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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References listed on IDEAS
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- Pagiola, Stefano, 2006.
"Payments for Environmental Services in Costa Rica,"
2010, University Library of Munich, Germany.
- Brian R. Copeland & M. Scott Taylor, 2009.
"Trade, Tragedy, and the Commons,"
American Economic Review,
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- 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.
- Oses-Eraso, Nuria & Viladrich-Grau, Montserrat, 2007. "On the sustainability of common property resources," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 393-410, May.
- Sethi, Rajiv & Somanathan, E, 1996. "The Evolution of Social Norms in Common Property Resource Use," American Economic Review, American Economic Association, vol. 86(4), pages 766-88, September.
- 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.
- 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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