The economic value of forests in supplying local climate regulation

Several authors have argued that forest ecosystems serve as a hedge against extreme climatic events at a local scale. Consequently, the local climate regulation ecosystem services provided by forests can be economically valued by evaluating the reduction (increase) in the insurance premium that risk...

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Bibliographic Details
Published in:The Australian journal of agricultural and resource economics 2015-07, Vol.59 (3), p.446-457
Main Authors: Figueroa, Eugenio, Pasten, Roberto
Format: Article
Language:English
Subjects:
ecosystem services
Environmental Economics and Policy
insurance value
local climate regulation
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Summary:Several authors have argued that forest ecosystems serve as a hedge against extreme climatic events at a local scale. Consequently, the local climate regulation ecosystem services provided by forests can be economically valued by evaluating the reduction (increase) in the insurance premium that risk-averse individuals are willing to pay when forest cover is marginally increased (reduced). This type of insurance value associated to forest ecosystems services is estimated to be USD 0.0733 per hectare of forest for Chilean farmers. The empirical framework proposed in this paper is useful and relevant for the cost-benefit analysis of natural resource conservation investments
ISSN:1467-8489
1467-8489
DOI:10.22004/ag.econ.283212