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This paper extends the study by Gao et al. (Empir Econ 37:153-184, 2009), which models the profit-maximizing dynamic oil production from a large oil field in Saudi Arabia by using an engineering model of oil extraction. Although it gives an important insight about the dynamics of oil production by examining and comparing different scenarios for exogenous variables, it assumes perfect knowledge and foresight about the future. However, the production decision might not be based on different scenarios, but rather on different expectations about the future. Therefore, we propose to extend the model by incorporating uncertainty arising from a random arrival date of a new backstop technology that will enable the production of a perfect substitute for oil. We find that the optimal production path has a different dynamic under this new specification that may explain the less aggressive extraction behavior of the producer before 2000, which was concluded to be economically irrational by Gao et al. (2009). [ABSTRACT FROM AUTHOR]

We examine the relationship between the economy and the environment in a model where production uses nonpolluting renewable and polluting nonrenewable resources. There is policy intervention through a tax on emissions and a subsidy to renewables extraction/production. Results show that both instruments are able to decrease emissions intensity of output. However, when used together, the desired effect is higher. Empirically it is shown that the subsidy achieves higher renewables intensity and although present emissionsperoutput are similar for both instruments, the subsidy achieves lower future levels. [ABSTRACT FROM AUTHOR]

Although the role and importance of innovation support in South Africa is a well-recognised concept on the national level, provincial governments have only recently started to debate, investigate and explore instruments through which innovation can be leveraged and supported regionally. Extant theory and practice is vague on providing support on how to design precise solutions. In this paper we consider the Western Cape Department of Economic Development and Tourism (WCDEDAT) in South Africa. The goal of the paper is to design and populate a policy-learning framework on the provincial government level. We explore the key functions of the provincial government towards supporting innovation and propose a policy-learning framework extensively exploring possible systems instrument goals and actual instruments/ mechanisms towards performing such functions. We argue that this policy-learning framework could be useful to a wider audience and that it can also serve as a guide for regions at a similar level of development. [ABSTRACT FROM PUBLISHER]

The adoption of the System of Environmental-Economic Accounting 2012: Central Framework as a UN statistical standard is a landmark in environmental accounting. The SEEA has the same authority and weight as the System of National Accounts in the pantheon of official statistics. The SEEA defines the unit value of depletion of an exhaustible resource to equal the average unit value of the asset (the total asset value divided by the physical stock of resource). By applying this definition to a non-optimal Dasgupta-Heal-Solow model of an extractive economy, we show that 'depletion-adjusted net saving' as defined in the SEEA supports a generalized version of the Hartwick Rule. This measure of saving can guide policies for sustainable development in extractive economies, in particular fiscal policies concerning consumption and investment expenditures funded by resource rents. The conditions required to support this finding are (i) that extraction declines over time at a constant rate, and (ii) that the marginal cost of resource extraction is constant. A less general result holds in the case of increasing marginal extraction costs. [ABSTRACT FROM AUTHOR]

This article re-examines the nature of the causality between natural gas consumption and economic growth in G7 countries over the period from 1965 to 2011. We employ the Granger causality procedure proposed by Emirmahmutoglu and Kose (2011) which takes into account cross-sectional dependency and heterogeneity across countries. Our overall empirical results support the neutrality hypothesis for the panel while the individual country results confirm the same result with the exception of the case of UK, where the conservation hypothesis is confirmed, showing that GDP causes natural gas consumption in the country. These results make policies that promote the consumption of natural gas risk-free with regard to their effects to the economic growth and development levels. [ABSTRACT FROM PUBLISHER]

