Small-scale fisheries often operate under conditions of regulated open access; that is, the fishery is subject to natural or regulatory constraints on fishing technology, including regulations of ...fishing gear and fishing practices, but typically there is no direct regulation of catches. We study how an increase in harvesting efficiency changes the different components of welfare—consumer surplus and producer surplus—in such a regulated open-access fishery, taking t the feedback of harvesting on stock dynamics, i.e. the dynamic common-pool resource externality into account. We find that both components of welfare change in the same direction. If, and only if, initial efficiency is low enough so that there is no maximum sustainable yield (MSY) overfishing, an improvement of harvesting efficiency increases welfare.
Payments for environmental services (PES) are widely adopted to support the conservation of biodiversity and other environmental goods. Challenges that PES schemes have to tackle are (i) ...environmental uncertainty and (ii) information asymmetry between the provider of the service (typically a farmer) and the regulator. Environmental uncertainty calls for action-based payment schemes, because of the more favorable risk allocation if the farmer is risk-averse. Information asymmetry, on the other hand, calls for a performance-based payment, because of the more direct incentives for the farmer. Based on a principal-agent model, we study the optimal combination of both, performance-based and action-based payments under conditions of environmental uncertainty and asymmetric information. We find that for a risk-neutral regulator a combination is optimal in the majority of cases and that the welfare gain of the combined scheme over a pure action-based (performance-based) payment increases with information asymmetry (environmental uncertainty). We further show that for a regulator who is risk-averse against fluctuations in environmental goods provision the optimal performance-based payment is lower than for a risk-neutral regulator. We quantitatively illustrate our findings in a case study on the enhancement of the butterfly Scarce Large Blue (Maculinea teleius) in Landau/Germany.
► We study how performance- and action-based payments should be optimally combined. ► We analyze a principal-agent model of conservation contracting. ► We show how the optimal PES scheme depends on uncertainty and asymmetric information. ► Optimal performance-based payments decrease with the regulator's risk aversion. ► A case-study of butterfly conservation shows that the welfare gains may be large.
What is sustainability economics? Baumgärtner, Stefan; Quaas, Martin
Ecological economics,
01/2010, Letnik:
69, Številka:
3
Journal Article
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While economists have been contributing to the discussion of various aspects of sustainability for decades, it is just recently that the term “sustainability economics” was used explicitly in the ...ecological, environmental, and resource economics community. Yet, the contributions that use the term “sustainability economics” do not refer to any explicit definition of the term, and are not obviously joined by common or unifying characteristics, such as subject focus, methodology, or institutional background. The question thus arises: what is “sustainability economics”? In this essay, we systematically define and delineate “sustainability economics” in terms of its normative foundation, aims, subject matter, ontology, and genuine research agenda.
Building on the epidemiological SIR model, we present an economic model with heterogeneous individuals deriving utility from social contacts creating infection risks. Focusing on social distancing of ...individuals susceptible to an infection we theoretically characterize the gap between private and social cost of contacts. Our main contribution is to quantify this gap by calibrating the model with unique survey data from Germany on social distancing and impure altruism from the beginning of the COVID-19 pandemic. The optimal policy is to drastically reduce contacts at the beginning to almost eradicate the epidemic and keep them at levels that contain the pandemic at a low prevalence level. We find that also in laissez faire, private protection efforts by forward-looking, risk averse individuals would have stabilized the epidemic, but at a much higher prevalence of infection than optimal. Altruistic motives increase individual protection efforts, but a substantial gap to the social optimum remains.
Resilience as a descriptive concept gives insight into the dynamic properties of an ecological-economic system. Sustainability as a normative concept captures basic ideas of intergenerational justice ...when human well-being depends on natural capital and services. Thus, resilience and sustainability are independent concepts. In this paper, we discuss the relationship between resilience and sustainability of ecological-economic systems. We use a simple dynamic model where two natural capital stocks provide ecosystem services that are complements for human well-being, to illustrate different possible cases of the relationship between resilience and sustainability, and to identify the conditions under which each of those will hold: a) resilience of the system is necessary, but not sufficient, for sustainability; b) resilience of the system is sufficient, but not necessary, for sustainability; c) resilience of the system is neither necessary nor sufficient for sustainability; and d) resilience is both necessary and sufficient for sustainability. We conclude that more criteria than just resilience have to be taken into account when designing policies for the sustainable development of ecological-economic systems, and, vice versa, the property of resilience should not be confused with the positive normative connotations of sustainability.
