
Contents
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7.1 Introduction 7.1 Introduction
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7.2 Substitution in production 7.2 Substitution in production
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7.3 Substitution in a generalized model of joint production 7.3 Substitution in a generalized model of joint production
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7.4 Substitution and public goods 7.4 Substitution and public goods
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7.5 Net substitutes and complements 7.5 Net substitutes and complements
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7.6 Conditional substitutes and complements 7.6 Conditional substitutes and complements
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7.7 Summary and conclusions 7.7 Summary and conclusions
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References References
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7 Substitutability and the Valuation of Natural Capital
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Published:May 2021
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Abstract
Chapter 7 considers the substitutability between produced and natural capital—assets used in the production of goods and services, and between environmental and other goods and services. It shows the ways in which the limits of substitutability are captured in both production and utility functions, and what this means for conservation. The chapter also discusses the relation between substitutability and the value of environmental inputs, using concepts of gross substitutability and complementarity, and the elasticity of substitution. The authors also note that the relative value of environmental inputs is frequently dependent on the environmental conditions under which production takes place.
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