Optimal management of strategic reserves of nonrenewable natural resources

This paper studies the stockpiling issue for an oil importing country that is likely to suffer embargoes, the occurrence and duration of which are uncertain. I show the existence of a decreasing reserves path that the country wants to attain in order to hedge against these disruptions. Allowing the importing country to invest in R&D in order to free itself from the embargo threat, I determine the optimal effort that should be engaged in research. The incentive to develop a backstop is shown to increase with the depletion of the reserves.     

Disaggregated intertemporal models with an exhaustible resource and technical advance

We compare results of four organizations of an economy that is dependent upon an irreplenishable resource but may develop a new technology that releases that dependence. We find a decentralized competitive organization can replicate the behavior of a centrally planned economy, given an appropriate distribution of initial wealth. This holds whether the R&D is done by the government or by the natural resource sector, so long as borrowing from other sectors is possible. Further, the economy's behavior is independent of whether the resource sector is monopolistic or competitive if and only if the production function is Cobb-Douglas.     

Pollution-Controlling Innovation in Oligopolistic Industries: Some Comparisons between Patent Races and Research Joint Ventures

Much of the literature on pollution-control innovation has focused on normative comparisons of exogenous regulatory policies in light of the incentives they induce on firms′ R&D efforts. In contrast, in the positive analysis below, both R&D incentives and regulatory policy arise endogenously as functions of market structure and external cost differentials. Incentives for pollution-controlling innovation are found to arise from within the industry in a patent race setting when innovation gives the race winner(s) a cost advantage over the other industry members. This cost advantage is shown to come about when innovating firms successfully use their influence to raise their rivals′ costs by bringing about a policy change forcing industry members to internalize pollution externalities. In contrast, an industry-wide research joint venture (RJV) has incentive to collusively prevent development of innovation unless environmental activists are sufficiently strong. This latter result is illustrated by the case U.S. vs Automobile Manufacturers Association, where the Justice Department found evidence that the "big three" used an RJV to slow the introduction of pollution-control innovation.     

Energy taxes and endogenous technological change

This paper studies the effects of a tax on energy use in a growth model where market structure is endogenous and jointly determined with the rate of technological change. Because this economy does not exhibit the scale effect (a positive relation between TFP growth and aggregate R&D), the tax has no effect on the steady-state growth rate. It has, however, important transitional effects that give rise to surprising results. Specifically, under the plausible assumption that energy demand is inelastic, there may exist a hump-shaped relation between the energy tax and welfare. This shape stems from the fact that the reallocation of resources from energy production to manufacturing triggers a temporary acceleration of TFP growth that generates a √-shaped time profile of consumption. If endogenous technological change raises consumption sufficiently fast and by a sufficient amount in the long run, and households are sufficiently patient, the tax raises welfare despite the fact that—in line with standard intuition—it lowers consumption in the short run.     

Regulatory attitudes and environmental innovation in a model combining internal and external R&D

The extent to which environmental regulatory institutions are either ‘green’ or ‘brown’ impacts not just the intensity of regulation at any moment, but also the incentives for the development of new pollution-control technologies. We set up a strategic model of R&D in which a polluter can deploy technologies developed in-house, or license technologies developed by specialist outsiders (an ‘eco-industry’). Polluters exert R&D effort and may even develop redundant technologies to improve the terms on which they procure technology from outside. We find that, while regulatory bias has an ambiguous impact on the best-available technology, strategic delegation to systematically biased regulators can improve social welfare.     

Is there really a green paradox?

In the absence of a CO₂ tax, the anticipation of a cheaper renewable backstop increases current emissions of CO₂. Since the date at which renewables are phased in is brought forward and more generally future emissions of CO₂ will decrease, the effect on global warming is unclear. Green welfare falls if the backstop is relatively expensive and full exhaustion of fossil fuels is optimal, but may increase if the backstop is sufficiently cheap relative to the cost of extracting the last drop of fossil fuels plus marginal global warming damages as then it is attractive to leave more fossil fuels unexploited and thus limit CO₂ emissions. We establish these results by analyzing depletion of non-renewable fossil fuels followed by a switch to a clean renewable backstop, paying attention to timing of the switch and the amount of fossil fuels remaining unexploited. We also discuss the potential for limit pricing when the non-renewable resource is owned by a monopolist. Finally, we show that if backstops are already used and more backstops become economically viable as the price of fossil fuels rises, a lower cost of the backstop will either postpone fossil fuel exhaustion or leave more fossil fuel in situ, thus boosting green welfare. However, if a market economy does not internalize global warming externalities and renewables have not kicked in yet, full exhaustion of fossil fuel will occur in finite time and a backstop subsidy always curbs green welfare.     

Is there really a green paradox?

