17.What impact does insecure or ill-defined property rights have on land use? 18
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17.What impact does insecure or ill-defined property rights have on land use? 18. What are the six market-based solutions to the inefficient use of our lands? 19.What services, environmental and non-environmental, do forests provide us with? 20. What is the modified Hotelling's rule for a forestry manager? 21.How does the optimal forest rotation model (i.e., Faustmann model) change when we go from a single rotation model to a multiple rotation model? What happens to the rotation time period? Why? 22.What does the Hartmann model imply may occur in the optimal forest rotation model? 23.What is the poverty trap and how does it relate to forest use?Explanation / Answer
17 - In difficult times when water is scarce, bargaining is more likely to break down and dispute to arise if property rights are ill-defined. Second, having tenure security reduces the likelihood of a farm household to experience land disputes by about 40%. secure property rights are more likely to reduce land disputes when households face adverse weather shocks, hence by reducing the vulnerability to water scarcity. We further document that water scarcity has a stronger impact on land disputes when the marginal value of land is larger
18 -If designed properly, ecosystem service markets can achieve this by giving landowners financial incentives to provide these services. However, many ecosystem services have public goods aspects and as such markets for them have not formed. Unless these services are co-products of marketable, private good type ecosystem services, markets will fail to generate incentives for their provision. Furthermore, creating markets that can capture at least the private value of ecosystem services currently is impossible for many services not already traded, due to the limits to accurate measurement or the associated high transaction costs. Where measurement is possible, markets that price ecosystem services solely on the basis of their private benefits could attract high transaction volumes, but this is likely to result in a loss of services that are nonexclusive, non-rival, or carry substantial passive use values. The challenge is to design markets that incentivate landowners to produce ecosystem services at socially efficient levels. We argue that this requires a carefully crafted regulatory framework to ensure that the likelihood of a net loss of ecosystem service values is minimized. At a minimum, such a framework would define the units for the various services as well as a reasonably accurate quantification mechanism, and it would entail public payments for landowners who provide scarce services that generate public benefits. It would also establish monitoring requirements and a chain of liability backed by sufficient securitization of service contracts. If these requirements are fulfilled, market-based approaches and the private awareness, initiative, and capital they can mobilize may play an important part in overall ecosystem service conservation efforts. Contrariwise, given the large potential for market failure, the commodification of ecosystem services by itself cannot be expected to yield outcomes that protect the public interest.
19 -The forest provides us with Ecological services, Economic services, Sociocultural services and Scenic and landscape services.
20- Hotelling rule showed that if the market is perfectly competitive, the net price minus marginal extraction cost must rise at a rate equal to the rate of interest. This is known as Hotelling’s rule. It is at the heart of the economics of natural resources.
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