Industria imports oil, produces final goods and wishes to mitigate global warming. Oilrabia exports oil and buys final goods from the other country. Industria uses the carbon tax to impose an import tariff on oil and steal some of Oilrabia's scarcity rent. Conversely, Oilrabia has monopoly power and sets the oil price to steal some of Industria's climate rent. We analyze the relative speeds of oil extraction and carbon accumulation under these strategic interactions for various production function specifications and compare these with the efficient and competitive outcomes. We prove that for the class of HARA production functions, the oil price is initially higher and subsequently lower in the open-loop Nash equilibrium than in the efficient outcome. The oil extraction rate is thus initially too low and in later stages too high. The HARA class includes linear, loglinear and semi-loglinear demand functions as special cases. For non-HARA production functions, Oilrabia may in the open-loop Nash equilibrium initially price oil lower than the efficient level, thus resulting in more oil extraction and climate damages. We also contrast the open-loop Nash and efficient outcomes numerically with the feedback Nash outcomes. We find that the optimal carbon tax path in the feedback Nash equilibrium is flatter than in the open-loop Nash equilibrium. It turns out that for certain demand functions using the carbon tax as an import tariff may hurt consumers' welfare as the resulting user cost of oil is so high that the fall in welfare wipes out the gain from higher tariff revenues. [ABSTRACT FROM AUTHOR]

We study optimal carbon capture and storage (CCS) from point sources, taking into account damages incurred from the accumulation of carbon in the atmosphere and exhaustibility of fossil fuel reserves. High carbon concentrations call for full CCS, meaning zero net emissions. We identify conditions under which partial or no CCS is optimal. In the absence of CCS the CO2 stock might be inverted U-shaped. With CCS more complicated behavior may arise. It can be optimal to have full capture initially, yielding a decreasing stock, then partial capture while keeping the CO2 stock constant, and a final phase without capture but with an inverted U-shaped CO2 stock. We also introduce the option of adaptation and provide a unified theory regarding the optimal use of CCS and adaptation. [ABSTRACT FROM AUTHOR]

In analysing the relatively recent economic decline of the iconic remote Australian mining town, Broken Hill, this paper seeks to derive lessons for the equally iconic gold and nickel mining city of Kalgoorlie Boulder. It also makes indicative predictions about the economic status of Kalgoorlie in 2050. Mining around Broken Hill, which has contracted dramatically since 1980, has been associated with a major decrease of population and housing, an aging population and income levels significantly below the national average. Attempts to diversify the local economy into tourism have had only limited success in replacing the impacts of mining. With the closure of the Super Pit after 2020, Kalgoorlie faces a similar period of decline during the coming decades. [ABSTRACT FROM AUTHOR]

This paper documents the channels through which commodity price volatility can affect resource intensive industries' investment decisions, production levels and profitability. Over the very long run, the Canadian forestry sector was not immune from the negative effects of commodity price volatility. However, the long run averages mask dynamic and asymmetric patterns in the sector's responses to price volatility. The supply of investment funds from formal-external sources was suppressed during episodes of high and rising commodity price volatility, but insensitive to low and falling volatility. These effects weakened as the economy matured. The accumulation of reproducible and natural capital was affected by commodity price volatility through an investment supply channel that was also asymmetric, but in this case, the effect was strongest during low and falling volatility. These results show how a maturing economy with diversified investment opportunities can become increasingly immune from the negative effects of commodity price volatility. [ABSTRACT FROM AUTHOR]

Purpose – The aim of this paper is to develop a specific strategic foresight methodology and integrate this into roadmapping which is suitable for corporations. To date, reasonable practical experience has been accumulated, but there is a lack of a comprehensive conceptual approach for using strategic foresight and roadmapping to solve management problems. Design/methodology/approach – This approach integrates corporate strategic foresight and roadmapping in several stages. During the foresight phase, the authors create scenarios of long-term development determined by long-term macro trends and challenges to identify “points of growth” and system of priorities for company growth. A strategic roadmap enables the company to form a “corridor” for specific projects and create a long-term action plan to implement the priorities identified in the first phase. Using a project roadmap makes it possible to ensure the implementation of a specific project, defining a system of goals, the necessary measures, their timing and financing, as well as indicators to assess their effectiveness. Findings – The core result of the suggested methodology is a set of possible trajectories of innovation development, reflecting the whole technological chain involving R & D – technology – product – market. Each path involves a sequence of organizational actions and key decision-making points that are necessary to be taken to introduce new technological solutions and develop innovation products with new features to the customer/user. These routes support decision-making in such fields as the choice of the product line, establishment of new partnerships with developers of innovation technologies, decisions regarding “insourcing-outsourcing” and the requirements for relevant scientific and technological breakthroughs. It allows corporations to create strategies for commercializing innovation products. Originality/value – The methodology proposes to integrate the results of foresight studies and in roadmaps and finally in business planning, adopting innovative strategies and management decisions. It contributes to the development of common principles and approaches to the subject, while taking account of company-specific features that can significantly affect the decision-making mechanism. The methodology is applicable to foreign and Russian companies when creating innovative strategies and management decisions based on the results of foresight. [ABSTRACT FROM AUTHOR]

