IDEAS home Printed from https://ideas.repec.org/a/eee/recore/v61y2012icp103-108.html
   My bibliography  Save this article

An economic model of long-term phosphorus extraction and recycling

Author

Listed:
  • Seyhan, Demet
  • Weikard, Hans-Peter
  • van Ierland, Ekko

Abstract

Phosphorus (P) is a macronutrient necessary for life. In the form of phosphates it presents a mineral resource that we depend on, having no substitute for its fertilizer use. These limited reserves of P are depleting globally, and maintaining or improving food security will require careful long-term use of the resource. We study here the extraction and recycling of P with an optimal control framework, and develop a resource-specific model. We determine time-paths for extraction and recycling when both technological progress and a geological stock effect drive the supply of P. Demand is described by a hyperbolic function with a strictly positive lower bound reflecting the key properties of the resource, its non-substitutability and its essentiality. We obtain three insights: (i) Although essential and non-substitutable, P resources will be depleted due to a strict minimum consumption level. Recycling could postpone depletion costs and maintain a minimum consumption forever but at rising marginal costs. (ii) Although extraction depletes the resource and increases its scarcity over time, we observe that on an optimal path the price can fall, which will increase extraction. This underlines that market prices cannot serve as reliable scarcity indicator and fail to support resource augmenting technologies. (iii) If the shadow price is used as scarcity indicator, it would provide incentives for recycling even under declining primary resource prices.

