Uncertainty and Amenity Values in Renewable Resource Economics

Lafforgue, Gilles

doi:10.1007/s10640-005-1671-z

Cited by 12 publications

(11 citation statements)

References 20 publications

(13 reference statements)

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“…In that sense, our framework is close to Lafforgue (2005), which provides such an analysis in the context of a single-agent optimal control problem of resource extraction when there is amenity value for the exploited stock. The effect of uncertainty is shown to be ambiguous as well, and can lead to conservation.…”

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confidence: 88%

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Strategic Exploitation of a Common Resource under Environmental Risk

Fesselmeyer

Santugini

2012

SSRN Journal

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Abstract:We study the effect of environmental risk on the extraction of a common resource. Using a dynamic and non-cooperative game in which an environmental event impacts the renewability and the quality of the resource, we show that the anticipation of such an event has an ambiguous effect on extraction and the tragedy of the commons. A risk of a reduction in the renewability induces the agents to extract less today while a risk of a deterioration in the quality has the opposite effect. Moreover, when environmental risk induces conservation, the tragedy of the commons is worsened.

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confidence: 88%

“…2 See among others: Reed (1993), Clarke and Reed (1994), Tsur and Zemel (1995, 1998, Lafforgue (2005), Alvarez and Koskela (2006), Mitra and Roy (2006), and Polasky et al (2011).…”

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confidence: 99%

Strategic Exploitation of a Common Resource under Environmental Risk

Fesselmeyer

Santugini

2012

SSRN Journal

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“…Therewith the absolute value of environmental degradation which results from natural disasters increases with the mean level of pollution used in production. 6 This assumption resembles the settings of Fernandez (2005) or Lafforgue (2005).…”

Section: The Modelmentioning

confidence: 99%

Efficient Dynamic Pollution Taxation in an Uncertain Environment

Soretz

2006

Environ Resource Econ

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This paper analyzes efficient pollution taxation within a stochastic model of endogenous growth. Pollution is a by-product of production and causes disutility. Furthermore, the productivity which results from environmental quality is uncertain. This reflects e.g. uncertain capital depreciation induced by natural disasters like hurricanes or floods. This uncertainty is shown to raise an ambiguous impact on the optimal pollution level as well as on optimal environmental taxation. Market equilibrium turns out to be suboptimal, since the households mis-perceive their individual impact on pollution. Conditions for welfare maximizing pollution taxation are stated and it is shown that a direct pollution tax is not appropriate to yield Pareto-optimal growth. Instead, a linear capital income tax together with a linear abatement subsidy build an efficient tax scheme, if secondarily the governmental budget is balanced. Moreover, an increase in the riskiness of environmental productivity may even lead to an increase in the optimal pollution level and to a decrease in optimal environmental taxation, depending predominantly on the preference parameters. Copyright Springer Science+Business Media, Inc. 2007pollution, taxation, uncertainty, endogenous growth, D8, D9, H2, O1, O4, Q2,

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“…The first one regards final consumption as the only source of satisfaction (Dasgupta andHeal 1974, 1979;Stiglitz 1974, Solow 1974Grossman and Helpman 1991;Aghion and Howitt 1992). The second one, taken from a wider viewpoint, considers an intrinsic valuation of natural resources as an additional element for personal well-being (Krautkraemer 1985;Beltratti et al 1993Beltratti et al , 1995Beltratti et al , 1998Chichilnisky 1997;Heal 1998Heal , 2001Lafforgue 2005;Wirl 1999Wirl , 2004. Despite the theoretical advances offered by this inclusion of the intrinsic evaluation of natural resources as a source for personal satisfaction, the framework defined by the authors in this field is insufficient to analyze how certain non-economic factors, such as the existence of identities promoting cooperative attitudes regarding the environment, can bear an influence on the behavior of agents.…”

Section: Introductionmentioning

confidence: 99%