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Recent contributions have questioned whether biofuels policies actually lead to emissions reductions, and thus lower climate costs. In this paper we make two contributions to the literature. First, we study the market effects of a renewable fuel standard. Opposed to most previous studies we model the supply of fossil fuels taking into account that fossil fuels is a non-renewable resource. Second, we model emissions from land use change explicitly when we evaluate the climate effects of the renewable fuel standard. We find that extraction of fossil fuels most likely will decline initially as a consequence of the standard. Thus, if emissions from biofuels are sufficiently low, the standard will have beneficial climate effects. Furthermore, we find that the standard tends to reduce total fuel (i.e., oil plus biofuels) consumption initially. Hence, even if emissions from biofuels are substantial, climate costs may be reduced. Finally, if only a subset of countries introduce a renewable fuel standard, there will be carbon leakage to the rest of the world. However, climate costs may decline as global extraction of fossil fuels is postponed. Research Council of Norway Swedish research foundation Mistra

This paper proposes an endogenous growth model with an essential non-renewable resource, where economic growth enables firms to invest in innovation in the extraction technology and to allocate more capital to resource extraction. Innovation in the extraction technology offsets the deterioration of ore qualities and keeps the production costs of the non-renewable resource constant. Aggregate output as well as production and use of the non-renewable resource increase exponentially. Our model explains the long-run trends of non-renewable resource prices and world production over more than 200 years. If historical trends in technological progress and in the deterioration of ore qualities continue, it is in the realm of possibility that non-renewable resources are de facto inexhaustible. Our results suggest that the industrialization in China and other emerging economies contributes to keeping non-renewable resource prices constant in the long run.

Domestic consumption taxes on oil products largely differ across countries, ranging from very high subsidies to very high taxes. The empirical literature on the issue has highlighted the role of revenue-raising (Ramsey commodity taxation) and externalitycorrection (Pigovian taxation) motives for national taxation. Isolatedly, the theoretical literature on non-renewable-resource taxation has emphasized the role of the optimumtariff dimension of excise taxes which reflects countries’ non-cooperative exercise of their market power. This paper reconciles these two strands by comprehensively addressing the issue. First, we propose a multi-country model of national taxation with oil – modeled as a polluting exhaustible resource – and some regular commodities. Domestic welfare is maximized with respect to domestic taxes under a revenue-collection constraint. The optimal domestic tax on oil consumption not only consists of a Ramsey inverse-elasticity term and of a Pigovian term, but also of an optimum-tariff component. In fact, resource exhaustibility implies a form of supply inelasticity that magnifies optimum-tariff arguments. Second, based on a multiple regression using a data set with a large number of countries, we test the power of the optimum-tariff tax component in explaining national gasoline taxes. We find strong evidence that this component plays a crucial role in countries’ taxation of gasoline.

While fossil energy dependency has declined and energy supply has grown in the postwar world economy, future resource scarcity could cast its shadow on world economic growth soon if energy markets are forward looking. We develop an endogenous growth model that reconciles the current aggregate trends in energy use and productivity growth with the intertemporal dynamics of forward looking resource markets. Combining scarcity-rent driven energy supply (in the spirit of Hotelling) with profit-driven Directed Technical Change (in the spirit of Romer/Acemoglu), we generate transitional dynamics that can be qualitatively calibrated to current trends. The long-run properties of the model are studied to examine whether current trends are sustainable. We highlight the role of extraction costs in mining.

The Hotelling rule argues that the price for a non-renewable resource adjusts to the shadow value of the resource, reflecting its remaining availability. This study provides an empirical test of this hypothesis. It investigates whether the price of crude oil does adjust to unexpected news about oil field discoveries. The observed price reaction is compared with a prediction of the price decline as derived from the Hotelling model. This study finds evidence for an adjustment of the price to news about greater resource availability: the price of crude oil declines on average by 0.88% on discovery days. The degree of adjustment to the new level of scarcity is not found to differ significantly from the social optimum. Thus, there is evidence for the existence of a shadow cost component - a necessary pre-requisite for the Hotelling rule to hold.

This paper highlights several management practices from the oil and gas industry to support the proposition that financial performance in the finite, non-renewable resource business relates more to upstream rather than downstream activities. Based on the analysis of nine oil and gas companies, this study supports a previous study involving fourteen mining companies that showed reserves growth is one of the main levers of value creation in mining. Interestingly, this study also finds that the oil and gas industry has been historically more profitable than mining. The reason, it is argued, is that oil and gas companies count on management practices that focus primarily on the upstream segments of the business, compared to the traditional downstream focus of mining. This paper delves into these ideas to conclude that what mining may need to improve its competitive advantage is a new organizational framework. Another conclusion is that the upstream management focus is vital not only for strategy formulation in the resource business, but also for policy formulation in economies based on the export of finite, non-renewable resources.