The changes in the food supply over a period of almost 50 years in the three biggest economies in Asia were examined to estimate the change in the virtual phosphorus requirements in each country over time with regard to food consumption. While the overall food supply in the rapidly growing economies of India and China grew rapidly, there are some remarkable differences in the food supply in these two emerging giant economies over time. Having undergone rapid development in the late 1970s and 1980s, Japan's food supply stabilized with the stagnation of the Japanese economy in the mid 1990s. The implications of the changes in the food supply of these three economies are discussed in terms of the phosphorus demand for producing food for these three countries using the concept of the virtual phosphorus. Future projections were made to create a likely case scenario for the virtual phosphorus requirements in these countries in the lead up to 2050 by extrapolation and by incorporating the latest population predictions. [ABSTRACT FROM AUTHOR]

This paper examines financial sector characteristics in resource-dependent economies. Using an extensive data set covering 128 countries for the period 1995 to 2009, we present empirical evidence that the banking sector tends to be smaller in resource-dependent economies. Moreover, we locate a low threshold level at which the higher resource-dependence begins to be harmful for domestic banking sector. We also find evidence that the use of market-based financing is more common in resource-dependent economies. Further, our results suggest that a financial sector formed according to the needs of the resource sector might be unfavorable for emerging businesses, thereby hampering economic diversification and reinforcing the resource curse. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to empirically examine whether economic dependence on various natural resources is associated with lower investment in health, after controlling for countries׳ geographical and historical fixed effects, corruption, autocratic regimes, income levels, and initial health status. Employing panel data for 118 countries for the period 1990–2008, we find no compelling evidence in support of a negative effect of resources on healthcare spending and outcomes. On the contrary, higher dependence on agricultural exports is associated with higher healthcare spending, higher life expectancy, and lower diabetes rates. Similarly, healthcare spending increases with higher mineral intensity. Finally, more hydrocarbon resource rents are associated with less diabetes and obesity rates. There is however evidence that public health provision relative to the size of the economy declines with greater hydrocarbon resource-intensity; the magnitude of this effect is less severe in non-democratic countries. [ABSTRACT FROM AUTHOR]

This study provides the first empirical investigation to test one of transmission channels of resource curse, i.e. marginalized entrepreneurship activities. Our panel data analysis of 65 countries from 2004 to 2011 shows a negative and statistically significant association between oil rents dependency and entrepreneurship indicator. This finding is robust to control of other major drivers of entrepreneurship, unobservable country- and time-fixed effects and a different measurement of oil rents dependency. In addition, our main results show that government effectiveness among other dimensions of good governance has a statistically significant moderating effect in entrepreneurship–oil rents nexus. [ABSTRACT FROM PUBLISHER]

An introduction to the journal is presented in which the editors discuss various papers within the issue on topics including influence of China's economic policies on Latin America, China's outward direct investment and China's international economic cooperation.

Current China- Africa relations have been statically framed: China invests in the continent and exports resources extracted by its state-owned enterprises and fuelled by aid flows, while simultaneously undercutting African industry through cheap exports. We frame this debate, then explore how the framework could adjust in response to changing economic realities in China, centered on the 'rebalancing' of the growth model toward domestic consumption. We argue that a new wave of private sector-led, low-cost manufacturers may find its way to selected African shores, in the process transforming those economies and the way in which China interacts with them, both for the better. [ABSTRACT FROM AUTHOR]

This study solves for the optimum replacement rate (ORR) and initial replacement year (IRY) of cocoa trees ( Theobroma cacao) in Ghana to maximize net present value and achieve steady state by employing a phased replanting approach. The annual ORR is 5%-7% across the three production systems studied: Low Input, Landrace Cocoa, High Input, No Shade Amazon Cocoa, and High Input, Medium Shade Cocoa. The optimal IRY ranges from year 5 to year 9 as a function of cocoa prices, fertilizer prices, labor prices, and percentage yield loss due to disease outbreaks. Deterministic results project economic gains that exceed currently practiced replacement approaches by 5.57%-14.67% across production systems with reduced, annual income volatility. The method applied in this study can be used to increase cocoa yields and stabilize income over time, and facilitate substantial quality of life improvements for many subsistence cocoa farmers in Ghana and around the world. [ABSTRACT FROM AUTHOR]

