Incentives to give up resource extraction and avoid the tragedy of the commons
AbstractThis paper develops a general model of common resource extraction where we introduce payments for environmental services to encourage resource users to give up extraction. The goal is to reach a balance between resource use and conservation. As the essence of conservation is dynamic, we use a dynamic model to study the implementation of the compensation scheme. A stable heterogeneous equilibrium can be reached where both extractors and non-extractors live together. We analyze how the success of the compensation depends on factors such as the elasticity of demand and the biological characteristics of the resource.
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Bibliographic InfoPaper provided by Departamento de Economía - Universidad Pública de Navarra in its series Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra with number 1305.
Date of creation: 2013
Date of revision:
Publication status: Published in
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Find related papers by JEL classification:
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
- Q29 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Other
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
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- Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
- Brian R. Copeland & M. Scott Taylor, 2009.
"Trade, Tragedy, and the Commons,"
American Economic Review,
American Economic Association, vol. 99(3), pages 725-49, June.
- M. Scott Taylor, 2009. "Innis Lecture: Environmental crises: past, present, and future," Canadian Journal of Economics, Canadian Economics Association, vol. 42(4), pages 1240-1275, November.
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