Phosphorus (P) is an essential, finite resource whose geological, economic, and geopolitical accessibility may become critical in the future. Because P losses from agriculture, sewage and waste have serious environmental impacts such as eutrophication, it would be desirable to close P cycles. However, there may arise dilemmas due to trade-offs with other issues. For instance, recycling of animal bones – containing relatively high amounts of P – was prohibited in Switzerland after the BSE crisis (1989 to 2000) due to perceived health risks. Our analysis indicates that the greatest potentials for closing the P cycle in Switzerland are to reduce P losses in agriculture and to increase P recovery from sewage and waste. Whereas in agriculture significant improvements have been made, the disposal dilemma of animal bones led to diminishing amounts of P being recycled from waste. Based on their risk perception, the involved stakeholders prioritized preventing potential harm to (human) health over maximizing P recycling.

El Ecuador, luego de “la larga noche neoliberal” requería cambios profundos y urgentes en el marco jurídico hidrocarburífero. La situación jurídica era insostenible y la urgencia de cambiarla, indiscutible. Esta conclusión se nutre del análisis de la realidad petrolera ecuatoriana y de sus perspectivas, sobre todo después de dos décadas de depredación de la institucionalidad estatal y de entreguismo a los intereses transnacionales. La Constitución de Montecristi aprobada en referéndum el 28 de septiembre de 2008 demandó cambios sustanciales al marco jurídico hidrocarburífero. El proyecto de Ley de Hidrocarburos presentado por el Ejecutivo a la Asamblea Nacional no fue adecuadamente analizado. Se introdujeron ajustes puntuales para adecuar la ley a las demandas de renegociación contractual propuesta con una visión en extremo coyuntural. La nueva Ley de Hidrocarburos abre la puerta legal para la entrega de campos petroleros en explotación e incluso de la infraestructura petrolera a empresas estatales. Al crear los contratos para la exploración y/o explotación de petróleo se configura una situación compleja y contradictoria con los intereses nacionales.

Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large literature has emerged showing under what conditions this so-called 'Green Paradox' may occur. We review this literature and identify the key mechanisms behind these paradoxical policy outcomes and highlight avenues for future research.

We advance an original assumption whereby a good state of the environment positively affects labor productivity in R&D such that deteriorating environmental quality negatively impacts R&D. We study the implications of this assumption for the optimal solution in an R&D-based model of growth, where the use of a non-renewable resource generates pollution. We show that in such a case, it is socially optimal to postpone extraction, as opposed to the situation in which the environment has no effect on productivity in R&D. Furthermore, insofar as environmental quality declines and subsequently recovers, we find that it is optimal to re-allocate employment to R&D in line with productivity changes. If environmental quality recovers only partially from pollution, R&D effort optimally begins above its long-run level, then progressively declines to a minimum and eventually increases to its steady-state level.

En el presente artículo se analiza la dependencia de la comunidad internacional hacia el petróleo y los problemas al momento de realizar cambios sustanciales que permitan la migración a una nueva matriz energética mundial.

We study the Markov-perfect Nash equilibrium (MPNE) of a game between oil-importing countries, who seek to maintain the atmospheric carbon concentration under a given ceiling, and oil-exporting countries. The oil-importing countries set a carbon tax and the oil-exporting countries control the producer price. We obtain implicit feedback rules and explicit non-linear time paths of extraction, carbon tax, and producer price. Consumers are always able to reap some share of the scarcity and monopoly rents, whereas producers partially pre-empt the carbon tax only if the marginal damage under the ceiling is small. We compare the MPNE to the efficient, open-loop, and cartel-without-tax equilibria.

Optimum commodity taxation theory asks how to raise a given amount of tax revenue while minimizing distortions. We reexamine Ramsey’s inverse elasticity rule in presence of Hotelling-type non-renewable natural resources. Under standard assumptions borrowed from the non-renewable-resource-extraction and from the optimum-commodity-taxation literatures, a non-renewable resource should be taxed in priority whatever its demand elasticity and whatever the demand elasticity of regular commodities. It should also be taxed at a higher rate than other commodities having the same demand elasticity and, while the tax on regular commodities should be constant, the resource tax should vary over time. There are two basic ways to alleviate resource supply limitations; one is to produce reserves for subsequent extraction; the other one is to rely on imports. When the generation of reserves by exploration is determined by the net-of-tax rents derived during the extraction phase, reserves become a conventional form of capital and royalties tax its income; our results contradict Chamley’s conclusion that capital should not be taxed at all in the very long run. When the economy is autarkic, in the absence of any subsidy to reserve discoveries, the optimal tax rate on extraction obeys an inverse elasticity rule almost identical to that of a commodity whose supply is perfectly elastic. As a matter of fact, there is a continuum of optimal combinations of reserve subsidies and extraction taxes, irrespective of whether taxes are applied on consumption or on production. When the government cannot commit, extraction rents are completely expropriated and subsidies are maximum. In general the optimum Ramsey tax not only causes a distortion of the extraction path, as happens when reserves are given, but also distorts the level of reserves developed for extraction. When that distortion is the sole effect of the tax, it is determined by a rule reminiscent of the inverse elasticity rule applying to elastically-supplied commodities. In an open economy, Ramsey taxes further acquire an optimum-tariff dimension, capturing foreign resource rents. For countries that import the resource, the result that domestic resource consumption is to be taxed at a higher rate than conventional commodities having the same demand elasticity emerges reinforced.

