Risk and Uncertainty in Environmental Economics: From Theory to Policy

Alexandra Lobb

No 100580, 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia from Australian Agricultural and Resource Economics Society

Abstract: A lack of awareness and understanding of risk and uncertainty can lead to poor decision making and higher costs for policy providers, as not accounting for them may produce policy which is inflexible and with a negative effect on welfare. Further, misunderstanding of and/or failure to account for risk and uncertainty can inhibit research and development for policy to which environmental economics can contribute (for example, in developing effective measures of sustainability). The aim of this project is to develop guidelines for ‘Best Practice’ approaches to risk and uncertainty in environmental economics for guiding policy development and implementation, taking into account key issues such as costs, irreversibility, adaptation and dynamics. These guidelines are developed by examining the frameworks commonly used by environmental economists to account for risk and uncertainty (such as the Precautionary Principle and Cost Benefit Analysis) as well as specifically developed theories (e.g. Quiggin’s Rank Dependent Utility Theory), borrowing from other disciplines (e.g. Prospect Theory) and drawing attention to lesser known ideas (e.g. Shackle’s Model).

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 53
Date: 2011
New Economics Papers: this item is included in nep-agr, nep-env, nep-hpe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/100580/files/Lobb.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aare11:100580

DOI: 10.22004/ag.econ.100580

Access Statistics for this paper

More papers in 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().