Incentives to give up resource extraction and avoid the tragedy of the commons
This 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.
|Date of creation:||2013|
|Date of revision:|
|Publication status:||Published in|
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- Pagiola, Stefano, 2008.
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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.
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- Wunder, Sven & Engel, Stefanie & Pagiola, Stefano, 2008. "Taking stock: A comparative analysis of payments for environmental services programs in developed and developing countries," Ecological Economics, Elsevier, vol. 65(4), pages 834-852, May.
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