In contrast to the standard approach in energy economics, this paper assumes that physical capital accumulation is relatively more energy-intensive than consumption. By means of Gaussian hypergeometric functions, we provide a closed-form representation of the optimal solution paths of our variables in levels, whatever the initial conditions (i.e., global dynamics). We find that, in general, the optimal trajectories are nonmonotonic. P.S. Dasgupta and G.M. Heal [Review of Economic Studies(special number), 3–28 (1974)] pointed out this result (local dynamics) for the optimal consumption in a model with identical technology for both physical capital accumulation and consumption. However, our paper introduces five novelties with respect to their study, namely, global dynamics, the importance of the proportion of nonrenewable energy resources to endowment of physical capital [S(0)/K(0)], the role of technical progress, U-shaped behavior of consumption, and nonmonotonicity of resource extraction.

International audience; This paper extends the literature on the taxation of polluting exhaustible resources by taking international heterogeneities and national tax-setting into account. We propose a two-country Romer model of endogenous growth in which the South is endowed with the stock of an essential polluting non-renewable resource and world economic growth is driven by a northern research sector. We consider the stock of pollution as affecting global welfare. First, we characterize the optimal environmental taxation policies. Second, we examine the impacts of national taxes. Their time profile determines the extraction path, the dynamics of pollution accumulation and that of world output. Their respective levels entail inter-country interactions by altering the efficiency of the world resource allocation, the tax revenues and the resource rents. We study isolatedly the distortional and distributional effects of local taxes. Then, we completely assess the overall impact of a unilateral tax increase. Finally, we find that, even if heterogeneous countries coordinate their taxation policies to correct the global environmental problem, their divergent strategic interests cause another global, non-environmental distortion in the allocation of the resource.

We study backstop adoption and carbon dioxide emission paths in a two-region model with unilateral climate policy and non-renewable resource consumption. The regions have an equal endowment of the internationally tradable resource and a backstop technology. We first study the case of a unilateral stock constraint (e.g. a 450 ppmv carbon dioxide concentration target), and show that the non-abating region makes the final switch to the backstop before the abating region does, though the latter region has two disjoint phases of backstop use if its marginal cost is sufficiently low. Furthermore, we show that the abating region has an inverse N-shaped emission path, with growing emissions in the period for which the ceiling is binding. In addition, there is a phase in which this region has a positive carbon price, but higher emissions than the non-abating region. With a global intertemporal carbon budget instead of a stock constraint, the order of definite backstop adoption is reversed and the abating region’s emissions are always lower. We also show that unilateral climate policy does not lead to international carbon leakage.

To study transfers between oil-consuming developed countries and oil-producing developing countries, we use a dynamic decentralized general-equilibrium model (GEM) with two countries : a rich, altruistic, and resource-poor country (North) and a poor , resource-rich country (South), where resource-owners live alongside impoverished workers. On the one hand, North’s taxation of resource use extracts a portion of South’s mining rents in a distorting manner. On the other hand, North distributes foreign aid to improve the situation of South’s poor. The coexistence of these transfers in opposite directions illustrates the interference between North’s tax and international-aid policies. We analyze the interference and suggest a contractual solution based on coordination between the two sets of policies., Pour étudier les transferts entre les pays développés, consommateurs de pétrole, et les pays pauvres qui en produisent, nous proposons un modèle d’équilibre général décentralisé dynamique à deux pays : un pays riche, altruiste et pauvre en ressource (Nord) et un pays pauvre, riche en ressource (Sud) où les propriétaires de la ressource cohabitent avec des travailleurs pauvres. D’une part, la taxation de l’usage de la ressource dans le Nord extrait une partie des rentes minières du Sud de manière distorsive. D’autre part, le Nord distribue une aide étrangère pour améliorer la situation des pauvres du Sud. La coexistence de ces transferts de sens contraires témoigne de l’interférence des politiques de fiscalité et d’aide internationale mises en place par le Nord. Cet article analyse cette interférence et suggère une issue contractuelle sur la base d’une coordination de ces politiques., Daubanes Julien, Berlinschi Ruxanda. Prendre d’une main et donner de l’autre : taxation des produits pétroliers et aide internationale . In: Économie & prévision, n°190-191, 2009-4-5. pp. 21-37.

