Unitization of Spatially Connected Renewable Resources
AbstractSpatial connectivity of renewable resources induces a spatial externality in extraction. We explore the consequences of decentralized spatial property rights in the presence of spatial externalities. We generalize the notion of unitization—developed to enhance cooperative extraction of oil and gas fields—and apply it to renewable resources which face a similar spatial commons problem. We find that unitizing a common pool renewable resource can yield first-best outcomes even when participation is voluntary, provided profit sharing rules can vary by participant.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 11 (2011)
Issue (Month): 1 (March)
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Web page: http://www.degruyter.com
Other versions of this item:
- Daniel T. Kaffine & Christopher J. Costello, 2010. "Unitization of spatially connected renewable resources," NBER Working Papers 16338, National Bureau of Economic Research, Inc.
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
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