Forest Conservation in Costa Rica: when nonuse benefits are uncertain but rising

E.H. Bulte, D.P. van Soest, G.C. van Kooten, R.A. Schipper

Research output: Contribution to journalArticleAcademicpeer-review

36 Citations (Scopus)

Abstract

Stochastic dynamic programming is used to investigate optimal holding of primary tropical forest in humid Costa Rica when future nonuse benefits of forest conservation are uncertain and increasing. The quasi-option value of maintaining primary forests is included as a component of investment in natural capital. Although the impact of uncertainty on conservation incentives is substantial, our results indicate that a rising trend in future benefits and compensation by the international community for beneficial spillovers are more important factors in determining optimal holdings of forest stocks. Without compensatory payments, however, further deforestation may be warranted.
Original languageEnglish
Pages (from-to)150-160
JournalAmerican Journal of Agricultural Economics
Volume84
Issue number1
DOIs
Publication statusPublished - 2002

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