The bachelor thesis aims on analysis of support in generation of electricity from renewable resources in the Czech Republic and its historical development. In the view of gradual growth of consumption and prices of energy is this thesis very actual, especially in the time of global financial crisis. Theoretical part of the work defines main historical goals in economic policy, which led to the policy of support in generation of electricity from renewable resources. Then the description of renewable and non-renewable resources fallows. Theoretical part ends with consideration of possibility, that non-renewable resources could be worked-out. In analytical part of the work is researched policy of support in generation of electricity from renewable resources. The main sort of subventions in the Czech Republic and legislature of European Union is defined. Impacts of these policies are shown on share of electricity production from renewable resources and gross domestic consumption. This research is compared with other members of European Union. The last part analyzes usability of each renewable resource in conditions of the Czech Republic. The main goal of this bachelor work is analysis of support in generation of electricity from renewable resources in the Czech Republic and eventual recommendations on improvement in these policies.

If environmental quality positively affects the productivity of labor in R&D and pollution is caused by the use of a non-renewable resource, it is socially optimal to postpone extraction and to intertemporally adjust R&D effort.

We present an endogenous growth model in which the use of a non-renewable natural resource generates carbon-dioxide emissions that can be partly sequestered. This approach breaks with the systematic link between resource use and pollution emission. The accumulated stock of remaining emissions has a negative impact on household utility and corporate productivity. While sequestration quickens the optimal extraction rate, it can also generate higher emissions in the short run. It also has an adverse effect on economic growth. We study the impact of a carbon tax : the level of the tax has an effect in our model, its optimal level is positive, and it can be interpreted ex post as a decreasing ad valorem tax on the resource., Nous présentons un modèle de croissance endogène dans lequel l’utilisation d’une ressource naturelle non renouvelable polluante génère des émissions de CO2, dont une partie peut être séquestrée. Ceci rompt l’habituel lien systématique entre utilisation de la ressource et émissions polluantes. Le stock accumulé des émissions restantes affecte négativement l’utilité des ménages et la productivité des entreprises. Si la séquestration accélère le rythme optimal d’extraction, elle peut aussi générer de plus fortes émissions à court-terme. De plus, elle est défavorable à la croissance économique. Nous étudions l’impact d’une taxe sur les émissions de carbone ; le niveau de cette taxe compte ici, son niveau optimal est positif, et elle peut être interprété ex post comme une taxe ad-valorem décroissante sur la ressource., Grimaud André, Rouge Luc. Séquestration du carbone et politique climatique optimale. In: Économie & prévision, n°190-191, 2009-4-5. pp. 53-69.

This article proposes a complementary explanation for why oil-rich economies have experienced a relative low GDP growth over the last decades: the proportion of taxes in the prices of petroleum products have been globally increasing for the four last decades, thus making oil revenues grow slower than output from manufacturing and yielding a low growth of oil-exporting countries' GDPs. This is illustrated in a two-country model of oil depletion examining why a net oil-exporting country and a net oil-importing country are differently affected by increasing taxes on the resource use. The hypothesis is constructed on the theory of non-renewable resources taxation. The argument is based on the distributional effects of taxes on exhaustible resources, that are mainly borne by the suppliers. The theoretical predictions are not invalidated when put up against available statistics., Economics Working Papers, 2009 (09/102)

The importance and complexity of petroleum and hard minerals operations is matched by the importance and complexity of finding effective ways to tax them. Many of these challenges arise in other activities too (exhaustibility of deposits being the main exception), but they take such extreme form in relation to resources as to have led to a proliferation of creative instruments and analytical methods. This paper reviews the challenges for tax policy in dealing with the resource sector, the principal instruments used, and some of the central design issues.

Quizá uno de los hechos más importantes al que asistimos hoy es la politización de la sociedad. Vivimos un cisma importante en la forma en la cual la sociedad se ha vinculado a la actividad política, un distanciamiento signado por el quemeimportismo, comprensible desde la experiencia de los últimos 25 años de democracia. Hoy existe una modificación importante en esa actuación, los ecuatorianos y ecuatorianas hemos convertido el debate sobre lo que sucede en el país en conversación usual en hogares, lugares de trabajo, encuentros deportivos, festivos, etc. La decisión de la Asamblea Constituyente y del Gobierno Nacional de distribuir masivamente el texto constitucional, no ha hecho sino aportar en este importante proceso de politización. Solamente el conocimiento, el debate, la actitud crítica afincada en la sociedad, serán la base para que el proceso de cambio se sostenga.

Assuming a social welfare function that smoothes expenditure, this paper calculates a sustainability benchmark for the non-mineral balance in Botswana that is based on a notion of a "permanent income" from non-renewable resources. It is derived by constructing a hypothetical annuity from revenues from these resources, which is held constant in terms of GDP. Botswana is an interesting case because current projections suggest that diamond resources could be largely exhausted within a generation.

Increasing energy use, climate change, and carbon dioxide (CO 2 ) emissions from fossil fuels make switching to low-carbon fuels a high priority. Biofuels are a potential low-carbon energy source, but whether biofuels offer carbon savings depends on how they are produced. Converting rainforests, peatlands, savannas, or grasslands to produce food crop–based biofuels in Brazil, Southeast Asia, and the United States creates a “biofuel carbon debt” by releasing 17 to 420 times more CO 2 than the annual greenhouse gas (GHG) reductions that these biofuels would provide by displacing fossil fuels. In contrast, biofuels made from waste biomass or from biomass grown on degraded and abandoned agricultural lands planted with perennials incur little or no carbon debt and can offer immediate and sustained GHG advantages.

