On monopoly power in extractive resource markets

Potential monopoly power in extractive resource markets is reduced by the depletability of reserves. This paper examines the dependence of monopoly power on resource rent, and on uncertainty over future reserve levels. A model is developed that treats reserves as “inventories” that fluctuate stochastically over time as a result of exploration, development, and production activities. Solutions of the model illustrate how output and monopoly power vary with the elasticity of demand, rent as a fraction of price, and the variance of reserve fluctuations. It is shown that uncertainty over future reserves can speed up production and by reducing resource rent, restore part of the monopoly power otherwise lost because of depletion. Antitrust implications are discussed, with reference to several resources.     

Resource Depletion and Sustainability in Small Open Economies

Exogenous price changes affect the amount that a small country exporting natural resource commodities must invest to sustain its consumption level. The necessary amount is given by the difference between Hotelling rent and the discounted sum of future terms-of-trade effects (capital gains). The latter term is found to be large relative to the former in the case of petroleum depletion in Indonesia. This suggests that resource-rich countries will need to invest more than previously expected to sustain their consumption levels, if natural resource prices continue their long-term historical decline.     

A model of mining and exploring for exhaustible resources

A model of extractive industries is developed, in which firms select the time-paths of exploration and extraction that maximize their present values. Two externalities unique to the exploration process are found to distort industry behavior. Industry behavior is simulated under conditions of competition, monopoly, and central management, and the effects of percentage depletion allowances and changes in the discount rate are observed. Monopolists overconserve the resource and hold excess reserves; competitors who enter mineral lands freely tend to overexplore and overextract; percentage depletion allowances decrease reserves; and higher discount rates reduce extraction in the long run.     

Natural resource depletion and the economic performance of local districts: suggestions from a within-country analysis

SUMMARY

Studying the interactions among ecological factors and economic performance measured at the local scale is necessary to suggest policies able to mitigate natural resource depletion in complex ecosystems, like those in the Mediterranean region. The aim of this paper is to explore the relationship among natural resource depletion due to land degradation (LD) and some economic characteristics of local labour systems in Italy, a country where many areas, especially southern regions, are vulnerable. LD was estimated using an environmental sensitive area index, covering the national territory at a fine scale, which takes into account ecological factors such as climate, soil and vegetation. Economic indicators used here consider per capita income, land productivity, production and labour productivity by sector (agriculture, industry and services). A regression analysis was built-up at the LLS scale using an index change over time (1990–2000) as dependent variable and economic variables as predictors. A principal component analysis (PCA) was carried out to synthesise the outputs of the regression analysis. Results indicate a negative relationship among per capita income and LD over the whole study area. However, other variables showed a significant correlation with the dependent variable, highlighting the importance of local factors to increase land vulnerability. In order to clarify the contribution of economic factors to natural resource depletion it is necessary to drive integrate policies to combat LD in dry Mediterranean areas.     

Economic growth,international trade,and the depletion or conservation of renewable natural resources

Conservation of renewable natural resources and promotion of economic growth are both sustainable development goals. Here, we study the interdependency between economic growth, international trade, and the use of renewable natural resources—under alternative institutional settings of either open access or full property rights—in an endogenous growth model. We find that if the resource is depleted over time, consumption growth is reduced. Economic growth and international trade only impact resource use when the resource is harvested under full property rights. Then, widening international trade can lead countries to shift from conservation to depletion. Changes in the institutional setting of resource use in one country may have repercussions on trading partners. Our results indicate potential trade-offs between the sustainable development goals and imply that policies focusing on resource use or trade (e.g., international trade bans or certified trade) are not sufficient to prevent resource depletion.     

