Measuring sustainability under regime shift uncertainty: A resilience pricing approac
2010 (English)Report (Other academic)
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 .ipping into a qualitatively di¤erent state. Using a multisector growth model under uncertainty, we derive the shadow price of resilience that a¤ects 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
Uppsala: Department of Economics, Uppsala University , 2010. , 20 p.
Working paper / Department of Economics, Uppsala University (Online), ISSN 1653-6975 ; 2010:16
IdentifiersURN: urn:nbn:se:uu:diva-161801OAI: oai:DiVA.org:uu-161801DiVA: diva2:457405