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Harvesting in an integrated general equilibrium model

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  • Thomas Eichner
  • Rüdiger Pethig

Abstract

Harvesting of prey biomass is analyzed in an integrated ecological-economic system whose submodels, a predator–prey ecosystem and a simple economy, are microfounded dynamic general equilibrium models. These submodels are interdependent because the ecosystem responds to harvesting—through the reactions of optimizing individual organisms—by changing the provision of public ecosystem services to consumers. General analytical results are derived regarding the impact of harvesting policies on short-run equilibria of both submodels, on population dynamics, and on stationary states of the integrated model. A key insight is that prey biomass carries a positive ecosystem price which needs to be added as a tax mark-up to the economic price of harvested biomass to attain allocative efficiency. Further information on the dynamics is gained by resorting to numerical analysis of the policy regimes of zero harvesting, laissez-faire harvesting and efficient harvesting. It “... is a matter of weighing costs and benefits of taking action, whether the action is the “inert” one of leaving resources alone in order to conserve them, or whether it involves exploiting a resource ... for so-called material ends”. Pearce (1976, p. 320) Copyright Springer Science+Business Media, Inc. 2007

Suggested Citation

  • Thomas Eichner & Rüdiger Pethig, 2007. "Harvesting in an integrated general equilibrium model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 233-252, May.
    • Handle: RePEc:kap:enreec:v:37:y:2007:i:1:p:233-252
    DOI: 10.1007/s10640-007-9122-7
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    1. Eichner, Thomas & Pethig, Rüdiger, 2009. "Pricing the ecosystem and taxing ecosystem services: A general equilibrium approach," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1589-1616, July.
    2. Hoekstra, Jeljer & van den Bergh, Jeroen C.J.M., 2005. "Harvesting and conservation in a predator-prey system," Journal of Economic Dynamics and Control, Elsevier, vol. 29(6), pages 1097-1120, June.
    3. Thomas Eichner & Rüdiger Pethig, 2006. "An Analytical Foundation of the Ratio-Dependent Predator-Prey Model," Journal of Bioeconomics, Springer, vol. 8(2), pages 121-132, August.
    4. Deaton, Angus, 1981. "Optimal Taxes and the Structure of Preferences," Econometrica, Econometric Society, vol. 49(5), pages 1245-1260, September.
    5. Thomas Christiaans & Thomas Eichner & Rüdiger Pethig, 2005. "A Micro-Level 'Consumer Approach' to Species Population Dynamics," CESifo Working Paper Series 1530, CESifo.
    6. Thomas Eichner & Rüdiger Pethig, 2003. "The impact of scarcity and abundance in food chains on species population dynamics," Volkswirtschaftliche Diskussionsbeiträge 109-03, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    7. Thomas Eichner & Rüdiger Pethig, 2003. "A Microfoundation of Predator-Prey Dynamics," Volkswirtschaftliche Diskussionsbeiträge 110-03, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    8. Wolfgang Ströbele & Holger Wacker, 1995. "The economics of harvesting predator-prey systems," Journal of Economics, Springer, vol. 61(1), pages 65-81, February.
    9. David Finnoff & John Tschirhart, 2003. "Protecting an Endangered Species While Harvesting Its Prey in a General Equilibrium Ecosystem Model," Land Economics, University of Wisconsin Press, vol. 79(2), pages 160-180.
    10. Thomas Crocker & John Tschirhart, 1992. "Ecosystems, externalities, and economies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(6), pages 551-567, November.
    11. Finnoff, David & Tschirhart, John, 2003. "Harvesting in an eight-species ecosystem," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 589-611, May.
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    1. Carvalho, Natacha & Rege, Sameer & Fortuna, Mário & Isidro, Eduardo & Edwards-Jones, Gareth, 2011. "Estimating the impacts of eliminating fisheries subsidies on the small island economy of the Azores," Ecological Economics, Elsevier, vol. 70(10), pages 1822-1830, August.
    2. Ian Bateman & Edward Barbier & Scott Barrett, 2007. "Introduction to the special issue in honour of David W. Pearce: environmental economics and policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 1-6, May.
    3. Mardones D., Cristián, 2012. "Chile: building a computable general equilibrium model with an application to the Bío Bío region," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    4. Hussain, A.M. Tanvir & Tschirhart, John, 2013. "Economic/ecological tradeoffs among ecosystem services and biodiversity conservation," Ecological Economics, Elsevier, vol. 93(C), pages 116-127.
    5. Giles Atkinson & Kirk Hamilton, 2007. "Progress along the path: evolving issues in the measurement of genuine saving," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 43-61, May.
    6. Frank Convery, 2007. "Making a difference — how environmental economists can influence the policy process — a case study of David W Pearce," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 7-32, May.
    7. Negar Akbari & Pierre Failler & Haoran Pan & Benjamin Drakeford & Andy Forse, 2023. "The Impact of Fisheries on the Economy: A Systematic Review on the Application of General Equilibrium and Input–Output Methods," Sustainability, MDPI, vol. 15(7), pages 1-17, March.
    8. Haoran Pan & Pierre Failler & Qianyi Du & Christos Floros & Loretta Malvarosa & Emmanuel Chassot & Vincenzo Placenti, 2022. "An Inter-Temporal Computable General Equilibrium Model for Fisheries," Sustainability, MDPI, vol. 14(11), pages 1-23, May.
    9. Jean-Philippe Barde, 2007. "Harnessing the political economy of environmental policy: David Pearce’s contribution to OECD," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 33-42, May.

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    More about this item

    Keywords

    Predator; Prey; Biomass price; Harvesting; Q20; Q57;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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