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Sustainable Development, Renewable Resources and Technological Progress

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  • Simone Valente

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Abstract

Conflicts between optimality and sustainability are typical in the literature on sustainable development. Using the “capital-resource” growth model, Pezzey and Withagen (1998, Scandinavian Journal of Economics 100 (2), 513–527) have proved that if natural resources are exhaustible, the time-path of consumption is single-peaked, declining from some point in time onwards. This paper extends the model to include technical progress, resource renewability, extraction costs and population growth. The main result is that, for any constant returns to scale technology, optimal paths can be sustainable only if the social discount rate does not exceed the sum of the rates of resource regeneration and augmentation. The development of resource-saving techniques is crucial for sustaining consumption per capita in the long run, whereas capital depreciation and extraction costs are neutral with respect to this sustainability condition. Copyright Springer 2005

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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 30 (2005)
Issue (Month): 1 (January)
Pages: 115-125

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Handle: RePEc:kap:enreec:v:30:y:2005:i:1:p:115-125

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: optimal growth; renewable resources; sustainable development; technological progress;

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References

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  1. R. M. Solow, 1973. "Intergenerational Equity and Exhaustable Resources," Working papers 103, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Heal, G., 1990. "The Optimal Use Of Exhaustible Resources," Papers fb-_90-10, Columbia - Graduate School of Business.
  3. Chichilnisky, Graciela & Beltratti, Andrea & Heal, Geoffrey, 1998. "Sustainable use of renewable resources, Chapter 2.1," MPRA Paper 8815, University Library of Munich, Germany.
  4. Jeffrey A. Krautkraemer & JRaymond G. Batina, 1999. "On Sustainability and Intergenerational Transfers with a Renewable Resource," Land Economics, University of Wisconsin Press, vol. 75(2), pages 167-184.
  5. Mourmouras, Alex, 1993. "Conservationist government policies and intergenerational equity in an overlapping generations model with renewable resources," Journal of Public Economics, Elsevier, vol. 51(2), pages 249-268, June.
  6. Heal, G.M., 1995. "Interpreting Sustainability," Papers 95-24, Columbia - Graduate School of Business.
  7. Pezzey, John C V & Withagen, Cees A, 1998. " The Rise, Fall and Sustainability of Capital-Resource Economies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(2), pages 513-27, June.
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Citations

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Cited by:
  1. Endress, Lee H. & Pongkijvorasin, Sittidaj & Roumasset, James & Wada, Christopher A., 2014. "Intergenerational equity with individual impatience in a model of optimal and sustainable growth," Resource and Energy Economics, Elsevier, vol. 36(2), pages 620-635.
  2. Di Maria, Corrado & Valente, Simone, 2006. "The Direction of Technical Change in Capital-Resource Economies," MPRA Paper 1040, University Library of Munich, Germany.
  3. Ulla Lehmijoki, 2004. "On the Beach? Sustainability, Optimal Pollution, and Optimal Population," DEGIT Conference Papers c009_039, DEGIT, Dynamics, Economic Growth, and International Trade.
  4. Eugenia Vella & Evangelos Dioikitopoulos & Sarantis Kalyvitis, . "Green Spending Reforms, Growth and Welfare with Endogenous Subjective Discounting," DEOS Working Papers 1335, Athens University of Economics and Business.
  5. Valente, Simone, 2008. "Intergenerational transfers, lifetime welfare, and resource preservation," Environment and Development Economics, Cambridge University Press, vol. 13(01), pages 53-78, February.
  6. R. Yamaguchi & K. Ueta, 2011. "Capital depreciation and waste accumulation in capital-resource economies," Applied Economics Letters, Taylor & Francis Journals, vol. 18(6), pages 519-522.
  7. Simone Valente, 2005. "Genuine Dissaving and Optimal Growth," Others 0505009, EconWPA.
  8. Lee H. Endress & Sittidaj Pongkijvorasin & James Roumasset & Christopher Wada, 2013. "Intergenerational Equity with Individual Impatience in an OLG Model of Optimal and Sustainable Growth," Working Papers 2013-9, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
  9. Eppink, Florian V. & van den Bergh, Jeroen C.J.M., 2007. "Ecological theories and indicators in economic models of biodiversity loss and conservation: A critical review," Ecological Economics, Elsevier, vol. 61(2-3), pages 284-293, March.

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