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Pythia's Revenge: On the Economic Value of Ecological Risk Precaution

According to the German Advisory Council on Global Change, the so-called Pythia and Pandora risk types pose particular challenges to environmental management due to their potentially catastrophic nature. At present, neither their damage potential nor their probability distribution can be estimated. Fortunately, there is evidence that a partial protection against such risks is possible. The respective measures focus on maintaining biological diversity and fundamental ecosystem functions. However, there is no economically quantified information on the amount of societal resources that should be committed to such a protection against ecological risks. We outline the fundamentals of ecological risk precaution strategies in the face of a highly uncertain future, and provide an empirical estimation of the population's willingness to pay for these strategies.