Irreversibility, Option Demand and Environmental Preservation

Etienne Bienvenu Akono

Abstract


The purpose of this article is to analyze the government’s choice between preservation and irreversible development when there is a willingness to pay for retaining the option to use the environmental site. Extending the model used by & , I show that in the context of uncertainty about future benefits, the government would choose to preserve the land when there is an option demand to refrain from using it.


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DOI: http://dx.doi.org/10.5296/emsd.v2i2.3680

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Environmental Management and Sustainable Development  ISSN 2164-7682

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