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on Resource Economics |
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Issue of 2011‒07‒02
six papers chosen by |
| By: | Anthony J. Venables |
| Abstract: | This paper develops a model in which supply of a non-renewable resource can adjust through two margins: the rate of depletion and the rate of field opening. Faster depletion of existing fields means that less of the resource can ultimately be extracted, and optimal depletion of open fields follows a (modified) Hotelling rule. Opening a new field involves sinking a capital cost, and the timing of field opening is chosen to maximize the present value of the field. Output dynamics depend on both depletion and field opening, and supply responses to price changes are studied. In contrast to Hotelling, the long run equilibrium rate of growth of prices is independent of the rate of intereset, depending instead on characteristics of demand and geologically determined supply. |
| Keywords: | Natural resource, Depletion, Hotelling, Fossil fuel, Carbon tax |
| JEL: | Q3 Q5 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:554&r=res |
| By: | Carlos Ordás Criado (ETH Zurich, Center for Energy Policy and Economics (CEPE).); Simone Valente (ETH Zurich, Center of Economic Research (CER).); Thanasis Stengos (University of Guelph.) |
| Abstract: | Stabilizing pollution levels in the long run is a pre-requisite for sustainable growth. We develop a neoclassical growth model with endogenous emission reduction predicting that, along optimal sustainable paths, pollution growth rates are (i) positively related to output growth (scale effect) and (ii) negatively related to emission levels (defensive effect). This dynamic law reduces to a convergence equation that is empirically tested for two major and regulated air pollutants - sulfur oxides and nitrogen oxides - with a panel of 25 European countries spanning the years 1980-2005. Traditional parametric models are rejected by the data. More flexible regression techniques confirm the existence of both the scale and the defensive effect, supporting the model predictions. |
| Keywords: | Air pollution, convergence, economic growth, nonparametric regressions. |
| JEL: | C14 C23 O13 Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2011-06.&r=res |
| By: | Gregmar Galinato; Suzette Galinato (School of Economic Sciences, Washington State University) |
| Abstract: | This article formulates a structural empirical model that measures the short run and long run effect of economic growth, political stability and corruption control on carbon dioxide (CO2) emissions from deforestation. Income has a negative effect on forest cover in the short run but it does not have any long run effect. In contrast, political stability and corruption have relatively smaller effects on forest cover in the short run but they have lingering long run effects. We derive a U-shaped forest-income curve where political stability and corruption control do not significantly affect the income turning point but both variables shift the curve up or down. The resulting CO2 emission-income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions-income curve leading to smaller changes of CO2 emissions per unit change in income. |
| Keywords: | Deforestation, Environmental Kuznets Curve, Political stability |
| JEL: | O10 Q23 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:galinato-5&r=res |
| By: | James Roumasset (Department of Economics, University of Hawaii at Manoa and University of Hawai‘i Economic Research Organization); Christopher Wada (University of Hawai‘i Economic Research Organization) |
| Abstract: | Optimal recycling of minerals can be thought of as an integral part of the theory of the mine. In this paper, we consider the role that wastewater recycling plays in the optimal extraction of groundwater, a renewable resource. We develop a two-sector dynamic optimization model to solve for the optimal trajectories of groundwater extraction and water recycling. For the case of spatially increasing recycling costs, recycled water serves as a supplemental resource in transition to the steady state. For constant unit recycling cost, recycled wastewater is eventually used as a sector-specific backstop for agricultural users, while desalination supplements household groundwater in the steady state. In both cases, recycling water increases welfare by shifting demand away from the aquifer, thus delaying implementation of costly desalination. The model provides guidance on when and how much to develop resource alternatives. |
| Keywords: | Renewable resources, dynamic optimization, groundwater allocation, wastewater reuse, recycling, reclamation, water quality |
| JEL: | Q25 Q28 C6 |
| Date: | 2011–05–06 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:201105&r=res |
| By: | Gillespie, Robert; Bennett, Jeff |
| Abstract: | Australian governments are committed to the expansion of marine protected areas (MPAs) in Australian waters and have already established over 200 MPAs. However, this policy direction has a range of costs and benefits for the community which have largely remained unquantified. One of the main benefits of establishing MPAs are the non use values that the community for the protection of marine biodiversity. This study uses a dichotomous choice contingent valuation format with follow-up open-ended willingness to pay question to estimate these non use values for the establishment of MPAs in South-west Marine Region of Australia. It was found that on average Australian households would be WTP $104 for the establishment of MPAs that cover 10% of the South-west Marine Region. Aggregating this mean WTP estimate to 50% of the population of Australian households gives an aggregate WTP of $400M. However, whether the establishment of MPAs in the South-west Marine Region is economically efficient requires a consideration of all the potential costs and benefits. Other relevant costs and benefits for inclusion in a benefit cost analysis would include those associated with displacement of commercial and non-commercial uses, additional planning, compliance and monitoring costs as well as any predicted increases in commercial and non-commercial use values. If the net costs of establishing MPA over 10% of the South-west Marine Region are less than $400M, then the non-use benefits of establishing MPAs would exceed the other net costs and it would be considered to be economically efficient and desirable from a community welfare perspective. Given the difficulties of estimating precise WTP values from dichotomous choice data, any BCA of MPAs in the South-west Marine Region, incorporating the results of this study, should undertake sensitivity testing that includes the range of values reported including dichotomous choice and openended means to determine the robustness of BCA results to variations in the welfare estimate |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107582&r=res |
| By: | Scheufele, Gabriela; Bennett, Jeff |
| Abstract: | The concept of ecosystem resilience is being increasingly discussed as a driver of biodiversity values. It implies that marginal deteriorations in ecosystem conditions can abruptly result in non-marginal and irreversible changes in ecosystem functioning and the economic values that the ecosystem generates. This challenges the traditional approach to the valuation of biodiversity, which has focused on quantifying values attached to individual species or other elements of ecosystems. As yet, little is known about the value society attaches to changes in ecosystem resilience. This paper investigates this value. A discrete choice experiment is used to estimate implicit prices for attributes used to describe ecosystem resilience using the Border Ranges rainforests in Australia as an example. We find evidence that implicit prices for the attributes describing ecosystem resilience are positive and statistically significantly different from zero. |
| Keywords: | ecosystem resilience, discrete choice experiments, implicit prices, willingness to pay space, Environmental Economics and Policy, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:107806&r=res |