'intérêt et les limites. Le nécessaire élargissement de la notion de valeur qu'implique une analyse appropriée de ces services a donné lieu à une pluralité de méthodes, parfois durement contestées. L'objet de cet article est de préciser certains termes de ces débats, tant conceptuels que méthodologiques, ainsi que le choix des objets à évaluer, en les resituant par rapport aux objectifs très différents que peuvent poursuivre les évaluations. Keywords:biodiversity; collective choices; economic valuation; conservation policies; ecosystem services Abstract -Biodiversity and ecosystem services valuation: for which purpose, how and with which results? The valuation of biodiversity and ecosystem services is the subject of many studies and extensive debate. To overcome problems of principle, the real meaning of economic evaluation must be clarified in order to identify its advantages and limitations. An appropriate analysis of these services implied extending the concept of value and has given rise to a plurality of methods that may be strongly challenged. The purpose of this paper is to clarify some terms of these debates. There are reasons for being reluctant to give a price index to Nature's services, but its conservation entails costs, at least opportunity costs. Most valuation methods rest upon individual preferences, either revealed by concrete behaviours, or stated during interviews, and this is clearly an issue for items agents are not familiar with or do not perceive clearly the benefits. Finally, valuing biodiversity through ecosystem services might lead to underestimate some major parts of what constitutes biodiversity social value. These issues have to be replaced in relation to the very different objectives that may further the actual valuations. The paper concludes that valuation can offer quite a valuable contribution to conservation policies, but since the relation between biodiversity, ecosystem services and human well-being remains poorly understood, that it is a far too important stake to let economists alone in facing these puzzles.

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Species preservation and biodiversity value: a real options approach

Cited by 80 publications

References 15 publications

Switching to Perennial Energy Crops Under Uncertainty and Costly Reversibility

Switching to Perennial Energy Crops Under Uncertainty and Costly Reversibility

An Equilibrium Model of Habitat Conservation Under Uncertainty and Irreversibility

Dossier « Le réveil du dodo III » - Évaluer la biodiversité et les services écosystémiques : pourquoi, comment et avec quels résultats ?

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