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The problem of optimal forest rotation in a nonstationary environment can, in general, not be solved analytically. Even qualitatively characterizing how the solution changes over time is only possible in some special cases. In this paper, we consider an approximation of the true solution to the nonstationary problem. We derive an approximate harvesting rule by solving a sequence of stationary problems that assume the growth conditions at that point in time will prevail indefinitely. Each such problem can be solved using the classic Faustmann rule. We numerically compare this approximate solution to the true solution, both in terms of the harvesting rule and the resulting expected profits, for a wide range of scenarios. We find that the harvesting rules are very similar (mostly <1% difference) and the profit losses associated with following the approximate rule are very small (less than 0.3%).

Human activities are threatening to push the Earth system beyond its planetary boundaries, risking catastrophic and irreversible global environmental change. Action is urgently needed, yet well-intentioned policies designed to reduce pressure on a single boundary can lead, through economic linkages, to aggravation of other pressures. In particular, the potential policy spillovers from an increase in the global carbon price onto other critical Earth system processes has received little attention to date. To this end, we explore the global environmental effects of pricing carbon, beyond its effect on carbon emissions. We find that the case for carbon pricing globally becomes even stronger in a multi-boundary world, since it can ameliorate many other planetary pressures. It does however exacerbate certain planetary pressures, largely by stimulating additional biofuel production. When carbon pricing is allied with a biofuel policy, however, it can alleviate all planetary pressures.

Following the oil-price surge in the wake of Russia's invasion of Ukraine, many countries in the EU are proposing to cut taxes on petrol and diesel. Using standard theory and empirical estimates, we assess how such tax cuts will influence the oil income in Russia. We find that a tax cut of 20 euro cents per liter would increase Russia's oil profits by around 11-17 million Euros per day in the short run and long run. This is equivalent to 4100-6300 million Euros in a year, 0.3-0.5% of Russia's GDP or 7-11% of its military spending. We show that a cash transfer to EU citizens, with an equivalent fiscal burden as the tax cut, reduces these side effects to a fraction.

Following the oil-price surge in the wake of Russia's invasion of Ukraine, many countries in the EU are proposing to cut taxes on petrol and diesel. Using standard theory and empirical estimates, we assess how such tax cuts will influence the oil income in Russia. We find that a tax cut of 20 euro cents per liter would increase Russia's oil profits by around 11-17 million Euros per day in the short run and long run. This is equivalent to 4100-6300 million Euros in a year, 0.3-0.5% of Russia's GDP or 7-11% of its military spending. We show that a cash transfer to EU citizens, with an equivalent fiscal burden as the tax cut, reduces these side effects to a fraction.

Following Russia’s invasion of Ukraine, Western countries have looked for ways to limit Russia’s oil income. This paper considers, theoretically and quantitatively, two such options: 1) an export-quantity restriction and 2) a forced discount on Russian oil. We build a parsimonious quantifiable model of the global oil market and analyze how each of these policies affect: which Russian oil fields fall out of production; the global oil supply; and the global oil price. By these statics we derive the effects of the policies on Russian oil profits and oil-importers' surplus. The potential effects on Russian oil profits are massive. In the short run (within the first year), a quantity restriction of 20% yields Russian losses of 62 million USD per day, equivalent to 1.3% of GDP and 35% of military spending. In the long run (beyond a year) new investments become unprofitable and losses rise to 100 million USD/day, 2% of GDP and 56% of military spending. A price discount of 20% yields losses of 152 million USD per day, equivalent to 3.1% of GDP and 85% of military spending in the short run. In the long run, results are largely the same in terms of Russian profit losses, with the addition that investment in the oil sector will be harmed. A price discount puts generally more burden on Russia and less on importers compared to a quantity restriction. In fact, a price discount implies net gains for oil importers as it essentially redistributes oil rents from Russia to importers. If the restrictions are expected to last for long, the burden on oil importers decreases. Overall, both policies at all levels imply larger relative losses for Russia than for oil importers (in shares of their GDP). The case for a price discount on Russian oil is thus very strong, should oil importers want to escalate the economic warfare with Russia.