This paper deals with possible foreign reactions to unilateral carbon demand reducing policies. It differentiates between demand side and supply side reactions as well as between intra- and inter-temporal shifts in greenhouse gas emissions. In our model, we integrate a stock-dependent marginal physical cost of extracting fossil fuels into Eichner and Pethig's (Int Econ Rev 52(3):767-805, ) general equilibrium carbon leakage model. The results are as follows: Under similar but somewhat tighter conditions than those derived by Eichner and Pethig (Int Econ Rev 52(3):767-805, ), a weak green paradox arises. Furthermore, a strong green paradox can arise in our model under supplementary constraints. That means a 'green' policy measure might not only lead to a harmful acceleration of fossil fuel extraction but to an increase in the cumulative climate damages at the same time. In some of these cases there is even a cumulative extraction expansion, which we consider disastrous. [ABSTRACT FROM AUTHOR]

It is argued that the explosive growth experienced in much of the World since the middle of the 19th Century is due to the exploitation and use of fossil fuels which, in turn, was made possible by capital good innovations that enabled this source of energy to be used effectively. Economic growth is viewed as the outcome autocatalytic co-evolution of energy use and the application of new knowledge associated with energy use. It is argued that models of economic growth should be built from innovation diffusion processes, unfolding in history, rather than from a timeless aggregate production function. A simple 'evolutionary macroeconomic' model of economic growth is developed and tested using almost two centuries of British data. The empirical findings strongly support the hypothesis that growth has been due to the presence of a 'super-radical innovation diffusion process' following the industrial deployment of fossil fuels on a large scale in the 19th Century. Also, the evidence suggests that large and sustained movements in energy prices have had a very significant long term role to play. [ABSTRACT FROM AUTHOR]

This paper attempts to provide a probable answer to a longstanding resource curse puzzle; i.e., why resource-rich nations grow at a slower rate compared with less fortunate ones. Using an innovative threshold estimation technique, the empirical results reveal that there is a threshold effect in the natural resources–economic growth relationship. We find that the impact of natural resources is meaningful to economic growth only after a certain threshold point of institutional quality has been attained. The results also shed light on the fact that the nations that have low institutional quality depend heavily on natural resources while countries with high quality institutions are relatively less dependent on natural resources to generate growth. [ABSTRACT FROM PUBLISHER]

Using the Chakravorty et al. (J Econ Dyn Control 30:2875-2904, ) ceiling model, we characterize the optimal consumption paths of three energy resources: dirty oil, which is non-renewable and carbon emitting; clean oil, which is also non-renewable but carbon-free thanks to an abatement technology, and solar energy, which is renewable and carbon-free. The resulting energy-mix can supply the energy needs of two sectors. These sectors differ in the additional abatement cost they have to pay for consuming clean rather than dirty oil, as Sector 1 (industry) can abate its emissions at a lower cost than Sector 2 (transport). We show that it is optimal to begin by fully capturing Sector 1's emissions before the ceiling is reached. Also, there may be optimal paths along which the capture devices of both sectors must be activated. In this case, Sector's 1 emissions are fully abated first, before Sector 2 abates partially. Finally, we discuss the way heterogeneity of abatement costs causes sectoral energy price paths to differ. [ABSTRACT FROM AUTHOR]

