Trade with polluting nonrenewable resources
- Oulu Univ. (Finland)
A major part of accumulating pollution, such as acidification or atmospheric carbon dioxide, orginates from nonrenewable resources. Uses of fossil fuels must take the long-term pollution damage into account; at the same time owners of nonrenewable resource face the problem of maximizing the resource rent. The implications on the global market are very complex, raising questions about the international incidence effects of a carbon dioxide tax and about who receives the revenues, especially if fossil fuels are supplied by resource cartels like OPEC. This paper considers an extended version of the problem in which pollution decays and extraction costs depend on the resource stock level. Buyers and sellers optimization problems are introduced in section 2. Section 3 solves the simplified version of the model. A generalized version of the model is analyzed in section 4, and section 5 summarizes the main results.
- OSTI ID:
- 379400
- Journal Information:
- Journal of Environmental Economics and Management, Vol. 30, Issue 1; Other Information: PBD: Jan 1996
- Country of Publication:
- United States
- Language:
- English
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