Following Russia’s invasion of Ukraine, Western countries have looked for ways to limit Russia’s oil income. This paper considers, theoretically and quantitatively, two such options: 1) an export-quantity restriction and 2) a forced discount on Russian oil. We build a parsimonious quantifiable model of the global oil market and analyze how each of these policies affect: which Russian oil fields fall out of production; the global oil supply; and the global oil price. By these statics we derive the effects of the policies on Russian oil profits and oil-importers' surplus. The potential effects on Russian oil profits are massive. In the short run (within the first year), a quantity restriction of 20% yields Russian losses of 62 million USD per day, equivalent to 1.3% of GDP and 35% of military spending. In the long run (beyond a year) new investments become unprofitable and losses rise to 100 million USD/day, 2% of GDP and 56% of military spending. A price discount of 20% yields losses of 152 million USD per day, equivalent to 3.1% of GDP and 85% of military spending in the short run. In the long run, results are largely the same in terms of Russian profit losses, with the addition that investment in the oil sector will be harmed. A price discount puts generally more burden on Russia and less on importers compared to a quantity restriction. In fact, a price discount implies net gains for oil importers as it essentially redistributes oil rents from Russia to importers. If the restrictions are expected to last for long, the burden on oil importers decreases. Overall, both policies at all levels imply larger relative losses for Russia than for oil importers (in shares of their GDP). The case for a price discount on Russian oil is thus very strong, should oil importers want to escalate the economic warfare with Russia.

Following Russia’s invasion of Ukraine, Western countries have looked for ways to limit Russia’s oil income. This paper considers, theoretically and quantitatively, two such options: 1) an export-quantity restriction and 2) a forced discount on Russian oil. We build a parsimonious quantifiable model of the global oil market and analyze how each of these policies affect: which Russian oil fields fall out of production; the global oil supply; and the global oil price. By these statics we derive the effects of the policies on Russian oil profits and oil-importers' surplus. The potential effects on Russian oil profits are massive. In the short run (within the first year), a quantity restriction of 20% yields Russian losses of 62 million USD per day, equivalent to 1.3% of GDP and 35% of military spending. In the long run (beyond a year) new investments become unprofitable and losses rise to 100 million USD/day, 2% of GDP and 56% of military spending. A price discount of 20% yields losses of 152 million USD per day, equivalent to 3.1% of GDP and 85% of military spending in the short run. In the long run, results are largely the same in terms of Russian profit losses, with the addition that investment in the oil sector will be harmed. A price discount puts generally more burden on Russia and less on importers compared to a quantity restriction. In fact, a price discount implies net gains for oil importers as it essentially redistributes oil rents from Russia to importers. If the restrictions are expected to last for long, the burden on oil importers decreases. Overall, both policies at all levels imply larger relative losses for Russia than for oil importers (in shares of their GDP). The case for a price discount on Russian oil is thus very strong, should oil importers want to escalate the economic warfare with Russia.

Following the oil-price surge in the wake of Russia's invasion of Ukraine, many countries in the EU are proposing to cut taxes on petrol and diesel. Using standard theory and empirical estimates, we assess how such tax cuts will influence the oil income in Russia. We find that a tax cut of 20 euro cents per liter would increase Russia's oil profits by around 11-17 million Euros per day in the short run and long run. This is equivalent to 4100-6300 million Euros in a year, 0.3-0.5% of Russia's GDP or 7-11% of its military spending. We show that a cash transfer to EU citizens, with an equivalent fiscal burden as the tax cut, reduces these side effects to a fraction.