Two oil price shocks changed the pattern of cheap oil. The first was the Arab embargo on oil exports in 1973. Oil prices rose five fold. In 1978, the second was the fall of Shah Iran. Prices soared to $80-$100 a barrel in today's prices. In 1960, OPEC was established and since then it has been a considerable political and economic force in the oil market. Two thirds of the world's oil reserves belong to OPEC members. OPEC is accused of being responsible for most of the price increases due to their production cuts and market power. This paper provides a general framework to examine the role of OPEC in affecting oil prices through the extracted quantities. A mathematical model is developed to explore the objective function of OPEC, which includes economic and political considerations. The idea is that OPEC members consider both the political support of their citizens and profits when determining oil extraction rates. This support is represented by a 'harm function' which was added to the objective function of OPEC. The solution of the model lends some support for inclusion of this harm function, through which OPEC benefits from the cuts in production aimed at harming the western countries. For this harm function to be meaningful empirically, OPEC members should have a high harm indicator, α. With high harm indicator values, OPEC harms itself financially. The results suggest that OPEC appears to be accepting considerable monetary setbacks to appease its citizens' taste for harming the West. At different discount rates, the monetary losses range from about 10-20%. Solving the mathematical model required estimation of the residual demand that OPEC faces plus the cost function that applies to OPEC production. This paper reports the results of these estimations. [ABSTRACT FROM AUTHOR]

The abandoned Picher mining district in northeastern Oklahoma, part of the Tri-State mining district, was the largest source of sulfide ores of lead and zinc in the U.S.A. in the early twentieth century. After abandonment in the 1960s, numerous environmental problems caused by the abandoned mines and large tailings piles affected the district and surrounding areas with contamination of water, soils, vegetation, wildlife, and humans with lead and other metals. Current (2011) cleanup efforts in the district include separation of coarse and fine tailings particles, sales of the coarse particles (which consist mostly of dolomite and chert) for use as aggregate in asphalt, and burial of metals-rich fine tailings below ground to reduce exposure to and transport of toxic metals. Analysis in this paper indicates that reprocessing these tailings to extract remaining aluminum, titanium, lead, and zinc may be feasible. The value of lead and zinc in the tailings of this abandoned mining district probably are not sufficient to justify recovery of metals from the tailings at current market prices, but potential recovery of aluminum and titanium from these tailings may provide sufficient returns to justify the costs associated with reprocessing the fine tailings remaining in this district. [ABSTRACT FROM AUTHOR]

We show that previous results from the body of literature on the resource curse have primarily been driven by the collapse in oil prices during the mid-1980s. By exploiting cross-country variations in the size of initial oil endowments and the timing of oil discoveries, we find that there is a stable positive relationship between oil abundance and long-run economic growth. Using dynamic panel data methods, we also find that there is no evidence that higher oil rents hinder growth. However, to focus on material gain means that the welfare gain from oil is understated, because oil-rich countries benefit more by the reduction in infant mortality and the gain in longevity. Interestingly, such oil-led health improvements are more pronounced in non-democratic countries, where initial heath conditions were poor and oil wealth is concentrated among the ruling elites. [ABSTRACT FROM AUTHOR]

In this paper, I consider an economy that is constrained by the use of natural resources and driven by knowledge accumulation. Resources are essential inputs in all sectors. I show that population growth and poor input substitution are not detrimental but, on the contrary, are even necessary to obtain a sustainable consumption level. I find a general rule to define the conditions for a constant innovation rate. The rule does not apply to capital but to labor growth, which is the crucial input in research. Furthermore, the rule relates to the sectoral structure of the economy, and to demographic transition. The results continue to hold with a backstop technology, and are extended for the case of minimum resource constraints. [ABSTRACT FROM AUTHOR]

Empirical evidence has suggested a 'resource curse' exists, in which countries with abundant resources may have higher initial consumption but then grow more slowly. The effect appears to be dependent on a country's political structure. Theoretical models not typically accounted for historical exceptions, or have not shown the effect exists in a dynamic growth setting. We derive the resource curse effect in an optimal growth model augmented with a political process. The economy has a finite nonrenewable resource, and the government planner can choose to over-extract natural resources relative to the efficient path by distorting the discount rate, but in so doing incurs political costs that depend on the presence of democracy. Government planners in non-democratic countries usually have more autonomy in policymaking than those in democratic countries; therefore, the political cost is lower for non-democratic countries. We show that the incentive for the planner to distort the extraction path is larger, the higher is the initial resource endowment. Consistent with empirical evidence, the distortion raises short-term consumption but lowers the long-term growth rate, and institutional differences create corner solutions that explain why some resource-abundant countries avoid the curse. These results are robust to the inclusion of autonomous technological change. [ABSTRACT FROM AUTHOR]