Document Type
Article
Publication Date
2019
Publication Title
Environmental and Resource Economics
Abstract
The scientific information needed to precisely link land use changes to changes in ecosystem service provision is often unavailable, particularly for hydrological ecosystem services. Potential buyers of ecosystem services must weigh the risk of paying to induce conservation that fails to deliver valuable ecosystem services against the risk that land is developed before its value is known. This paper uses a two period model to assess when expected future improvements in scientific information should substantially impact payments for conservation today. Optimal current payments increase, often substantially, as the quality of expected future information increases, but the gain from increasing payments to account for the expected degree of improved information is small in many cases. Larger values occur when the buyer believes that the land whose private development value is the highest also provides the highest ecosystem service value, when the buyer faces relatively more uncertainty about ecosystem service provision than about the cost of inducing conservation, and when the buyer believes land is highly likely to be developed absent incentive payments.
Volume
73
First Page
591
Last Page
625
DOI
https://doi.org/10.1007/s10640-018-0275-3
Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.
Rights
Licensed to Smith College and distributed CC-BY 4.0 under the Smith College Faculty Open Access Policy.
Recommended Citation
Sayre, Susan Stratton, "Pay for the Option to Pay? The Impact of Improved Scientific Information on Payments for Ecosystem Services" (2019). Economics: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/eco_facpubs/112
Comments
Peer reviewed accepted manuscript.