The paper develops a model with non-exponential population growth, nonrenewable natural resources, and endogenous knowledge creation to analyse substitution between primary inputs and an essential use of resources in the innovation sectors, which is generally considered as most unfavourable for growth. We show that population growth and poor input substitution are not detrimental but even needed to obtain sustainable consumption. A permanent increase in living standards can be achieved under free market conditions. With a backstop technology, the system converges to a balanced growth path with classical properties., Economics Working Paper Series, 08/87

This thesis presents several novel market-based policy models for encouraging the production and consumption of environmentally friendly products in markets where such products do or can exist. These policies aim to lead to lower energy consumption, reductions in pollution emissions and conservation of non-renewable resources. Applications of the models are considered in the context of the housing market, with particular regard to mid-size urban centers.

Exploitation of non–renewable resources is an intensively studied field of environmental economics in the last century. Since the influential Hotelling’s paper a huge progress is made in the depletable resources literature. Although a variety of methodologies is used in that problem’s solutions a basic question of time inconsistency arises in the solution process. We show the sources of dynamical time inconsistency in a leader – follower game for which the buyer leads while the extractor follows and the players employ open loop strategies. Also we make use of Markovian informational structure, in a non – renewable resource Nash game, in order to extract strategies that are time consistent. Finally we enlarge the utility function space from the logarithmic utility to the utility functions that exhibits relative risk aversion with the same, with respect to time consistency, strategies.

In this paper we present empirical facts on oil exploitation and a model that can replicate some of these facts. In particular, we show that the time path of the oil price, on the one hand, and the extraction and discovery rate, on the other hand, seem to follow a U-shaped and an inverted U-shaped relationship, respectively, which is confirmed by simple non-parametric estimations. Next, we present a theoretical model where a monopolistic resource owner maximizes inter-temporal profits from exploiting a non-renewable resource where the price of the resource depends on the extraction rate and on cumulated past extraction. The resource is finite and only a part of the resource is known while the rest has not yet been discovered. The analysis of that model demonstrates that the extraction rate and the price of the resource show the empirically observed pattern if the stock of the initially known resource is small.

We study the effectiveness of climate change policy in a model with multiple non-renewable resources that differ in their carbon content. We find that, when allowing some time between announcement and implementation of a cap on carbon dioxide emissions, emissions from non-renewable energy sources increase at the time of announcement. There are two channels behind this effect. First, since a binding constraint on emissions restricts energy use during some period of time, more must be extracted during other periods. Second, since low carbon energy sources are relatively more valuable when the policy is implemented, it is optimal to conserve them ahead of enforcement. This might induce a switch to high-carbon resources before the policy is implemented.

Venezuela's growth experience over the past fifty years is characterised by a high economic growth rate from 1950 to 1977 and a low economic growth rate over the 1977-2003 period. In particular, we show that the country has been in a ‘great depression’ since the late seventies. We also show that although Venezuela has an oil abundant economy, this growth experience is largely due to the evolution of its real non-oil GDP. We perform a growth accounting exercise to quantify the extent to which the growth experience in the non-oil sector is a result of physical capital accumulation, finding that non-oil sector behavior can largely be explained by the evolution of TFP. Finally, we also make some correlations to determine whether the oil sector has affected the non-oil sector, either through its capital accumulation or through its TFP. We find that the correlation between oil revenues and capital per worker or non-oil TFP is always negative., Financial support received from the Spanish Ministry of Education and Science through Projects SEJ2007-62081/ECON and SEJ2006-10827/ECON, the University of the Basque Country through UPV GIU06/41 and the Basque Government through HM-2007-1-4.

En el momento en que los demócratas de los Estados Unidos han encabezado, al parecer, la cruzada mundial contra el cambio climático, quizá no es inútil leer (o releer) el ensayo del periodista Paul Roberts, publicado a finales del 2004 bajo el título llamativo de "El fin del petróleo". En efecto, cuando se reactivan las recetas del "charity business" (como eran los megaconciertos contra la hambruna y la sequía en Somalia, o para la liberación de Mandela) para salvar nuestro planeta, y mientras el marketing verde de Albert Gore desemboca en otras recetas de buen consumo para ciudadanos "aniñados", vale la pena analizar las otras "verdades incómodas" de las que nos advierte Roberts en un lenguaje perfectamente claro, con información muy actualizada.

We study how restricting CO2 emissions affects resource prices and depletion over time. We use a Hotelling-style model with two non-renewable fossil fuels that differ in their carbon content (e.g. coal and natural gas) and in addition are imperfect substitutes in final good production. We show that an economy facing a CO2 flow-constraint may substitute towards the relatively dirty input. As the economy tries to maximise output per unit of emissions it is not only carbon content that matters: productivity matters as well. With an announced constraint the economy first substitutes towards the less productive input such that more of the productive input is available when constrained. Preliminary empirical results suggest that it is cost-effective to substitute away from dirty coal to cleaner oil or gas, but to substitute from natural gas towards the dirtier input oil.

