Chapter 4 Economics of nature preservation This chapter develops some of the economic theory relevant to decisions about nature preservation. The theory is motivated by a discussion of current issues: the disposition of wilderness lands and the protection of endangered species. It discusses two key concepts: uncertainty and irreversibility. Uncertainty is pervasive economic life of course. But more than the usual degree of uncertainty surrounds the potential future benefits from conserving ecosystems. Irreversibility is clearly central to thinking about endangered species or ecosystems because extinction or loss of wildlands is indeed irreversible. The chapter develops a model of decision making under uncertainty and irreversibility. The model proves that the optimal use of a natural environment is more likely to be continued preservation where the passage of time brings information about potential future benefits of preservation than where it does not. A related result is that the fraction of the area optimally preserved is larger. Finally it presents applications of the concepts and models developed for terrestrial ecosystems. It has relevance to hydrospheric and atmospheric environments as well.