Sustainability and the measurement of future paths in genuine savings: case studies

This paper extrapolates future paths of genuine savings (GS) by using our integrated assessment model. The results with the base case (BC) indicate that both GS without population change (GS) and GS with population change (GSn) are almost positive in OECD countries in the twenty-first century (satisfying the necessary but insufficient condition for sustainability); those numbers are projected to be negative in 2100. Asia (ASIA), the Middle East and Africa (MEAF), the former Soviet Union and Eastern Europe (FSEE), and the world show upward trends for both values, showing negative signs in 2010 and positive signs after 2050 (in ASIA, MEAF, and the world) and in 2100 (in FSEE). The values in Latin America (LAMR) remain negative throughout. We examine additional following three cases: demand reduction (DR), carbon dioxide (CO₂) emissions reduction (CR), and population reduction (PR). The GSn results compared to the BC indicate that (1) GSn in DR is similar to that of BC, (2) GSn in PR is slightly higher than that of BC, and (3) GSn in CR is unexpectedly lower than that of BC. This GSn reduction in the CR case derives from the fact that the term for calculating resource depletion (especially resource rent, which equals the difference between price and cost) in GS and GSn increased, leading to a greater term being subtracted from gross savings. The resource price increases with the marginal price of natural gas, given the energy-source shift in reducing CO₂ emissions, from cheap coal to expensive natural gas.     

Effect of technology convergence for tablet PC on potential environmental impacts from heavy metals

The technology convergence integrating multiple devices into a single one is now a distinct trend in electronic industry. This trend can lead to a decrease in the use of rare and toxic heavy metals due to resource sharing, or an increase due to the application of new and auxiliary technology. This study investigates the effect of technology convergence for tablet PC on hazardous waste, resource depletion, and toxicity potentials from heavy metals in electronic devices, considering how many single devices (i.e., netbook computer, electronic dictionary, mp3 player, digital camera, cell phone, and vehicle GPS system) can be displaced by a tablet PC depending on users. The hazardous waste potential from heavy metals is examined with existing U.S. federal and California state regulations, and the resource depletion and toxicity potentials from heavy metals are evaluated based on life cycle impact assessments. The potentials of a specific tablet PC are compared to the total of those of displaced single products. Overall, the tablet PC has lower hazardous waste, resource depletion, and toxicity potentials from heavy metals. However, in case the tablet PC displaces only two or three single devices, it requires more gold, molybdenum, and vanadium. Therefore, technology convergence should take into account materials consumption and user behavior to develop more sustainable products.     

The social and ecological determinants of common pool resource sustainability

We study a dynamic common pool resource game in which current resource stock depends on resource extraction in the previous period. Our model shows that for a sufficiently high regrowth rate, there is no commons dilemma: the resource will be preserved indefinitely in equilibrium. Lower growth rates lead to depletion. Laboratory tests of the model indicate that favorable ecological characteristics are necessary but insufficient to encourage effective CPR governance. Before the game, we elicit individual willingness to follow a costly rule. Only the presence of enough rule-followers preserves the resource given favorable ecological conditions.     

Competing land uses and fossil fuel,and optimal energy conversion rates during the transition toward a green economy under a pollution stock constraint

We study the transition to a carbon-free economy in a model with a polluting non-renewable resource and a clean renewable resource. Transforming primary energy into ready-to-use energy services is costly and more efficient energy transformation rates are more costly to achieve. Renewable energy competes with food production for land and the food productivity of land can be improved at some cost. To avoid catastrophic climate damages, the pollution stock is mandated to stay below a given cap. When the economy is not constrained by the cap, the efficiency of energy transformation increases steadily until the transition toward the ultimate green economy; when renewable energy is exploited, its land use rises at the expense of food production; food productivity increases together with the land rent but food production drops; the food and energy prices increase and renewables substitute for non-renewable energy. During the constrained phase, the economy follows a constant path of prices, quantities, efficiency rates, food productivity and land rent, a phenomenon we call the ‘ceiling efficiency paradox’.     

