When is it Optimal to Exhaust a Resource in a Finite Time?
Date
01.01.2006
01.01.2006
Authors
Y. Hossein Farzin, Ken-Ichi Akao
JEL Code
Q20
Q20
Keywords:
Renewable resource management,Sustainability,Finite-time exhaustion,Optimal path,Policy implications
Renewable resource management,Sustainability,Finite-time exhaustion,Optimal path,Policy implications
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
JOURNAL
Springer Japan
Springer Japan
Exhaustion of a natural resource stock may be a rational choice for an individual and/or a community, even if a sustainable use for the resource is feasible and the resource users are farsighted and well informed on the ecosystem. We identify conditions under which it is optimal not to sustain resource use. These conditions concern the discounting of future benefits, instability of social system or ecosystem, nonconvexity of natural growth function, socio-psychological value of employment, and strategic interaction among resource users. The identification of these conditions can help design policies to prevent unsustainable patterns of resource use.