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Sustainable Development: Renewable Resources and Technological Progress

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  • Simone Valente

    (Institute of Economic Research, ETH Zurich)

Abstract

Conflicts between optimality and sustainability are typical in the literature on sustainable development. Using the 'capital-resource' growth model, Pezzey and Withagen (1998) 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.

Suggested Citation

  • Simone Valente, 2004. "Sustainable Development: Renewable Resources and Technological Progress," CEIS Research Paper 54, Tor Vergata University, CEIS.
    • Handle: RePEc:rtv:ceisrp:54
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    References listed on IDEAS

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    Cited by:

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    2. Voosholz, Frauke, 2014. "The influence of different production functions on modeling resource extraction and economic growth," CAWM Discussion Papers 72, University of Münster, Münster Center for Economic Policy (MEP).
    3. Vella, Eugenia & Dioikitopoulos, Evangelos V. & Kalyvitis, Sarantis, 2015. "Green Spending Reforms, Growth, And Welfare With Endogenous Subjective Discounting," Macroeconomic Dynamics, Cambridge University Press, vol. 19(6), pages 1240-1260, September.
    4. Simone Valente, 2005. "Genuine dissaving and optimal growth," CER-ETH Economics working paper series 05/38, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    5. 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.
    6. Xiaojie Chen & Attila Szolnoki, 2018. "Punishment and inspection for governing the commons in a feedback-evolving game," PLOS Computational Biology, Public Library of Science, vol. 14(7), pages 1-15, July.
    7. Di Maria, Corrado & Valente, Simone, 2006. "The Direction of Technical Change in Capital-Resource Economies," MPRA Paper 1040, University Library of Munich, Germany.
    8. Valente, Simone, 2008. "Intergenerational transfers, lifetime welfare, and resource preservation," Environment and Development Economics, Cambridge University Press, vol. 13(1), pages 53-78, February.
    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.
    10. Di Maria, C., 2006. "Choosing the direction : Investment, the environment and economic development," Other publications TiSEM 81c9b8de-42c0-4938-8b82-c, Tilburg University, School of Economics and Management.
    11. 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.
    12. Shubbak, Mahmood H., 2019. "The technological system of production and innovation: The case of photovoltaic technology in China," Research Policy, Elsevier, vol. 48(4), pages 993-1015.
    13. 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.
    14. Burcu Afyonoglu Fazlioglu & Agustin Pérez-Barahona & Cagri Saglam, 2014. "The dynamic implications of energy-intensive capital accumulation," Working Papers hal-01074201, HAL.
    15. Sergey M. Aseev, 2023. "Necessary Conditions for the Optimality and Sustainability of Solutions in Infinite-Horizon Optimal Control Problems," Mathematics, MDPI, vol. 11(18), pages 1-15, September.
    16. Valente, Simone, 2011. "Endogenous Growth, Backstop Technology Adoption, And Optimal Jumps," Macroeconomic Dynamics, Cambridge University Press, vol. 15(3), pages 293-325, June.
    17. Kozera, Agnieszka & Satoła, Łukasz & Standar, Aldona & Dworakowska-Raj, Małgorzata, 2022. "Regional diversity of low-carbon investment support from EU funds in the 2014–2020 financial perspective based on the example of Polish municipalities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    18. Imre Dobos & Peter Tallos, 2013. "A dynamic input-output model with renewable resources," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(2), pages 295-305, March.
    19. Ulla Lehmijoki, 2004. "On the Beach? Sustainability, Optimal Pollution, and Optimal Population," DEGIT Conference Papers c009_039, DEGIT, Dynamics, Economic Growth, and International Trade.
    20. Dingbang, Cang & Cang, Chen & Qing, Chen & Lili, Sui & Caiyun, Cui, 2021. "Does new energy consumption conducive to controlling fossil energy consumption and carbon emissions?-Evidence from China," Resources Policy, Elsevier, vol. 74(C).

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    More about this item

    Keywords

    Optimal Growth; Renewable Resources; Sustainable Development; Technological Progress;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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