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Golden Rules For Sustainable Resource Management

Author

Listed:
  • Lee Endress
  • James A. Roumasset

    (Department of Economics, University of Hawaii at Manoa)

Abstract

This paper presents a simple model of resource management that combines use of a nonrenewable resource, such as oil, with eventual transition to a backstop substitute resource in infinite supply (e.g., solar energy). In the context of this model, we derive golden rules that govern efficiency in both the accumulation of capital and in the extraction of natural resources for use in production. These results supplement the Solow/Hartwick model of maximum consumption in helping to illuminate the notion of sustainable development.

Suggested Citation

  • Lee Endress & James A. Roumasset, 1993. "Golden Rules For Sustainable Resource Management," Working Papers 199319, University of Hawaii at Manoa, Department of Economics.
    • Handle: RePEc:hai:wpaper:199319
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    File URL: http://www.economics.hawaii.edu/research/workingpapers/88-98/WP_93-19.pdf
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    References listed on IDEAS

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    1. William D. Nordhaus, 1973. "The Allocation of Energy Resources," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(3), pages 529-576.
    2. Geoffrey Heal, 1976. "The Relationship Between Price and Extraction Cost for a Resource with a Backstop Technology," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 371-378, Autumn.
    3. Lewis, Tracy R, 1982. "Sufficient Conditions for Extracting Least Cost Resource First," Econometrica, Econometric Society, vol. 50(4), pages 1081-1083, July.
    4. Robert M. Solow & Frederic Y. Wan, 1976. "Extraction Costs in the Theory of Exhaustible Resources," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 359-370, Autumn.
    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. Roumasset, J. & Isaak, D. & Fesharaki, F., 1983. "Oil prices without OPEC : A walk on the supply-side," Energy Economics, Elsevier, vol. 5(3), pages 164-170, July.
    7. Hartwick, John M., 1978. "Investing returns from depleting renewable resource stocks and intergenerational equity," Economics Letters, Elsevier, vol. 1(1), pages 85-88.
    8. Kemp, Murray C & Long, Ngo Van, 1980. "On Two Folk Theorems Concerning the Extraction of Exhaustible Resources," Econometrica, Econometric Society, vol. 48(3), pages 663-673, April.
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    Cited by:

    1. Chang, Youngho & Fang, Zheng, 2017. "Efficient, equitable and sustainable energy policy in a small open economy: Concepts and assessments," Energy Policy, Elsevier, vol. 105(C), pages 493-501.
    2. Jannett Highfill & Michael McAsey, 2001. "Landfilling Versus ``Backstop'' Recycling When Income Is Growing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(1), pages 37-52, May.
    3. Endress, Lee H. & Roumasset, James A. & Zhou, Ting, 2005. "Sustainable growth with environmental spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 58(4), pages 527-547, December.
    4. James A Roumasset & Lee H Endress, 2000. "Sustainable Development Without Constraints," Working Papers 200009, University of Hawaii at Manoa, Department of Economics.
    5. James Roumasset & Lee Endress, 1996. "The yin and yang of sustainable development: A case for win‐win environmentalism," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 1(2), pages 185-194.
    6. Jouvet, Pierre-André & Schumacher, Ingmar, 2012. "Learning-by-doing and the costs of a backstop for energy transition and sustainability," Ecological Economics, Elsevier, vol. 73(C), pages 122-132.
    7. Alexandre Stamford da Silva & Fernando Campello de Souza, 2008. "The economics of water resources for the generation of electricity and other uses," Annals of Operations Research, Springer, vol. 164(1), pages 41-61, November.
    8. Mubashir Qasim, 2018. "Some Links between Sustainability and Well-Being," Working Papers in Economics 18/13, University of Waikato.

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