2021
  • Non-ICIMOD publication

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Determining the insurance value of ecosystems: A discrete choice study on natural hazard protection by forests

  • Christian Unterberger
  • Roland Olschewski
  • Summary

Forest ecosystems provide multiple services. In mountainous regions, protection against gravitational hazards is of particular importance. By preventing soil erosion and functioning as natural barriers and buffers, forests protect the population and infrastructure against avalanches and rock falls. The higher the forests' capacity to regulate and withstand external disturbances and adverse effects the higher the insurance value they provide. To operationalize the insurance value approach and to integrate it into climate change adaptation and disaster risk management, information about supply and demand of this ecosystem service is required. While assessing the capacity of forests to provide protection services has been a longstanding research focus, knowledge about the population's demand for insurance services provided by forests is still lacking. Our study analyzes the preferences of beneficiaries of such services. We conducted a choice experiment in several Swiss municipalities exposed to avalanches and rock falls, accounting for different spatial and institutional contexts. We found that households are willing to pay a significant amount for forest management that enhances forests' insurance services and reduces natural hazard risks. The results help to inform decision making in natural hazard management, and represent a further step towards operationalizing the insurance value of ecosystems.

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