Optimal management of renewable resources with growing demand and stock externalities
The optimal regulation of or management of renewable resources cannot be meaningfully reduced to a simple rule. Neither choosing the optimal long-run renewable resource stock nor attaining the planned goal is easy. Simply equating a rate of growth to a rate of time preference - as if determining the rate of time preference were simple - will not work if there is anticipated growth in demand or a significant externality attached to the resource stock. Failure to account for demand growth or an externality both result in too low a plan for the resource stock. In the case of an externality, a regulatory agency might find the traditional tax tool for correction of an externality to be very difficult to handle. Taxing the product - the easiest tax to levy - has an effect on stock that is critically mediated by the slope of the unit cost curve. If the curve is flat, the tax has little effect on ultimate stock. Regulation of production techniques will be inefficient, while stock subsidies are hard to administer because of the difficulty in measuring stock and the requirement for a dispersion of public monies. 18 references, 3 figures.
- Research Organization:
- Univ. of California, Berkeley, CA (United States)
- OSTI ID:
- 6203463
- Journal Information:
- J. Environ. Econ. Manage.; (United States), Vol. 8:2
- Country of Publication:
- United States
- Language:
- English
Similar Records
Balancing Cost and Risk: The Treatment of Renewable Energy inWestern Utility Resource Plans
Environmental externalities: Thinking globally, taxing locally