Non-renewable resources are an obstacle for positive long run growth if they are essential for production, households solve an intertemporal Ramsey problem and population is growing. Modern growth models predict that growth is positively related to growth in production factors. Hence, there are opposing forces at work if labor as one factor is growing and the use of the non-renewable resource as another factor is shrinking. The paper develops a semi-endogenous growth model with one labor and one resource using sector and derives conditions for stable positive long run growth in per capita production and consumption.

The aim of this paper is to analyze how active R&D policies affect the growth rate of an economy with endogenous growth and non-renewable resources. We know from Scholz and Ziemens (1999) and Groth (2006) that in infinitely lived agents (ILA) economies, any active R&D policy increases the growth rate of the economy. To see if this result also appears in economies with finite lifetime agents, we developed an endogenous growth overlapping generations (OLG) economy à la Diamond which uses non-renewable resources as essential inputs in final good’s production. We show analytically that any R&D policy that reduces the use of natural resources implies a raise in the growth rate of the economy. Numerically we show that in economies with low intertemporal elasticity of substitution (IES), active R&D policies lead the economy to increase the depletion of non-renewable resources. Nevertheless, we find that active R&D policies always imply increases in the endogenous growth rate, in both scenarios. Furthermore, when the IES coefficient is lower (greater) than one, active R&D policies affect the growth rate of the economy in the ILA more (less) than in OLG economies. Financial support from the Spanish Ministry of Education and Science, through Projects SEJ2006-12793/ECON, SEJ2007-62081/ECON and SEJ2006-10827/ECON, and Universidad del País Vasco through Grupo de Investigación Consolidado UPV GIU06/41.

In this paper, we study the implications of assuming different technologies for physical capital accumulation and consumption. More precisely, we assume that physical capital accumulation is relatively more energy-intensive than consumption. We conclude that this hypothesis, together with the possibility of technical progress (in particular, energy-saving technical progress), has important implications on economic growth. This model entails some technical difficulties. However, we provide a full analytical characterization of both short and long-run dynamics using Gauss Hypergeometric functions.

This article reviews issues related to the incorporation of non-renewable resources in the theory of economic growth and development. As an offshoot of the new growth theory of the last two decades a series of contributions have studied endogenous technical change in relation to resource scarcity. We discuss the main approaches within this literature and consider questions like: How is the new literature related to the wave of resource economics of the 1970s? What light is thrown on the limits-to-growth issue? Does the existence of non-renewable resources have implications for the controversies within new growth theory?

Fossil fuels are fundamental inputs throughout all modern economies. The reduced availability of these basic inputs, as well as the stabilization of greenhouse gases concentration, have negative impact on GDP and economic growth through cutbacks in energy use. However, this trade-off between energy reduction and economic growth is less severe if energy conservation is raised by means of energy-saving technologies. This paper studies this hypothesis. In particular, we analyze the effect of a tax on the energy expenditure of firms as a way to pro- mote investments in energy-saving technologies. We consider a general equilibrium model with embodied and exogenous energy-saving technological progress in a vintage capital framework, where the scrapping rule is endogenous, and linearities are eliminated., Les combustibles fossiles sont des facteurs de production fondamentaux dans toutes les économies modernes. La disponibilité limitée de ce type de facteurs, tout comme la stabilisation des gaz à effet de serre, peuvent avoir un effet négatif sur le PIB et la croissance, dû à la réduction des stocks énergétiques. Néanmoins, cet arbitrage est moins sévère si l’on utilise des technologies d’épargne énergétique comme moyen de conservation de l’énergie. Dans cet article, les auteurs introduisent cette hypothèse. En particulier, les auteurs analysent les effets d’un impôt sur les dépenses énergétiques des entreprises, comme une incitation à l’investissement dans les technologies d’épargne énergétique. Les auteurs considérent un modèle d’équilibre général avec du progrès technologique (exogène) incorporé d’épargne énergétique et générations de capitaux, où la décision de replacement de l’équipement est endogène, et les linéarités sont éliminées.