In the absence of a CO₂ tax, the anticipation of a cheaper renewable backstop increases current emissions of CO₂. Since the date at which renewables are phased in is brought forward and more generally future emissions of CO₂ will decrease, the effect on global warming is unclear. Green welfare falls if the backstop is relatively expensive and full exhaustion of fossil fuels is optimal, but may increase if the backstop is sufficiently cheap relative to the cost of extracting the last drop of fossil fuels plus marginal global warming damages as then it is attractive to leave more fossil fuels unexploited and thus limit CO₂ emissions. We establish these results by analyzing depletion of non-renewable fossil fuels followed by a switch to a clean renewable backstop, paying attention to timing of the switch and the amount of fossil fuels remaining unexploited. We also discuss the potential for limit pricing when the non-renewable resource is owned by a monopolist. Finally, we show that if backstops are already used and more backstops become economically viable as the price of fossil fuels rises, a lower cost of the backstop will either postpone fossil fuel exhaustion or leave more fossil fuel in situ, thus boosting green welfare. However, if a market economy does not internalize global warming externalities and renewables have not kicked in yet, full exhaustion of fossil fuel will occur in finite time and a backstop subsidy always curbs green welfare.     

Non-cooperative and cooperative climate policies with anticipated breakthrough technology

Global warming can be curbed by pricing carbon emissions and thus substituting fossil fuel with renewable energy consumption. Breakthrough technologies (e.g., fusion energy) can reduce the cost of such policies. However, the chance of such a technology coming to market depends on investment. We model breakthroughs as an irreversible tipping point in a multi-country world, with different degrees of international cooperation. We show that international spill-over effects of R&D in carbon-free technologies lead to double free-riding, strategic over-pollution and underinvestment in green R&D, thus making climate change mitigation more difficult. We also show how the demand structure determines whether carbon pricing and R&D policies are substitutes or complements.     

Green tax reform,endogenous innovation and the growth dividend

We study theoretically and numerically the effects of an environmental tax reform using endogenous growth theory. In the theoretical segment, mobile labor between manufacturing and R&D activities, and elasticity of substitution between labor and energy in manufacturing lower than unity allow for a growth dividend, even if we consider preexisting tax distortions. The scope for innovation is reduced when we consider direct financial investment in the lab, or elastic labor supply. We then apply the core theoretical model to a real growing economy and find that a boost in long-run economic growth following such a carbon policy is a possible outcome. Redistribution of additional carbon tax revenue by lowering capital taxation performs best in terms of effciency measured by aggregate welfare. In terms of equity among social segments the progressive character of lump-sum redistribution fails when we consider very high emissions reduction targets.     

Putting free-riding to work: A Partnership Solution to the common-property problem

The common-property problem results in excessive mining, hunting, and extraction of oil and water. The same phenomenon is also responsible for excessive investment in R&D and excessive outlays in rent-seeking contests. We propose a “Partnership Solution” to eliminate or at least mitigate these excesses. Each of N players joins a partnership in the first stage and chooses his effort in the second stage. Under the rules of a partnership, each member must pay his own cost of effort but receives an equal share of the partnership's revenue. The incentive to free-ride created by such partnerships turns out to be beneficial since it naturally offsets the excessive effort inherent in such problems. In our two-stage game, this institutional arrangement can, under specified circumstances, induce the social optimum in a subgame-perfect equilibrium: no one has a unilateral incentive (1) to switch to another partnership (or create a new partnership) in the first stage or (2) to deviate from socially optimal actions in the second stage. The game may have other subgame-perfect equilibria, but the one associated with the “Partnership Solution” is strictly preferred by every player. We also propose a modification of the first stage which generates a unique subgame-perfect equilibrium. Antitrust authorities should recognize that partnerships can have a less benign use. By organizing as competing partnerships, an industry can reduce the “excessive” output of Cournot oligopoly to the monopoly level. Since no partner has any incentive to overproduce in the current period, there is no need to deter cheating with threats of future punishments.     

Carbon taxation,OPEC and the end of oil

I develop a differential game between an oil cartel and an importer investing in research and development (R&D) to reduce the cost of a green substitute to oil. In equilibrium, the cartel is forced to deter the substitute, which thus imposes a price ceiling falling over time. Credible carbon taxes are below the Pigovian level, implying the importer cannot internalise the full pollution externality, much less capture resource rents. Without carbon pricing, the importer curtails long-run pollution using a costly R&D programme. Normatively, climate policy will be more expensive if relying on green R&D programmes only.     

