Policy Instruments and Management
Different economic policy instruments exist to change behavior and decision-making towards the environment. In the PIM cluster research focuses on the design and evaluation of economic instruments, considering instrument efficiency and effectiveness and instrument performance under uncertainty and imperfect information.
Examples include subsidies to enhance the transition to renewable energy sources and water pricing, self-enforcing agreements, incentives for community-based nature conservation and natural resource management, payments for ecosystem services and contested water rights and the stability of water allocation agreements at transboundary scale using game theory. Also the demand and supply of climate change insurance to mitigate future impacts on climate-vulnerable households and economic sectors is estimated, both in the developed and developing world.
Most of the research is conducted in small-scale experimental settings, adding to theoretical advancements in the growing field of behavioral and experimental economics. In view of the fact that economic instruments are embedded in institutional structures, special attention is paid to the broader context of environmental governance. Currently 2 PhD researchers work in the cluster on payments for watershed and climate change services. The economic instruments research cluster is led by Dr. Jetske Bouma.
Projects
Key publications
- Aalbers, R., van der Heijden, E., Potters, J., van Soest, D.P. & Vollebergh, H. (2009). Technology Adoption Subsidies: An Experiment with Managers. Energy Economics 31(3), 431-442.
- Arguedas, C. & van Soest, D.P. (2009). On reducing the windfall profits in environmental subsidy programs. Journal of Environmental Economics and Management 58(2), 192-205.
- Bouma, J.A., Bulte, E.H. & Soest, D.P. van (2008). Trust and cooperation – Social capital and community resource management. Journal of Environmental Economics and Management, 56, 155-166.
- Botzen, W.J.W. & van den Bergh, J.C.J.M. (2009). Bounded rationality, climate risks and insurance: Is there a market for natural disasters? Land Economics 85(2), 265-278.
- Brouwer, R. & Akter, S. (2010). Informing micro insurance contract design to mitigate climate change catastrophe risks using choice experiments. Environmental Hazards, 9(1), 67-81.
