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Renewable resources and the gains from trade

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  • Rögnvaldur Hannesson

Abstract

The Brander‐Taylor small, open‐economy model of trade in a renewable resource and other goods is modified to allow for diminishing returns in the other goods sector. It is shown that opening up for trade may result in steady‐state gains from trade, even when there is open access to the resource and the country does not specialize fully in resource extraction. It is also shown that transition to optimal management, with price‐taking behaviour, may result in a welfare loss. Resources renouvelables et gains en provenance du commerce international. L'auteur modifie le modèle Brander‐Taylor de commerce international d'une ressource renouvelable et d'autres biens dans le cas d'une petite économie ouverte afin de tenir compte des rendements décroissants dans le secteur des autres biens. On montre que I'ouverture au commerce international peut entraîner des gains en provenance de l'échange international en régime permanent, et ce même quand l'accès à la ressource est ouvert et que le pays ne se spécialise pas dans l'extraction de la ressource. On montre que dans la période de transition vers un management optimal, quand il y a ajustement aux prix de marché, il peut y avoir perte de bien‐être.

Suggested Citation

  • Rögnvaldur Hannesson, 2000. "Renewable resources and the gains from trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 33(1), pages 122-132, February.
    • Handle: RePEc:wly:canjec:v:33:y:2000:i:1:p:122-132
    DOI: 10.1111/0008-4085.00008
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    Cited by:

    1. Abman,Ryan Michael & Lundberg,Clark Christopher & Ruta,Michele, 2021. "The Effectiveness of Environmental Provisions in Regional Trade Agreements," Policy Research Working Paper Series 9601, The World Bank.
    2. Andreas Freytag & Christoph Vietze, 2013. "Can nature promote development? The role of sustainable tourism for economic growth," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 2(1), pages 16-44, March.
    3. Edwards, Eric C. & Go, Dong-Hun & Oladi, Reza, 2020. "Predator–prey dynamics in general equilibrium and the role of trade," Resource and Energy Economics, Elsevier, vol. 61(C).
    4. Benchekroun, Hassan & Ray Chaudhuri, Amrita & Tasneem, Dina, 2020. "On the impact of trade in a common property renewable resource oligopoly," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    5. Quaas, Martin F. & Stöven, Max T., 2014. "New trade in renewable resources and consumer preferences for diversity," Economics Working Papers 2014-08, Christian-Albrechts-University of Kiel, Department of Economics.
    6. Nielsen, Max, 2006. "Trade liberalisation, resource sustainability and welfare: The case of East Baltic cod," Ecological Economics, Elsevier, vol. 58(3), pages 650-664, June.
    7. Sabau, Gabriela & Boksh, F.I.M. Muktadir, 2017. "Fish Trade Liberalization Under 21st Century Trade Agreements: The CETA and Newfoundland and Labrador Fish and Seafood Industry," Ecological Economics, Elsevier, vol. 141(C), pages 222-233.
    8. Horatiu A. Rus, 2016. "Renewable Resources, Pollution and Trade," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 364-391, May.
    9. Zhang Wei-Bin, 2011. "Renewable Resources, Capital Accumulation, and Economic Growth," Business Systems Research, Sciendo, vol. 2(1), pages 24-35, January.
    10. Wei-Bin Zhang, 2015. "Oscillations in a Growth Model with Endogenous Wealth, Resource, Housing, and Elastic Labour Supply," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(9), pages 458-472, September.
    11. Zhang Wei-Bin, 2011. "Economic Growth And Dynamics Of Renewable Resource With Housing, Agricultural And Resource Land Use," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 6(2), pages 151-174, August.
    12. Horatiu A. Rus, 2006. "Renewable Resources, Pollution and Trade in a Small Open Economy," Working Papers 2006.140, Fondazione Eni Enrico Mattei.
    13. Eisenbarth, Sabrina, 2022. "Do exports of renewable resources lead to resource depletion? Evidence from fisheries," Journal of Environmental Economics and Management, Elsevier, vol. 112(C).
    14. ZHANG Wei-Bin, 2015. "Values Of Land And Renewable Resources In A Three-Sector Economic Growth Model," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 10(1), pages 156-186, April.
    15. Wei-Bin Zhang, 2017. "Growth with Endogenous Capital, Knowledge, and Renewable Resources," Romanian Statistical Review, Romanian Statistical Review, vol. 65(1), pages 19-37, March.
    16. Naoto Jinji, 2006. "International trade and terrestrial open-access renewable resources in a small open economy," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 790-808, August.
    17. Erwin H. Bulte & Richard Damania, 2005. "A note on trade liberalization and common pool resources," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(3), pages 883-899, August.
    18. Wei-Bin ZHANG, 2014. "Human Capital, Wealth, and Renewable Resources," Expert Journal of Economics, Sprint Investify, vol. 2(1), pages 1-20.
    19. Asche, Frank & Smith, Martin D., 2010. "Trade and fisheries: Key issues for the World Trade Organization," WTO Staff Working Papers ERSD-2010-03, World Trade Organization (WTO), Economic Research and Statistics Division.
    20. Gars, Johan & Spiro, Daniel, 2014. "Uninsurance through Trade," Memorandum 13/2014, Oslo University, Department of Economics.
    21. Abman, Ryan & Lundberg, Clark & Szmurlo, Daniel, 2022. "Trade, Emissions, and Environmental Spillovers: Issue Linkages in Regional Trade Agreements," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322511, Agricultural and Applied Economics Association.
    22. Bergeron, Nancy, 2002. "International Trade and Conservation with Costly Natural Resource Management," Cahiers de recherche 0204, GREEN.

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