绿色化学研究与生态环境保护

绿色化学是指利用一系列原理来降低或消除在化工产品的设计、生产及应用中有害物质的使用和产生的科学。它致力于从源头上制止污染物的生成。文章从非传统的绿色原材料、溶剂、试剂、催化剂、安全化学品及合成方法方面综述了绿色化学的研究进展。绿色化学从材料和能源的内在性质上面对生态环境问题的挑战，在分子水平上设计结构及其相关的性质，通过减少内在的危害而使生态系统的发展具有可持续性。发展绿色化学是实现生态环境保护的途径。     

Challenges for a sustainable resource use: Uncertainty,trade, and climate policies

We integrate new challenges to thinking about resource markets and sustainable resource use policies in a general framework. The challenges, emerging from six papers that JEEM publishes in a special issue, are (i) demand uncertainty and stockpiling, (ii) international trade and resource dependence, (iii) deforestation, and (iv) intertemporal effects of climate change policies (“Green Paradox”). We discuss new insights and results on these issues by fitting them into the Hotelling model of non-renewable resource depletion.     

Resource distributions and diet development by trial-and-error learning

We study interactions between resource distributions, grouping, and diet development in foragers who learn by trial-and-error. We do this by constructing an individual-based model where individuals move and forage in groups in a 2-D space with high resource diversity and learn what to eat. By comparing diet development in different resource distributions, and in gregarious and solitary individuals, we elucidate how these factors affect patterns of diet variation. Our results indicate that different resource distributions have profound effects on learning opportunities, and thereby lead to contrasting phenomena. In uniform environments, local resource depletion by gregarious individuals, in interaction with learning, leads to diet differentiation. In patchy environments, grouping leads to enhanced diet overlap within groups and leads to differences in diet between groups. Surprisingly, mixed environments can generate all these phenomena simultaneously. Our results predict relationships between diet variation, trial-and-error learning, and resource distributions. The phenomena we describe are not evolved strategies, but arise spontaneously when groups of individuals learn to forage in certain resource distributions. This suggests that describing diet specialization or diet homogenization as the result of behavioral strategies may not always be justified.     

Renewable resource management and extinction

Several authors have noted that extinction of a biological resource could be consistent with a policy of maximizing the discounted present value of economic rent. However, the arguments put forward in support of this assertion have hitherto been based on autonomous models. In this note we discuss the nonautonomous case, which turns out to be considerably more difficult to analyze.     

Challenges for a sustainable resource use: Uncertainty,trade, and climate policies

We integrate new challenges to thinking about resource markets and sustainable resource use policies in a general framework. The challenges, emerging from six papers that JEEM publishes in a special issue, are (i) demand uncertainty and stockpiling, (ii) international trade and resource dependence, (iii) deforestation, and (iv) intertemporal effects of climate change policies (“Green Paradox”). We discuss new insights and results on these issues by fitting them into the Hotelling model of non-renewable resource depletion.     

Attitudes towards risk and the optimal exploitation of an exhaustible resource

The exploitation of a nonrenewable natural resource, such as petroleum or mineral ores, is analyzed in a stochastic framework with price uncertainty. The market setting may be either monopolistic or competitive. We demonstrate that the rate of extraction varies directly with the resource owner's willingness to accept risk. Rish-preferring owners use the resource more rapidly than risk-neutral owners, who in turn deplete the resource more rapidly than risk-averse owners. It is also seen that the usual practice of increasing the discount rate to account for risk induces a more rapid rate of resource use, when in fact a slower rate of depletion is desired.     

Hartwick's rule and maximin paths when the exhaustible resource has an amenity value

This paper studies the maximin paths of the canonical Dasgupta–Heal–Solow model when the stock of natural capital is a direct argument of well-being, besides consumption. Hartwick's rule then appears as an efficient tool to characterize solutions in a variety of settings. We start with the case without technical progress. We obtain an explicit solution of the maximin problem in the case where production and utility are Cobb–Douglas. When the utility function is CES with a low elasticity of substitution between consumption and natural capital, we show that it is optimal to preserve forever a critical level of natural capital, determined endogeneously. We then study how technical progress affects the optimal maximin paths, in the Cobb–Douglas utility case. On the long run path of the economy capital, production and consumption grow at a common constant rate, while the resource stock decreases at a constant rate and is therefore completely depleted in the very long run. A higher amenity value of the resource stock leads to faster economic growth, but to a lower long run rate of depletion. We then develop a complete analysis of the dynamics of the maximin problem when the sole source of well-being is consumption, and provide a numerical resolution of the model with resource amenity. The economy consumes, produces and invests less in the short run if the resource has an amenity value than if it does not, whereas it is the contrary in the medium and long runs. However, and without surprise, the resource stock remains for ever higher with resource amenity than without.     

