Spring 2006 Seminar Series
4.00pm, Thursday 26 October
Venue: Crawford School for Economics and Government, in Seminar Room
1, 2nd Floor, Crawford Building (13), Ellery Crescent, ANU, Canberra.
Anke Leroux, La Trobe University
Real Options in Biodiversity Conservation:
Abstract: The irreversible conversion of forests matters for biodiversity
conservation in view of exogenous and endogenous types of risk. Natural
ecological variations give rise to the former risk whereas the latter
encompasses the consequences of extinction debt, which is a function of
the rate of land conversion. Optimal dynamic land allocation decisions
are derived numerically within a real options framework, where the value
of biodiversity follows a controlled diffusion process.
Economic-ecological system dynamics are analysed in the conservation
and conversion zones for Costa Rica. It is found that extinction debt
results in two competing forces with the mean effect increasing optimal
biodiversity conservation, whereas the variance effect leads to greater
conversion of land. The costs of extinction debt under optimal and nonoptimal policy designs are quantified.
Funding support for this seminar series has been kindly provided
by the ANU College of Business and Economics
For further information, email robyn.walter@cres.anu.edu.au. No booking needed to attend the
seminar; just show up; http://campusmap.anu.edu.au gives directions.