In this paper we analyze the implications of recycling for long-run economic development. In contrast to former approaches, we take explicit account of the circulation of matter in the economy. Building upon a Romer (1990) type growth model we consider virgin resources and recycled wastes as essential inputs to production. These material inputs either end up as waste after consumption or are bound in the capital stock - depending on the utilization of the produced output. As accumulating wastes can be recycled and again be employed in production, the waste stock serves as a source of valuable inputs in our model. We focus on the implications of recycling-related market failures and the integration of material balances on the dynamics of the economy. It is shown that, even in the absence of environmental policy, long-run development is sustainable. Yet, optimal environmental policy can serve as a means to raise growth. March 2006

It is increasingly being recognised that global natural resource consumption levels exceed planetary limits and that the present trajectory of industrial development is not sustainable. To achieve a more viable existence necessitates a fundamental shift in priorities from the prevailing economic growth-centred, consumer driven philosophy to one that marries aspirations for economic growth with long-term environmental and social considerations. This shift in priorities requires significant contributions and action at the global, national and local levels by the primary 'wheels' of sustainability: government, corporations and civil society. Over the past 100 years, corporations have become the most powerful institution on the planet with both the financial resources and institutional capacity to take the lead role in shaping a sustainable future for humankind. Yet, within and between industry sectors and across geographic locations there has been great diversity in the extent and level of corporate commitment and engagement in societal efforts relating to planetary sustainability. Hence, greater understanding of what drives corporate interest and involvement in ecological sustainability will become increasingly critical to promoting corporate engagement in processes and practices to secure a long-term future for humanity. However, there has been limited explanatory research oriented upon developing an understanding of the processes and factors associated with corporate 'eco-change'. In recognition of this shortcoming in the literature, the present study utilised the case of the non-renewable resource extractive sector of Australia to examine corporate engagement with processes and practices for planetary sustainability. Specifically, it sought to construct and evidence an explanation of the external and internal factors that have promoted and/or retarded corporate engagement with planetary sustainability in the non-renewable resource extractive sector (NRRES) of Australia. Guided by grounded theory methodology, an instrumental case study of the NRRES in Australia was undertaken. The NRRES was chosen as this sector's profile, visibility and activities over the past twenty years have meant it has come under mounting pressure to incorporate the concept and principles of planetary sustainability into its ethos and operations. As such, the sector represents the opportunity to study this phenomenon within a dynamic context of sectoral and corporate responses to evolving societal expectations. The research was undertaken in three phases and the principal research method was in-depth key informant interviews with purposively sampled members of the sector's stakeholder groups. Each NRRES corporation is situated at the centre of a web of interconnected interests or 'stakes' necessitating efforts to balance the various stakeholder interests to maintain the institution's license-to-operate and secure a long-term existence. The thesis constructs an explanation of the societal drivers of NRRES corporate engagement with planetary sustainability, organised as the three categories of government, civil society and the corporate sector. These three groupings of stakeholders have been clustered into the broad category or theme of Activating Engagement, which recognises their collective role as the stimuli for NRRES corporation engagement in processes and practices for planetary sustainability. While the theme of Activating Engagement emphasises the importance and interrelatedness of the roles and actions within and between the three primary wheels of sustainability, of particular note is the evident rise of civil society as a more active societal stakeholder and more salient driver of corporate uptake of social and environmental issues. As the identified external drivers play a critical role in motivating NRRES corporation engagement, it is a corporation's particular characteristics that ultimately determine the extent and level of uptake of strategies to demonstrate corporate social responsibility. The thesis develops an explanation of the internal factors mediating NRRES corporate engagement comprising the factors of leadership, resources, structures, culture and understanding. These factors are conceptualised as the theme of Capacity for Engagement, which identifies their collective importance in a NRRES corporation's preparedness, impetus and capability relating to interest and participation in planetary sustainability. While all of the five factors are seen as essential to meaningful NRRES corporate engagement, the thesis identifies leadership as the most critical factor in Capacity for Engagement. Based on the findings of the research, several explanatory frameworks are developed. These frameworks aid in deepening our understanding of the NRRES corporate engagement process, in particular, the interconnections between the factors impeding and facilitating corporate interest and engagement with processes and practices for planetary sustainability. As such, these frameworks will make a substantial contribution to building our understanding of how the various factors and their components or 'pieces of the puzzle' interact and interrelate with each other to generate corporate engagement. The frameworks are the culmination of the research and, coupled with the more detailed explanations of their constituent factors, enhance our knowledge and understanding of the dynamics of NRRES corporation engagement with planetary sustainability. This enhanced understanding is significant and could be of considerable value in informing and targeting efforts to advance the depth and breadth of NRRES corporation engagement with processes and practices for planetary sustainability. To advance the standing of the study's findings, a series of case studies could be undertaken targeting the investigation of NRRES corporate engagement in other geographic locations and within different industry sectors.

