Investigating the potential of insurance as a mechanism to enhance the performance of risky conservation tenders

Toto Olita

doi:10.26182/5df9c5c881314

Investigating the potential of insurance as a mechanism to enhance the performance of risky conservation tenders

Toto Olita

UWA School of Agriculture and Environment

Research output: Thesis › Doctoral Thesis

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Abstract

Different types of uncertainties impact the performance of environmental programs. For example, landholders can be exposed to substantial cost variability when delivering environmental services. Therefore, they may demand additional financial incentives as compensation for undertaking 'risky' conservation projects. In such situations, conservation agencies may have to over-spend public funds to achieve their conservation targets. This research provides insights into the potential benefits of insurance mechanisms that may help alleviate landholders concerns about the uncertainties that exist in conservation tenders. We find that an actuarially fair insurance lowers optimal bids and potentially improves the cost-effectiveness of a conservation tender.

Original language	English
Qualification	Doctor of Philosophy
Awarding Institution	The University of Western Australia
Supervisors/Advisors	Iftekhar, Sayed, Supervisor Latacz-Lohmann, Uwe, Supervisor Schilizzi, Steven, Supervisor Boxall, Peter, Supervisor
Award date	18 Nov 2019
DOIs	https://doi.org/10.26182/5df9c5c881314
Publication status	Unpublished - 2019

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10.26182/5df9c5c881314

THESIS - DOCTOR OF PHILOSOPHY - OLITA Harriet Toto - 2019
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Cite this

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AB - Different types of uncertainties impact the performance of environmental programs. For example, landholders can be exposed to substantial cost variability when delivering environmental services. Therefore, they may demand additional financial incentives as compensation for undertaking 'risky' conservation projects. In such situations, conservation agencies may have to over-spend public funds to achieve their conservation targets. This research provides insights into the potential benefits of insurance mechanisms that may help alleviate landholders concerns about the uncertainties that exist in conservation tenders. We find that an actuarially fair insurance lowers optimal bids and potentially improves the cost-effectiveness of a conservation tender.

KW - Bidding theory

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KW - Embedded insurance

KW - Insurance subsidies

KW - Market-based instruments

KW - Optimal budget allocation

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KW - Public expenditure

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Investigating the potential of insurance as a mechanism to enhance the performance of risky conservation tenders

Abstract

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