Optimal Resource Management With A Safe Minimum Standard: Conditions For Living On The Edge Of Risk
|Presenting Author:||Eric Naevdal (Agricultural University of Norway)|
|Coauthor 1:||Michael Margolis|
Safe Minimum Standards (SMSs) have been advocated as a policy rule for certain environmental problems where uncertainty about risks and consequences are thought to be profound. By implementing a SMS, all environmental risk is avoided. Economists have criticised SMSs as a policy rule not founded on economic principles. Although, the criticism is valid, the literature does not provide a comprehensive analytical framework for analysing environmental problems where a SMS is a policy choice. Therefore, the choice of a SMS cannot be dismissed on the basis of economic arguments either. This paper rectifies this by developing models that allows us to explore the rationale for such a policy and derives conditions for when a SMS can be summarily dismissed as a policy choice and for when a SMS can be defended as an optimal policy based on standard economic criteria. These conditions can be checked with quite limited information about damages and risks.
|Link to paper:||http://weber.ucsd.edu/~carsonvs/papers/265.pdf|
|Session / Day / Time||16H / Thursday / 2:15 - 4:15 pm|
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