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Uncertain future preferences and conservation

Graciela Chichilnisky (), Andrea Beltratti and Geoffrey Heal ()

MPRA Paper from University Library of Munich, Germany

Abstract: An important problem in environmental economics arises from te irreversibility of consuming or destroying certain resources. Extractive resources like oil are a clear example. Even for environmental resources the same seems to be true in a number of environmental cases, for example biodiversity, current climate conditions, or complex ecological systems. Irreversibility imposes a sever externality across different generations; future generations will suffer from the destruction of a unique asset like Amazonia, and it is not clear how such a loss could be compensated in terms of other goods. If such an asset is destroyed, then it is not possible to subsequently restore it. In contrast, if the asset is preserved, then it is possible to "use" the asset at a subsequent date. If there is uncertainty about future preferences or valuations, then preservation provides a type of insurance which is not available if the irreversible decision is carried out.

Keywords: biodiversity; climate change; ecological systems; externality; future; preferences; environmental; environment; irreversible; resources; natural resources (search for similar items in EconPapers)
JEL-codes: Q56 Q3 (search for similar items in EconPapers)
Date: 1998
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Published in Sustainability: Dynamics and Uncertainty (1998): pp. 257-276

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