Distribution pattern, reproductive biology, and fishery of the wedge sole Dicologlossa cuneata in the Gulf of Cadiz, south-west Spain

The wedge sole Dicologlossa cuneata (Moreau, 1881) is a coastal species that lives along the inner shelf waters of the Gulf of Cadiz down to a depth of 115 m. Its fishery, the size composition of the exploited population, and its reproduction have been studied on the basis of data acquired from commercial statistics from 1984 to 1994 and from sampling carried out during 1993 and 1994. The relative abundance of the species and its geographic and bathymetric distribution have been examined by analysis of four trawl surveys carried out from 1992 to 1994. D. cuneata is captured mainly by the trawl fleet, and to a lesser extent by gillnet gears. Wedge sole fishery has a marked seasonality. Size-frequency distributions from commercial samples and from bottom-trawl surveys are very similar, ranging from 12 to 26 cm total body length (TL). D. cuneata is a “repeat-spawner”. Peak spawning is from January to May. Females attain sexual maturity at 18 cm TL, while sexually mature males have been observed at 15 cm TL. The flexibility of the spawning strategy of D. cuneata throughout its distribution range is discussed. The scarcity of small specimens in the monthly samples and sequential spawning throughout the year prevented the estimation of growth parameters by means of length-frequency analysis. D. cuneata is present in greatest abundances in the sandy–muddy bottoms of the Guadalquivir River mouth at 15 to 30 m depth. Its optimum habitat coincides with the principal commercial fishing grounds. The possibility of reproductive vertical migration is discussed, but more precise data are needed before a viable hypothesis can be made. Received: 1 July 1997 / Accepted: 27 November 1997     

Status and trends in research and development projects in the mountains: A situational analysis in the Indian Himalaya

The mountains hold the key to global ecological and social stability by virtue of being centres of biological and cultural diversity and the storehouse for water and other resources. However, they are becoming unable to sustain the demands of the changing life style of the growing number of inhabitants as well as the population in the plains and, therefore, the resources are depleting rapidly. Inadequacy of research and development (R&D) projects undertaken in mountain ecosystems is, perhaps, a major factor that has not enabled us to evolve and introduce suitable interventions to replenish and restore the health of the degraded mountains. In this article, taking the Indian Himalayan region as a case study, an effort has been made to understand the adequacy and appropriateness of R&D projects in mountain ecosystems by analysing the research and development projects implemented in this region from 1985–86 to1998–99. The analysis revealed inadequacy in the number and budgets of R&D projects implemented in this mountain ecosystem as a whole as well as in specific subject areas; the number of R&D projects implemented during this period was only 5.28% of the total projects, with a fund allocation of 4.45% of the total R&D budget of India, which appears to be inadequate considering the geophysical and bio-social importance of the Himalaya. The finding suggests that national funding agencies of mountain nations need to increase the number of R&D projects in mountain regions as a priority, with the intention of developing scientific packages capable of restoring the degraded ecosystem of the mountains and ensuring their sustainable development.     

The role of environmental activity integration into the R&D department to obtain competitive advantage

The objective of this work is to examine to what degree the integration between R&D and environmental departments facilitates the achievement of an environmental practice-derived competitive advantage. With this aim, we surveyed 110 International Organization for Standardization (ISO) 14001 certified factories. The results reveal that the integration of environmental action into the R&D department enhances a company's reputation through the product quality and image. Moreover, the said integration positively influences the company's overall innovative capability and, hence, its ability to penetrate international markets.     

A simulation model of rhizome networks for Fallopia japonica (Japanese knotweed) in the United Kingdom

Fallopia japonica (Japanese knotweed) is an aggressively invasive herbaceous perennial that causes substantial economic and environmental damage in the United Kingdom (UK). As such, it is of considerable concern to councils, environmental groups, private landowners and property developers. We construct a 3D correlated random walk model of the development of the subterranean rhizome network for a single stand of F. japonica. The formulation of this model uses detailed knowledge of the morphology and physiology of the plant, both of which differ in the UK to that of its native habitat due to factors including a lack of predation and competition, longer growth seasons and favourable environmental conditions in the UK. Field data obtained as a part of this study are discussed and used in the model for parameterisation and validation. The simulation captures the field data well and predicts, for example, quadratic growth in time for the stand area. Furthermore, the role of a selection of parameters on long-term stand development are discussed, highlighting some key factors affecting vegetative spread rates.     