► We study the question of how, in general, is resilience related to sustainability. ► We analyze a dynamic and stochastic model of an ecological-economic system. ► We show that four logically possible relationships may hold in a given system. ► Thus, the deduction from resilience to sustainability, and reverse, is not possible. ► Resilience should not be confused with the normative connotations of sustainability.
Conservation of renewable natural resources and promotion of economic growth are both sustainable development goals. Here, we study the interdependency between economic growth, international trade, ...and the use of renewable natural resources—under alternative institutional settings of either open access or full property rights—in an endogenous growth model. We find that if the resource is depleted over time, consumption growth is reduced. Economic growth and international trade only impact resource use when the resource is harvested under full property rights. Then, widening international trade can lead countries to shift from conservation to depletion. Changes in the institutional setting of resource use in one country may have repercussions on trading partners. Our results indicate potential trade-offs between the sustainable development goals and imply that policies focusing on resource use or trade (e.g., international trade bans or certified trade) are not sufficient to prevent resource depletion.
We study optimal subsidies for renewable energy (RE) generation to internalize external benefits from inter-temporal learning-by-doing spillovers, taking into account increasing marginal costs at the ...industry level due to limited availability of sites suitable for RE. We find that the optimal RE subsidy is differentiated according to productivity and derive a condition on production and spillovers under which less efficient, i.e. more costly, technologies should receive higher support, as common in actual policy-making. We show that such a support of technological diversification is optimal if (i) productive sites are scarce, which limits future utilization of knowledge and if (ii) technologies mature rapidly with little further scope for learning. Prima facie evidence for these elasticities for Germany, Denmark and UK suggests that support for technology diversification is the optimal approach for these countries.
•In practice, renewable energy support policies often differentiate support such that costlier technologies receive higher support rates.•We present a theoretical model of renewable energy support under learning-by-doing and site scarcity.•We derive a condition, expressed in elasticities, under which less efficient technologies should receive higher support.•Technological diversification is optimal if productive sites are scarce and technologies mature rapidly.•Prima facie empirical evidence suggests that technology diversification is optimal for Germany, Denmark and UK.
Risk aversion in renewable resource harvesting Kelsall, Claudia; Quaas, Martin F.; Quérou, Nicolas
Journal of environmental economics and management,
September 2023, 2023-09-00, 2023-09, Letnik:
121
Journal Article
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We study optimal harvesting of a renewable resource with stochastic dynamics. To focus on the effect of risk aversion, we consider a resource user who is indifferent with respect to intertemporal ...variability. In this setting, a constant escapement strategy is optimal, i.e. the stock after optimal harvesting is constant. We find that under common specifications of risk aversion, increasing risk and risk aversion increase current resource use. We show that this is due to an investment effect, i.e. the resource user invests in risk free alternatives, rather than the risky resource stock. A quantitative application of the model for the Eastern Baltic cod fishery shows that risk and risk aversion can have a much larger effect on optimal harvesting than found in the previous literature.
The Arctic Ocean is an early warning system for indicators and effects of climate change. We use a novel combination of experimental and time-series data on effects of ocean warming and acidification ...on the commercially important Northeast Arctic cod (Gadus morhua) to incorporate these physiological processes into the recruitment model of the fish population. By running an ecological-economic optimization model, we investigate how the interaction of ocean warming, acidification and fishing pressure affects the sustainability of the fishery in terms of ecological, economic, social and consumer-related indicators, ranging from present day conditions up to future climate change scenarios. We find that near-term climate change will benefit the fishery, but under likely future warming and acidification this large fishery is at risk of collapse by the end of the century, even with the best adaptation effort in terms of reduced fishing pressure.
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