[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/p/crj/dpaper/3_2016.html
   My bibliography  Save this paper

Order of resource extraction and factor intensity

Author

Listed:
  • Giuseppe Freni
Abstract
This paper characterizes the optimal time paths of extraction of several nonrenewable resource deposits with different costs of extraction when the extracted resource can be converted into productive capital and the extraction process, as well as the production of the substitute, requires two primary factors of production. Under a technological assumption granting that the time paths of primary factor prices are monotonic, we show that, for each pair (lower cost/higher cost) of deposits, an intensity condition is necessary in order to have discontinuous extraction of the lower cost deposit. We also show that the same condition is sufficient for discontinuous extraction of the lower cost deposit, provided the stock of the lower cost deposit is sufficiently large and the stocks of all other deposits are sufficiently small.

Suggested Citation

  • Giuseppe Freni, 2016. "Order of resource extraction and factor intensity," Discussion Papers 3_2016, CRISEI, University of Naples "Parthenope", Italy.
    • Handle: RePEc:crj:dpaper:3_2016
    as

    Download full text from publisher

    File URL: http://www.crisei.uniparthenope.it/wp/materiale/crisei_dp_3_2016.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lewis, Tracy R, 1982. "Sufficient Conditions for Extracting Least Cost Resource First," Econometrica, Econometric Society, vol. 50(4), pages 1081-1083, July.
    2. Im, Eric Iksoon & Chakravorty, Ujjayant & Roumasset, James, 2006. "Discontinuous extraction of a nonrenewable resource," Economics Letters, Elsevier, vol. 90(1), pages 6-11, January.
    3. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    4. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, vol. 98(3), pages 1128-1144, June.
    5. Freni, Giuseppe & Gozzi, Fausto & Pignotti, Cristina, 2008. "Optimal strategies in linear multisector models: Value function and optimality conditions," Journal of Mathematical Economics, Elsevier, vol. 44(1), pages 55-86, January.
    6. Kemp, Murray C & Long, Ngo Van, 1980. "On Two Folk Theorems Concerning the Extraction of Exhaustible Resources," Econometrica, Econometric Society, vol. 48(3), pages 663-673, April.
    7. Favard, Pascal, 2002. "Does productive capital affect the order of resource exploitation?," Journal of Economic Dynamics and Control, Elsevier, vol. 26(6), pages 911-918, June.
    8. Amigues, Jean-Pierre & Favard, Pascal & Gaudet, Gerard & Moreaux, Michel, 1998. "On the Optimal Order of Natural Resource Use When the Capacity of the Inexhaustible Substitute Is Limited," Journal of Economic Theory, Elsevier, vol. 80(1), pages 153-170, May.
    9. Holland, Stephen P., 2003. "Extraction capacity and the optimal order of extraction," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 569-588, May.
    10. Larry E. Jones & Rodolfo Manuelli, 1990. "A Convex Model of Equilibrium Growth," NBER Working Papers 3241, National Bureau of Economic Research, Inc.
    11. Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-1038, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Freni, Giuseppe, 2009. "Factor intensity and order of resource extraction," MPRA Paper 18790, University Library of Munich, Germany.
    2. Lafforgue, Gilles & Magné, Bertrand & Moreaux, Michel, 2008. "Energy substitutions, climate change and carbon sinks," Ecological Economics, Elsevier, vol. 67(4), pages 589-597, November.
    3. Gaudet, Gerard & Moreaux, Michel & Withagen, Cees, 2006. "The Alberta dilemma: Optimal sharing of a water resource by an agricultural and an oil sector," Journal of Environmental Economics and Management, Elsevier, vol. 52(2), pages 548-566, September.
    4. Meier, Felix D. & Quaas, Martin F., 2021. "Booming gas – A theory of endogenous technological change in resource extraction," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    5. Oskar Lecuyer & Adrien Vogt-Schilb, 2013. "Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital," CIRED Working Papers hal-00850680, HAL.
    6. Renaud Coulomb & Oskar Lecuyer & Adrien Vogt-Schilb, 2019. "Optimal Transition from Coal to Gas and Renewable Power Under Capacity Constraints and Adjustment Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 557-590, June.
    7. Moreaux, Michel & Ricci, Francesco, 2005. "The simple analytics of developing resources from resources," Resource and Energy Economics, Elsevier, vol. 27(1), pages 41-63, January.
    8. Di Maria, Corrado & Smulders, Sjak & van der Werf, Edwin, 2008. "Absolute Abundance and Relative Scarcity: Announced Policy, Resource Extraction, and Carbon Emissions," Climate Change Modelling and Policy Working Papers 46626, Fondazione Eni Enrico Mattei (FEEM).
    9. Luise Röpke, 2015. "Essays on the Integration of New Energy Sources into Existing Energy Systems," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 58.
    10. Halvor B. Storrøsten, 2020. "Emission Regulation of Markets with Sluggish Supply Structures," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(1), pages 1-33, September.
    11. Marc Gronwald & Ngo Van Long & Luise Röpke, 2013. "Simultaneous Supplies of Dirty and Green Fuels with Capacity Constraint: Is there a Green Paradox?," CESifo Working Paper Series 4360, CESifo.
    12. Marc Gronwald & Ngo Long & Luise Roepke, 2017. "Simultaneous Supplies of Dirty Energy and Capacity Constrained Clean Energy: Is There a Green Paradox?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(1), pages 47-64, September.
    13. Gérard Gaudet & Stephen W. Salant, 2018. "Modeling Nonrenewable Resources Use with Multiple Demands and Multiple Sources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(4), pages 737-755, August.
    14. van de Klundert, T.C.M.J. & Smulders, J.A., 1991. "Reconstructing growth theory : A survey," Other publications TiSEM 19355c51-17eb-4d5d-aa66-b, Tilburg University, School of Economics and Management.
    15. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1996. "The Poverty of Nations: A Quantitative Exploration," NBER Working Papers 5414, National Bureau of Economic Research, Inc.
    16. Posch, Olaf, 2009. "Structural estimation of jump-diffusion processes in macroeconomics," Journal of Econometrics, Elsevier, vol. 153(2), pages 196-210, December.
    17. Wilson, E.J. & Chaudhri, D.P., 2000. "Endogeneity, Knowledge and Dynamics of Long Run Capitalist Economic Growth," Economics Working Papers wp00-03, School of Economics, University of Wollongong, NSW, Australia.
    18. Alfò, Marco & Carbonari, Lorenzo & Trovato, Giovanni, 2023. "On the effects of taxation on growth: an empirical assessment," Macroeconomic Dynamics, Cambridge University Press, vol. 27(5), pages 1289-1318, July.
    19. Im, Eric Iksoon & Chakravorty, Ujjayant & Roumasset, James, 2006. "Discontinuous extraction of a nonrenewable resource," Economics Letters, Elsevier, vol. 90(1), pages 6-11, January.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:crj:dpaper:3_2016. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Margherita Gallo (email available below). General contact details of provider: https://edirc.repec.org/data/crnavit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.