A concept model to estimate the potential distribution of the Asiatic citrus psyllid (Diaphorina citri Kuwayama) in Australia under climate change—A means for assessing biosecurity risk

Increasing global temperatures as a result of climate change are widely considered inevitable for Australia. Despite this, the specific effects of climate change on Australian agriculture are little studied and the effects on agricultural pests and diseases are virtually unknown. In this paper we consider the impact of climate change on the Asiatic citrus psyllid (Diaphorina citri Kuwayama [Hemiptera: Psyllidae]); one of two known vectors of huanglongbing (citrus greening); a debilitating disease which is caused in Asia by a phloem-limited bacterium ‘Candidatus Liberibacter asiaticus’ (α-Proteobacteria). D. citri does not occur in Australia, but if introduced would pose a major threat to the viability of the Australian citrus industry and to native Citrus species. This paper presents an approach developed to understand how climate change may influence the behaviour, distribution and breeding potential of D. citri. Here we developed and describe an initial dynamic point model of D. citri biology in relation to its citrus host and applied it to a scenario of increasing temperatures, as indicators of climate change, on a continental scale. A comparison between model outputs for the three time frames considered (1990, 2030 and 2070) confirms that increasing temperatures projected under climate change will affect the timing and duration of new citrus growth (flush) necessary for psyllid development throughout Australia. Flushing will start progressively earlier as the temperature increases and be of shorter duration. There will also be a gradual southward expansion of shorter durations of the occurrence of flush. Increasing temperatures will impact on D. citri both directly through alteration of its temperature dependant development cycle and indirectly through the impact on the host flushing cycle. For the whole of Australia, a comparison between model outputs for the three scenarios considered indicates the seasonality of D. citri development will change to match changes in citrus flush initiation. Results indicate that the risk of establishment by D. citri is projected to decrease under increasing temperatures, mainly due to shortened intervals when it can feed on new leaf flushes of the host. However, the spatially heterogeneous results also suggest that regions located on the southern coastline of Australia could become more suitable for D. citri than projected under current temperatures. These results confirm the value of a linked host-pest approach as based on D. citri climatic requirements alone the model would have accounted only for shorter development periods and predicted an increased risk of potential distribution.     

藤本植物在城市垂直绿化中的选择与配置

藤本植物是指不能自由直立生长,需要借助于其他植物或支撑物的支持才能向上生长的植物的总称。藤本植物具有生长迅速、占地面积少、绿化面积大、种植管理容易等优点,它在现代城市绿化,特别是城市垂直绿化中运用十分广泛。城市垂直绿化的形式可分为:墙面绿化、立柱绿化、篱垣绿化、护坡绿化、棚架绿化、屋顶绿化。总结了藤本植物的特点和它的运用原则,重点介绍了它在不同垂直绿化形式中的具体的选择与配置技术。     

Coupling soil water and shoot dynamics in three grass species: A spatial stochastic model on water competition in Neotropical savanna

Savannas are ecosystems known for their high environmental and economic value. They cover at least 20% of the global land surface and, in some cases, can act as a boundary between tropical rainforest and deserts. Water is an important determinant of savanna ecosystems.In this paper, we present a theoretical stochastic model of root competition for water, which couples, soil water availability, phenology, and root and shoot architecture applied to three Neotropical savanna grasses. Soil moisture was simulated using a daily balance, as proposed by Rodriguez-Iturbe et al. [Rodriguez-Iturbe, I., Porporato, A., Ridolfi, L., Isham, V., Cox, D.R., 1999. Probabilistic modelling of water balance at a point: the role of climate, soil and vegetation. Proc. R. Soc. London, Ser. A 455, 3789–3805.]. To simulate rainfall stochasticity, we used daily precipitation data from the airport weather station in the State of Barinas, Venezuela, for the period 1991–2007. Competition among neighbouring plants took into account the spatial distribution of the individuals. As a final step, the model allowed us to calculate the shoot dynamic of the species as a function of soil water availability.Using these data, we compared the behaviour of isolated plants, pairs and trios, and we found below-ground competition to be a fundamental component of global (shoot + root) competition. Finally, our model suggests various circumstances that allow poor competitor plants to coexist in competition for water with more successful competitors. Apparently, this is not only due to transpiration rates, but also to differences in shoot emergence and shoot growth.     

Concepts and measures of natural resource scarcity with a summary of recent trends

A general model of resource scarcity is presented from which previous models can be derived as special cases. Previous models of scarcity are compared and contrasted, refining the concept of scarcity and leading to a resolution of current disputes over the appropriate measure of scarcity. An update of the original work done by Barnett and Morse is summarized, leading to reconsideration of their original conclusions. It is found that energy and forest products experienced increasing scarcity during the 1970s.     

The role of technological change

We develop an optimal growth model that includes several important new features. First, technological change is endogenously related to the growth of “knowledge.” Investment may be directed either towards physical capital or knowledge (or both). Knowledge becomes an effective substitute for scarce resources by increasing the technical efficiency of resource utilization both for consumption and in capital. Nevertheless, a finite quantity resource must be embodied in capital and a finite flow is required for depreciation. Thus, there is an upper limit to technical efficiency and economic growth is thus ultimately limited by the availability of renewable resources. For a simple aggregate production function it is shown that technical efficiency never approaches unity on an optimal path.