Shared renewable resources and gains from trade under technology standards

Abstract

Using a two-country, two-good model of international trade, we examine gains from trade and strategic interaction in resource management among countries that share renewable resources such as fishery stocks. Two goods are a resource good, which is the harvest of the shared stock, and some other good that may be thought of as manufactures. The productivity of the resource good depends on harvesting technology and the stock level. This paper focuses on technology standards (e.g., restrictions on fishing gears, vessels, areas, and time) over other methods for resource management because they are most commonly implemented in fisheries. Technology standards are modeled as a restriction on the harvesting technology; that is, under strict technology standards, firms exploit resources as if they are using inferior harvesting technology. We show that an opening up of trade may reduce the shared stock and cause steady-state utility to decrease in a resource-good importing country and increase in a resource-good exporting country. Strikingly, when the shared stock is in jeopardy (a high demand for the harvest), steady-state harvest is maximized after an opening up of trade by what we call multilateral resource management in this paper and both countries gain from trade.

The Stable Equilibrium Analysis of Nonlinear Renewable Resource Stock Evolution

“…which is a nonlinear diferential equation. Rearranging equation (11) to transform into a linear equation, frstly rewrite equation ( 11) as follows:…”

“…Upmann and Gromov [10] aimed to demonstrate the structure of optimal eforts for harvesting in the open-access problem under diferent scenarios. Takarada et al [11] examined the open-access resources with shared renewable resource assumption under no resource management. Tis paper characterized that natural resources were not only accessible by local residents, implying that resources were internationally common.…”

The economics of standards: A literature review

“…Zimon et al (2020) suggested that the implementation of the ISO 22000 standard was conducive to the development of key stages in the supply chain. Studies of environmental standards (Wilson et al, 2002), quality standards (Maskus et al, 2005;Sánchez et al, 2010), and later studies of low-carbon fuel standards (Lade & Lin Lawell, 2015), air pollution standards (Sankar et al, 2020), dairy and fruit standards (Groot-Kormelinck et al, 2021), and production and product standards (Fernandes et al, 2019;Takarada et al, 2020;Yu & Bouamra-Mechemache, 2016) expressed similar thoughts and investigated whether positive or negative effects predominate.…”

Open‐access renewable resources and pollution: Trade and policy implications in a two‐country model

“…Our basic structure (utility functions, stock evolution equation, production function of both goods, etc.) shares various premises in the analysis of trade and renewable resources such as Brander and Taylor (1997a, 1997b, 1998), Emami and Johnston (2000), Jinji (2007), Rus (2012), Takarada et al (2013), Rus (2016) and Takarada et al (2020). Three papers by Brander and Taylor (1997a, 1997b, 1998) deserved to be examined more closely to understand the main results the literature built on.…”