Torben Klarl
Market dynamics, dynamic resource management and
environmental policy in the context of (strong) sustainability
Abstract:
In this paper, we investigate the relationship between market dynamics,
dynamic resource management and environmental policy. In contrast to
static market entry games, this paper draws attention to the effects of
market dynamics on resource dynamics et vice versa, because (1) we show
that feedback processes are necessary for obtaining a better
understanding of what drives the dynamics between the evolution of
common-pool resources and the number of harvesters and more
importantly, (2) this analysis provides an environment discussing
sustainability in an appropriate inasmuch dynamic way. The paper makes
following major points: (1) Interpreting the monopoly-scenario as a
non-cooperative solution and the firm coexistence solution as a
cooperative solution, it is shown that the coexistence solution of this
model implies a degenerate saddle-node equilibrium. (2) An increasing
number of harvesters does not necessarily imply a lower stock of the
common-pool resource in the long run. (3) The paper introduces a way
establishing an output-sharing solution by implementing an output tax,
which turns out to be a pure effort tax in the long run. (4) Strong
resource sustainability is not possible, given cost reducing
technological progress is relevant and policy interventions ceased.
With respect to environmental policy, we can conclude that a tax scheme
is not a substitute to a partnership solution dealing with the
common-pool problem, but is treated as an instrument establishing such
a solution in the sense of a policy mix approach.
JEL: Q28, Q57, C61
Paper:
Paper available as pdf-file.
Beitrag Nr. 315, Volkswirtschaftliche Diskussionsreihe, Institut
für
Volkswirtschaftslehre der Universität Augsburg
Contact:
Torben
Klarl, University of Augsburg, Department of Economics,
D-86135
Augsburg,
Germany, phone +49-821-598-4189, fax +49-821-598-4231
email: torben.alexander.klarl@wiwi.uni-augsburg.de
Bo., 23.12.2010