IDEAS home Printed from
   My bibliography  Save this paper

Nonrenewable Resources Extractions With a Pollution Side Effect: A Comparative Dynamic Analysis


  • Kenneth Lyon
  • Dug Lee


In this paper, we present a nonrenewable resource model including environmental pollution as a state variable. The model is analyzed to identify some of the characteristics of the optimal paths. In addition, we present a numerical example on the basis of the algebraic solutions of our qualitative model, and identify some of the characteristics of the optimal time paths for two sets of social costs of the pollutant. These results are consistent with the proposition of the previous literature that levying the shadow cost of the pollution stock reduces the consumption of resource; hence, it slows the accumulation of the pollutant in the atmosphere. One quirk in the results, however, is that extractions will persist longer in the higher pollution cost scenario. The costate variable for the resource stock is decomposed into a scarcity effect and a cost effect and the costate variable for the pollution stock is decomposed into an undesirable abundance effect and a cost effect. Both of these, however, are cost effects.

Suggested Citation

  • Kenneth Lyon & Dug Lee, 2002. "Nonrenewable Resources Extractions With a Pollution Side Effect: A Comparative Dynamic Analysis," Working Papers 2002-19, Utah State University, Department of Economics.
  • Handle: RePEc:usu:wpaper:2002-19

    Download full text from publisher

    File URL:
    File Function: First version, 2002
    Download Restriction: no

    More about this item


    nonrenewable resource; environmental pollution stock; scarcity effect; undesirable abundance effect; cost effect;

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:usu:wpaper:2002-19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John Gilbert). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.