Following Russia’s invasion of Ukraine, Western countries have looked for ways to limit Russia’s oil income. This paper considers, theoretically and quantitatively, two such options: 1) an export-quantity restriction and 2) a forced discount on Russian oil. We build a parsimonious quantifiable model of the global oil market and analyze how each of these policies affect: which Russian oil fields fall out of production; the global oil supply; and the global oil price. By these statics we derive the effects of the policies on Russian oil profits and oil-importers' surplus. The potential effects on Russian oil profits are massive. In the short run (within the first year), a quantity restriction of 20% yields Russian losses of 62 million USD per day, equivalent to 1.3% of GDP and 35% of military spending. In the long run (beyond a year) new investments become unprofitable and losses rise to 100 million USD/day, 2% of GDP and 56% of military spending. A price discount of 20% yields losses of 152 million USD per day, equivalent to 3.1% of GDP and 85% of military spending in the short run. In the long run, results are largely the same in terms of Russian profit losses, with the addition that investment in the oil sector will be harmed. A price discount puts generally more burden on Russia and less on importers compared to a quantity restriction. In fact, a price discount implies net gains for oil importers as it essentially redistributes oil rents from Russia to importers. If the restrictions are expected to last for long, the burden on oil importers decreases. Overall, both policies at all levels imply larger relative losses for Russia than for oil importers (in shares of their GDP). The case for a price discount on Russian oil is thus very strong, should oil importers want to escalate the economic warfare with Russia.

Following Russia’s invasion of Ukraine, Western countries have looked for ways to limit Russia’s oil income. This paper considers, theoretically and quantitatively, two such options: 1) an export-quantity restriction and 2) a forced discount on Russian oil. We build a parsimonious quantifiable model of the global oil market and analyze how each of these policies affect: which Russian oil fields fall out of production; the global oil supply; and the global oil price. By these statics we derive the effects of the policies on Russian oil profits and oil-importers' surplus. The potential effects on Russian oil profits are massive. In the short run (within the first year), a quantity restriction of 20% yields Russian losses of 62 million USD per day, equivalent to 1.3% of GDP and 35% of military spending. In the long run (beyond a year) new investments become unprofitable and losses rise to 100 million USD/day, 2% of GDP and 56% of military spending. A price discount of 20% yields losses of 152 million USD per day, equivalent to 3.1% of GDP and 85% of military spending in the short run. In the long run, results are largely the same in terms of Russian profit losses, with the addition that investment in the oil sector will be harmed. A price discount puts generally more burden on Russia and less on importers compared to a quantity restriction. In fact, a price discount implies net gains for oil importers as it essentially redistributes oil rents from Russia to importers. If the restrictions are expected to last for long, the burden on oil importers decreases. Overall, both policies at all levels imply larger relative losses for Russia than for oil importers (in shares of their GDP). The case for a price discount on Russian oil is thus very strong, should oil importers want to escalate the economic warfare with Russia.

Following the oil-price surge in the wake of Russia's invasion of Ukraine, many countries in the EU are proposing to cut taxes on petrol and diesel. Using standard theory and empirical estimates, we assess how such tax cuts will influence the oil income in Russia. We find that a tax cut of 20 euro cents per liter would increase Russia's oil profits by around 11-17 million Euros per day in the short run and long run. This is equivalent to 4100-6300 million Euros in a year, 0.3-0.5% of Russia's GDP or 7-11% of its military spending. We show that a cash transfer to EU citizens, with an equivalent fiscal burden as the tax cut, reduces these side effects to a fraction.

Following the oil-price surge in the wake of Russia's invasion of Ukraine, many countries in the EU are proposing to cut taxes on petrol and diesel. Using standard theory and empirical estimates, we assess how such tax cuts will influence the oil income in Russia. We find that a tax cut of 20 euro cents per liter would increase Russia's oil profits by around 11-17 million Euros per day in the short run and long run. This is equivalent to 4100-6300 million Euros in a year, 0.3-0.5% of Russia's GDP or 7-11% of its military spending. We show that a cash transfer to EU citizens, with an equivalent fiscal burden as the tax cut, reduces these side effects to a fraction.