PubData Leuphana Repository: Managing increasing environmental risks through agro-biodiversity and agri-environmental policies

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Ressourcentyp	Arbeitspapier
Titel	Managing increasing environmental risks through agro-biodiversity and agri-environmental policies
DOI	10.48548/pubdata-1232
Handle	20.500.14123/1295
Autor*in	Baumgärtner, Stefan 0000-0001-8314-8462 121846857 Quaas, Martin F. 0000-0003-0812-8829
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 subsidy on 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.
Sprache	Englisch
Schlagwörter	Biodiversity; Ecosystem; Environmental Policy; Insurance; Risk Aversion; Biodiversität; Umweltpolitik; Risikoausschluss; Biologische Landwirtschaft; Biologischer Landbau
Jahr der Veröffentlichung in PubData	2008
Art der Veröffentlichung	Erstveröffentlichung
Publikationsversion	Veröffentlichte Version
Datum der Erstveröffentlichung	2008-03-12
Entstehungskontext	Forschung
Veröffentlicht durch	Medien- und Informationszentrum, Leuphana Universität Lüneburg
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