Estimating the Resilience Value of Soil Biodiversity in Agriculture: A Stochastic Simulation Approach

Mark Brady and Rong-Gang Cong

No 114269, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: Characteristic of ecosystems is that different organisms can have similar functions and hence provide similar ecosystem services. Consequently functional diversity can maintain the rate of services despite environmental fluctuations. In this paper we present a method for estimating the resilience value of biodiversity. Central to a resilience perspective on biological conservation is consideration of uncertainty about the future. To do this we propose stochastic simulation as a practical approach for valuing resilience due to the ease of incorporating uncertain variables. We demonstrate the approach by developing a stochastic simulation model for valuing soil biodiversity in agriculture. Our results indicate that the long time frames involved in soil processes create a significant incentive to perpetuate unsustainable farming systems and hence there might be a need for policy intervention. However we also show that investing in soil biodiversity conservation can provide significant risk diversification benefits that are not accounted for in a deterministic evaluation. These benefits can be estimated through stochastic simulation.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 16
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114269

DOI: 10.22004/ag.econ.114269

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