The paper aims at extending the debate on Environmental Kuznets Curves to the case of non-renewable resources and to discuss the driving forces that might give rise to EKC's in this case. The paper at hand deviates from the standard EKC analysis in two ways: First, mostly EKC's are analyzed for flow variables. In this paper we argue that EKC's may very well arise for certain stock variables like minerals or waste. Second, most papers that provide a theoretical foundation for EKC's focus on assumptions like technological anomalies (e.g. increasing returns) or technological switches. We offer an alternative explanation by showing that EKC's might arise simply due to the combination of recycling and the rising scarcity of materials. It is shown that an EKC for non-renewables might emerge during the transition to the long-run balanced growth path. Whether or not an EKC arises depends e.g. on initial conditions, but also on preferences and technology. The assumptions made about the ability of recycling firms to internalize the interrelation between recycling decisions today and the future availability of recyclable waste matter with respect to the prerequisites for an EKC and the speed of convergence. Internalization furthermore implies that an economy can be caught in a poverty trap, i.e. it might not be able to converge to the long-run growth equilibrium if the initial endowment with resources and capital is too low., Economics Working Paper Series, 06/52

This article reviews issues related to the incorporation of non-renewable resources in the theory of economic growth and development. As an offshoot of the new growth theory of the last two decades a series of contributions have studied endogenous technical change in relation to resource scarcity. We discuss the main approaches within this literature and consider questions like: How is the new literature related to the wave of resource economics of the 1970s? What light is thrown on the limits-to-growth issue? Does the existence of non-renewable resources have implications for the controversies within new growth theory?

This paper has been presented at DEGIT-X held in México 2005.-- Revised: 2008-08. Venezuela's growth experience over the past fifty years is characterized by a high economic growth rate from 1950 to 1970 and a low economic growth rate in the last thirty years. Although Venezuela is an oil abundant economy, this growth experience is largely accounted for by the evolution of its real non-oil GDP. We use growth accounting to quantify the extent to which the growth experience in non-oil sector is due to physical capital accumulation and we find that whereas in the period 1950-1980 most of the growth experience is accounted for by the evolution of TFP, this is not the case in the period 1980-1998. Nonetheless, the Venezuelan GDP is mainly driven by non-oil GDP; the use of oil revenues by the government may help us to understand, at least in part, the growth experience of the non-oil sector of the Venezuelan economy. Through the calculation of some correlations, we find a positive correlation of oil rents with physical capital, and of oil rents with non-oil TFP in the period 1950-1970, when the flow of oil rents was relatively high (the good times). However, in the period 1971-1998, there is a negative correlation of oil rents with non-oil TFP and with physical capital. Finally, we construct a simple growth model to study the effect of the oil rents, managed by the government, on private physical capital accumulation. The authors gratefully acknowledge the nancial support received from the Spanish Ministry of Education and Science through Projects SEJ2007-62081/ECON and SEJ2006-10827/ECON, the University of the Basque Country through UPV GIU06/41 and the Basque Government through HM-2007-1-4.

In this paper we analyze the importance of recycling in the strive for sustainable development. In contrast to former approaches we emphasize the role of the waste stock as a source of valuable inputs. We enhance a Romer (1990) type endogenous growth model by a material balance condition that reflects the circulation of matter in the economy. Diferentiated intermediate products are produced from recycled waste and virgin resources. These material intermediates are then employed in the production of final output. They either end up as waste after consumption or are bound in the capital stock depending on the utilization of the produced output. We show that, even in the absence of environmental policy, long-run development is sustainable in this economy. The intuition is, that, as waste is a valuable resource in our model, not recycling part of it, cannot be optimal in the long-run., Economics Working Paper Series, 05/37

We study how restricting CO2 emissions affcts resource prices and depletion over time.We use a Hotelling-style model with two nonrenewable fossil fuels that differ in their carbon content (e.g. coal and natural gas) and that are imperfect substitutes in final good production.We study both an unexpected constraint and an anticipated constraint.Both shocks induce intertemporal substitution of resource use.When emissions are unexpectedly restricted, it is cost-effective to use high-carbon resources relatively more (less) intensively on impact if this resource is relatively scarce (abundant).If the emission constraint is anticipated, it is cost-effective to use relatively more (less) of the low-carbon input before the constraint becomes binding, in order to conserve relatively more (less) of the high-carbon input for the period when climate policy is active in case the high-carbon resource is relatively scarce (abundant).

International audience; We analyze the impact of the pollution generated by the use of non-renewable resources on the standard results of growth models. In this context, we obtain a Hotelling rule which is not a pure efficiency condition any longer. Subsequently, we show that some of the optimal paths’ standard properties change: in particular, an increase in the households’ psychological discount rate leads to a slower extraction of the resource. Moreover, we present a simple endogenous growth model that allows us to study the effects of an environmental policy aimed at correcting the distortion introduced at the equilibrium. We show that the tax level does not matter, and that a decreasing tax on the resource use yields the optimum.

We study how restricting CO2 emissions affcts resource prices and depletion over time.We use a Hotelling-style model with two nonrenewable fossil fuels that differ in their carbon content (e.g. coal and natural gas) and that are imperfect substitutes in final good production.We study both an unexpected constraint and an anticipated constraint.Both shocks induce intertemporal substitution of resource use.When emissions are unexpectedly restricted, it is cost-effective to use high-carbon resources relatively more (less) intensively on impact if this resource is relatively scarce (abundant).If the emission constraint is anticipated, it is cost-effective to use relatively more (less) of the low-carbon input before the constraint becomes binding, in order to conserve relatively more (less) of the high-carbon input for the period when climate policy is active in case the high-carbon resource is relatively scarce (abundant).