Reduced future forage production, diminished range condition, and reduced animal performance have been major factors considered when setting rangeland stocking rates. The relative economic importance of diminished current period animal performance versus intertemporal forage production impacts was investigated using a dynamic optimal control model. The model is applied to yearling stocker production in eastern Colorado. Results indicate that intertemporal grazing impacts to forage production are not that important; reduced weight gain during the current period drives the economic stocking rate decision. Further, ranchers have no economic incentive as profit maximizers to continually overgraze the range.

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ABSTRACT. In this paper we discuss the role of the costate variable (shadow value) for the resource stock in both nonrenewable and renewable resource problems. We separate the information in this variable into a scarcity and a cost effect. The scarcity effect is the portion of the shadow value that is due just to the scarcity of the resource relative to its demand, while the cost effect is a measure of the impact of the marginal unit upon future extraction costs. It is shown that in the nonrenewable resource, mining, problem both can exist simultaneously, but in the renewable resource, fisheries, model the two effects are mutually exclusive. In our analysis of the fisheries model we develop an expression for the time path of the marginal unit of fish stock. We do this using the theorem of Continuous Dependence on Initial Conditions. This result is then used to generate the conclusion that g(x) is the biological own rate of interest, where g(x) is the growth function for the resource stock, x.

We developed a dynamic integrated modeling approach to identify the effect of global warming on the global timber market. The Timber Supply Model 2000, BlOME 3, and Hamburg were used as a suitable economic and ecological model. The TSM 2000 was adopted to model dynamic economic behavior in the global timber market. BlOME 3 was utilized as our steady state ecological model, and Hamburg as our general circulation model. The TSM 200 was developed to consider more important up-to-date components in the global timber market. We estimated dynamic ecological change based on the simulation results of BlOME 3 using Hamburg and the linearality assumptions about change in climate and ecosystem. With the estimates of dynamic ecological change, we modified the TSM 2000 to reflect the dynamic ecological change caused by climate change. After simulating the nonclimate base scenario and the climate change scenario of the TSM 2000, we identified that global warming has a positive effect on the global timber market through an increase of timber productions causing stumpage prices to be lower than they otherwise would have been. In the welfare sense, we also examined that global warming is economically beneficial to society through the global timber market. For sensitivity analyses, we performed these simulation procedures under three different timber demand growth scenarios.