Rain-index insurance is strongly advocated in many parts of the developing world to help farmers to cope with climatic risk that prevail in (semi-)arid rangelands due to low and highly uncertain rainfall. We present a modeling analysis of how the availability of rain-index insurance affects the...

We study optimal fishery management in an age-structured, bio-economic model where two age classes can be harvested independently. We show that the optimal amount of catch differs with age classes, and we derive conditions under which it is optimal to harvest only one age class. Our main policy...

Efficiency and sustainability often clash if limited-tenure use rights for renewable natural resources are rented to private resource managers. We introduce a mechanism reconciling these two issues for a stochastically developing natural resource. The mechanism selects the most patient and,...

Engineering the climate via Solar Radiation Management (SRM) is increasingly considered as a component of future climate policies. We study the strategic incentives for countries to choose the level of SRM at different times in the future, accounting for the regionally uneven effect of SRM on...

We study optimal subsidies for renewable energy (RE) generation to internalize external benefits from intertemporal learning-by-doing spillovers, taking into account increasing marginal costs at the industry level due to limited availability of sites suitable for RE. We find that the optimal RE...

We study a commons problem under uncertainty, where individual actions affect the risk of a future damage event. We show that for risk-averse agents, an extra risk on the amount of the damage induces more precautionary actions in Nash equilibrium. Similarly, for prudent agents an extra risk in...

We elicit risk preferences and their determinants through a survey and field experiments for cattle farmers in Namibia who are subject to heterogeneous environmental risk. Survey data is complemented with precipitation data simulated by a climate model to analyze the relationship between risk...

Decision-making about economy-environment systems is often characterized by deep uncertainties. We provide an axiomatic foundation of preferences over lotteries with known payoffs over known states of nature and unknown probabilities of these outcomes (“Knightian uncertainty"). We elaborate...