基于目标规划模型的大连市水资源承载力分析

结合“大大连”建设的规划和“十五”及2010年远景规划,选取了人口、国内生产总值、公共绿地面积三个决策变量建立目标规划模型,采取3种方案对大连市水资源承载力进行预测,通过对预测结果的分析并结合水资源承载力的特点提出增强水资源承载力的方案:以可持续发展的观点来设计城市发展规划;调整和改造产业结构;改变城市绿化结构;兴修水利,发展节水技术达到水资源可持续利用。     

Social network effects on the adoption of sustainable natural resource management practices in Ethiopia

Soil loss, nutrient depletion and land degradation contribute to the skimpy performance of smallholder agriculture and pose serious policy challenges in developing countries. Surprisingly, natural resource management practices that enhance sustainability while improving productivity have not been fully adopted despite continuous efforts of promotion. Using data collected from 2901 farm households in the Farmers Innovation Fund (FIF) of the World Bank, this study examines factors delaying adoption of resource management and farming practices from the perspective of social learning and network size. Specifically, the study aims at identifying the extent to which differences in network structure matter in providing opportunities to learn about new ways of sustainable resource management practices using regression analysis. The result confirms that social network size plays a significant role in enhancing adoption of natural resource management practices. Moreover, external sources of information such as extension provision play a crucial role in enhancing adoption of resource management practices. Thus, future endeavours should link extension services to informal networks to enhance adoption of sustainable natural resource management practices.     

Dissecting the tragedy: A spatial model of behavior in the commons

Much of the discussion of the tragedy of the commons focuses on aggregate impacts, often in data-poor developing country settings. Few non-experimental empirical studies shed light on contextual circumstances driving the extent of rent dissipation and overexploitation. We utilize a high-resolution data set to estimate a behavioral model of fishermen's spatial choices. A unique policy setting allows us to measure the degree to which individual fishermen's choices appear aimed at mitigating the tragedy of the commons in a small numbers setting. We find evidence of partial mitigation in excess of what we would expect under pure self-interest but short of what would occur under group-maximizing behavior. We also examine how contextual factors in the fishery shape the degree of cooperation within the fishing season and find evidence that competition for the common pool resource distorts fishermen's implicit cost of distance—creating a form of “common property inertia”.     

Modulation of predator-prey interactions by the Allee effect

An Allee effect arising from density-dependent mating success can have significant impacts at the ecosystem level when considered in the context of predator-prey interactions. These are captured by a mathematical model for the exchange of biomass between a structured predator population (continuous weight distribution) and a resource. Because the predator’s mating success affects the amount of resources required for the production of offsprings and their future growth into mature organisms, it influences the flux of biomass between trophic levels. Under simple assumptions, the equations can be reduced to an equivalent unstructured predator-prey model in which the Allee effect modulates the predation rate: the mating probability multiplies the rate of predator growth as well as the rate of resource depletion. Implications of the Allee effect for the bifurcation structure and equilibrium densities are examined. The model is compared to a modified version in which the Allee effect instead modulates the assimilation efficiency, hence the mating probability does not appear in the dynamical equation for the resource density. Both models exhibit qualitatively similar dynamics. However, compared to the model in which the Allee effect modulates predation, the model in which the Allee effect modulates assimilation efficiency predicts (i) unrealistically inefficient resource assimilation when predator density is low, (ii) a higher risk of catastrophic extinction resulting from a change in the parameter controlling the strength of the Allee effect, and (iii) no possibility of an increase in population size when the density dependence is enhanced.