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Lobbying over Exhaustible-Resource Extraction

Author

Listed:
  • Achim Voss

    () (University of Hamburg)

  • Mark Schopf

    () (University of Paderborn)

Abstract

Consider a lobby group of exhaustible-resource suppliers, which bargains with the government over the extraction of an exhaustible resource and over contribution payments. We characterize the equilibrium extraction path and the development of contribution payments in time. The latter relates to the development of the conflict of interest between profit-maximization and welfare-maximization. Due to stock pollution damages, the government prefers a lower level of cumulative extraction than the lobby group in the long run. In the meantime, the resource suppliers’ aim to maximize profits implies that equilibrium extraction may be too slow to maximize welfare, while flow-pollution damages imply that it may be too fast.

Suggested Citation

  • Achim Voss & Mark Schopf, 2016. "Lobbying over Exhaustible-Resource Extraction," Working Papers Dissertations 26, Paderborn University, Faculty of Business Administration and Economics.
  • Handle: RePEc:pdn:dispap:26
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    File URL: http://groups.uni-paderborn.de/wp-wiwi/RePEc/pdf/dispap/DP26.pdf
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    References listed on IDEAS

    as
    1. Rubio, Santiago J. & Escriche, Luisa, 2001. "Strategic pigouvian taxation, stock externalities and polluting non-renewable resources," Journal of Public Economics, Elsevier, vol. 79(2), pages 297-313, February.
    2. Fischer, Carolyn & Laxminarayan, Ramanan, 2005. "Sequential development and exploitation of an exhaustible resource: do monopoly rights promote conservation?," Journal of Environmental Economics and Management, Elsevier, vol. 49(3), pages 500-515, May.
    3. John Boyce, 2010. "Putting Foxes in Charge of the Hen-House: The Political Economy of Harvest Quota Regulations," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 475-493, August.
    4. Schopf, Mark & Voss, Achim, 2019. "Bargaining over natural resources: Governments between environmental organizations and extraction firms," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 208-240.
    5. Keutiben, Octave, 2014. "On capturing foreign oil rents," Resource and Energy Economics, Elsevier, vol. 36(2), pages 542-555.
    6. Julien Daubanes, 2008. "Fossil fuels supplied by oligopolies: On optimal taxation and rent capture," Economics Bulletin, AccessEcon, vol. 17(13), pages 1-11.
    7. Salant, Stephen & Eswaran, Mukesh & Lewis, Tracy, 1983. "The length of optimal extraction programs when depletion affects extraction costs," Journal of Economic Theory, Elsevier, vol. 31(2), pages 364-374, December.
    8. Achim Voss & Mark Schopf, 2016. "Special Interest Politics: Contribution Schedules versus Nash Bargaining," Working Papers Dissertations 27, Paderborn University, Faculty of Business Administration and Economics.
    9. Wirl Franz, 1994. "Pigouvian Taxation of Energy for Flow and Stock Externalities and Strategic, Noncompetitive Energy Pricing," Journal of Environmental Economics and Management, Elsevier, vol. 26(1), pages 1-18, January.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Schopf, Mark & Voss, Achim, 2019. "Bargaining over natural resources: Governments between environmental organizations and extraction firms," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 208-240.
    2. Achim Voss & Mark Schopf, 2014. "Lobbying over Exhaustible-Resource Extraction," Working Papers CIE 80, Paderborn University, CIE Center for International Economics.

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    More about this item

    Keywords

    Environmental Policy; Exhaustible Resources; Political Economy; Lobbying; Nash Bargaining; Dynamic Programming;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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