SAMFUNN: Managing Thresholds and Uncertainty in Resource Economics

Many natural systems exhibit threshold effects where the system undergoes dramatic changes once certain variables exceed critical natural boundaries. Such thresholds have been identified in many sciences including Ecology and Climate Science. If these bo undaries are crossed, there may be severe environmental consequences affecting both human welfare and qualitative properties of ecosystems. These consequences may be short term or long term, and in many cases be irreversible. Although these effects are we ll known in the scientific literature, remarkably few studies examine the economic implications for resource management. The project will employ economists with considerable experience in integrating biological theory into economic models. In addition a renown ecologist will collaborate with the economists in order to ensure that the ecological theory is satisfactorily applied. This collaboration will lead to the development of analytical and numerical models which should facilitate the analysis of the role of threshold effects uncertainty in the formulation environmental policy.