Advancement to Candidacy Presentation: “Dynamic Investment in Ecosystem Restoration”, Jonah Danziger

Speaker

Jonah Danziger, University of California, Santa Barbara

Biography

Jonah Danziger is a Ph.D. Student in Economics at the University of California, Santa Barbara. His research focuses on Environmental and Urban Economics. Jonah has worked as Graduate Student Researcher at the Environmental Markets Lab (emLab) and the Economic Forecast Project (EFP). Prior to UCSB, he graduated from Oberlin College with a BA in Economics. Following this, Jonah worked as a Research Analyst at the Federal Reserve Bank of Dallas where he assisted economists in their own research and creating policy briefs for the bank president.

Title

“Dynamic Investment in Ecosystem Restoration”

Abstract

There is growing acknowledgment of the need to restore degraded environments. This paper studies optimal investment in ecosystem restoration under environmental change. We develop an optimal control model of the restoration decision to explicitly characterize the optimal extent and timing of restoration given time-dependent marginal damages. We provide the first results on optimal dynamic investment in ecosystem restoration, highlighting the important role that growth in restored patches plays in shaping the time profile of investment. We then apply the model in a numerical simulation of coastal wetlands restoration in Huntington Beach, California, that accounts for projected sea-level rise, uncertainty over flooding severity, and the option to abandon damage properties. Our results show that early investments in restoration are optimal in order build up a wetlands stock that can mitigate future flooding damages exacerbated by sea-level rise. We find large option values associated with delaying irreversible decisions to abandon damaged properties.

The authors acknowledge funding from the University of California, Office of the President, National Laboratory Fees Research Program.

JEL Codes: Q2, Q24, Q25, Q57

Event Details

Jonah will be presenting his Advancement to Candidacy paper, “Dynamic Investment in Ecosystem Restoration”. To access the Advancement paper, you must have an active UCSB NetID and password.