Measuring sustainability under regime shift uncertainty: a resilience pricing approach
2010 (English)In: Environment and Development Economics, ISSN 1355-770X, E-ISSN 1469-4395, Vol. 15, no Part 6 Sp. Iss. SI, 20 p.707-719 p.Article in journal (Refereed) Published
This paper is concerned with the theory of resilience pricing and sustainability measurement in the presence of risk for regime shift in a dynamic economy-environment system. Following Holling (1973), we consider resilience as the maximal perturbation that the system can absorb without flipping into a qualitatively different state. Using a multisector growth model under uncertainty, we derive the shadow price of resilience that affects the probabilities of the system to flip in the future. We also analyze the role of resilience on sustainability with both ex-ante and ex-post welfare measures.
Place, publisher, year, edition, pages
2010. Vol. 15, no Part 6 Sp. Iss. SI, 20 p.707-719 p.
Resilience price, regime shift, sustainability, ecosystem service
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-130092DOI: 10.1017/S1355770X10000318ISI: 000284553500005OAI: oai:DiVA.org:uu-130092DiVA: diva2:346306