Suggested Citation

  • Seyhan, Demet & Weikard, Hans-Peter & van Ierland, Ekko, 2012. "An economic model of long-term phosphorus extraction and recycling," Resources, Conservation & Recycling, Elsevier, vol. 61(C), pages 103-108.
    • Handle: RePEc:eee:recore:v:61:y:2012:i:c:p:103-108
    DOI: 10.1016/j.resconrec.2011.12.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921344911002527
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resconrec.2011.12.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Robert U. Ayres & Benjamin Warr, 2009. "The Economic Growth Engine," Books, Edward Elgar Publishing, number 13324.
    2. Robert Bradley, 2007. "Resourceship: An Austrian theory of mineral resources," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 20(1), pages 63-90, March.
    3. Slade, Margaret E., 1982. "Trends in natural-resource commodity prices: An analysis of the time domain," Journal of Environmental Economics and Management, Elsevier, vol. 9(2), pages 122-137, June.
    4. John Hartwick, 1977. "Intergenerational Equity and the Investment of Rents from Exhaustible Resources in a Two Sector Model," Working Paper 281, Economics Department, Queen's University.
    5. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    6. Weikard, Hans-Peter & Seyhan, Demet, 2009. "Distribution of phosphorus resources between rich and poor countries: The effect of recycling," Ecological Economics, Elsevier, vol. 68(6), pages 1749-1755, April.
    7. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 29-45.
    8. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    9. Farzin, Y H, 1992. "The Time Path of Scarcity Rent in the Theory of Exhaustible Resources," Economic Journal, Royal Economic Society, vol. 102(413), pages 813-830, July.
    10. Partha Dasgupta & Geoffrey Heal, 1974. "The Optimal Depletion of Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 3-28.
    11. Schulze, William D., 1974. "The optimal use of non-renewable resources: The theory of extraction," Journal of Environmental Economics and Management, Elsevier, vol. 1(1), pages 53-73, May.
    12. Milton C. Weinstein & Richard J. Zeckhauser, 1974. "Use Patterns for Depletable and Recycleable Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 67-88.
    13. A. Marvasti, 2000. "Resource Characteristics, Extraction Costs, and Optimal Exploitation of Mineral Resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(4), pages 395-408, December.
    14. Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ba, Bocar Samba & Combes-Motel, Pascale & Schwartz, Sonia, 2020. "Challenging pollution and the balance problem from rare earth extraction: how recycling and environmental taxation matter," Environment and Development Economics, Cambridge University Press, vol. 25(6), pages 634-656, December.
    2. Kleemann, Rosanna & Chenoweth, Jonathan & Clift, Roland & Morse, Stephen & Pearce, Pete & Saroj, Devendra, 2015. "Evaluation of local and national effects of recovering phosphorus at wastewater treatment plants: Lessons learned from the UK," Resources, Conservation & Recycling, Elsevier, vol. 105(PB), pages 347-359.
    3. Reijnders, L., 2014. "Phosphorus resources, their depletion and conservation, a review," Resources, Conservation & Recycling, Elsevier, vol. 93(C), pages 32-49.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hart, Rob, 2016. "Non-renewable resources in the long run," Journal of Economic Dynamics and Control, Elsevier, vol. 71(C), pages 1-20.
    2. Smith, James L., 2012. "On the portents of peak oil (and other indicators of resource scarcity)," Energy Policy, Elsevier, vol. 44(C), pages 68-78.
    3. Martinet, Vincent, 2007. "A step beside the maximin path: Can we sustain the economy by following Hartwick's investment rule?," Ecological Economics, Elsevier, vol. 64(1), pages 103-108, October.
    4. Vincent Martinet, 2007. "Maximizing minimal rights for sustainability: a viability approach," Working Papers hal-04139217, HAL.
    5. Dzhumashev, Ratbek, 2024. "The role of physical constraints on production," Ecological Economics, Elsevier, vol. 216(C).
    6. Hart, Rob, 2012. "The economics of natural resources: Understanding and predicting the evolution of supply and demand," Working Paper Series 2012:01, Swedish University of Agricultural Sciences, Department Economics.
    7. Jeffrey A. Krautkraemer, 1998. "Nonrenewable Resource Scarcity," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 2065-2107, December.
    8. Daniele Schilirò, 2019. "Sustainability, Innovation, and Efficiency: A Key Relationship," Palgrave Studies in Impact Finance, in: Magdalena Ziolo & Bruno S. Sergi (ed.), Financing Sustainable Development, chapter 0, pages 83-102, Palgrave Macmillan.
    9. Alexander S. Skorobogatov, 2014. "An Ongoing Reversal Of Fortune Among Russian Cities: City Age, Natural Resources, And Changing Spatial Income Distribution," HSE Working papers WP BRP 60/EC/2014, National Research University Higher School of Economics.
    10. Beatrix Gaitan & Terry Roe, 2012. "International Trade, Exhaustible-Resource Abundance and Economic Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(1), pages 72-93, January.
    11. Spiro, Daniel, 2014. "Resource prices and planning horizons," Journal of Economic Dynamics and Control, Elsevier, vol. 48(C), pages 159-175.
    12. Hou, Zheng & Roseta-Palma, Catarina & Ramalho, Joaquim José dos Santos, 2021. "Does directed technological change favor energy? Firm-level evidence from Portugal," Energy Economics, Elsevier, vol. 98(C).
    13. Bazhanov, Andrei V., 2022. "Extraction path and sustainability," Resources Policy, Elsevier, vol. 76(C).
    14. Brock, William A. & Taylor, M. Scott, 2005. "Economic Growth and the Environment: A Review of Theory and Empirics," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 28, pages 1749-1821, Elsevier.
    15. Di Vita, Giuseppe, 2006. "Natural resources dynamics: Exhaustible and renewable resources, and the rate of technical substitution," Resources Policy, Elsevier, vol. 31(3), pages 172-182, September.
    16. Cynthia Lin, C.-Y. & Wagner, Gernot, 2007. "Steady-state growth in a Hotelling model of resource extraction," Journal of Environmental Economics and Management, Elsevier, vol. 54(1), pages 68-83, July.
    17. Tobias Kronenberg, 2008. "Should We Worry About The Failure Of The Hotelling Rule?," Journal of Economic Surveys, Wiley Blackwell, vol. 22(4), pages 774-793, September.
    18. Kollenbach, Gilbert, 2015. "Abatement, R&D and growth with a pollution ceiling," Journal of Economic Dynamics and Control, Elsevier, vol. 54(C), pages 1-16.
    19. Toman, Michael & Pezzey, John C., 2002. "The Economics of Sustainability: A Review of Journal Articles," RFF Working Paper Series dp-02-03, Resources for the Future.
    20. Schläpfer, F. & Mann, S., 2013. "Eine erweiterte Gesamtrechnung der multifunktionalen Schweizer Landwirtschaft," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.

    Corrections

    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:eee:recore:v:61:y:2012:i:c:p:103-108. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kai Meng (email available below). General contact details of provider: https://www.journals.elsevier.com/resources-conservation-and-recycling .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.