A Review of the Economics of Biological Natural Resources

Abstract

The economics of renewable biological resources originated in the 1950s in fishery economics. The original models were static and linked simple population growth models to harvesting. In the 1970s the subject became more concerned with dynamic models and the stability of resource systems and this development continued in the 1980s. Now renewable resource economics is seen as a branch of capital theory which is distinct from mainstream capital theory because it must simultaneously represent the productivity of an ecosystem as well as the production functions of the firms which exploit it. Adding to this complex patterns of ownership over the resource itself and the dependence of production on the state of the ecosystem makes for a set of problems which economists have only started to address. Progress in renewable resource economics will come through closer collaboration with ecologists to give more realistic population models; the development of approaches for multi‐species ecosystems; and the use of modelling techniques and policies which can adapt as more information becomes available on the status of a resource. In the future renewable resource economics will continue to contribute to the sustainability debate by providing a clearer analysis of the trade‐off between ecosystem stability and the level of economic exploitation.

A Second-Best Analysis of Alternative Instruments for the Preservation of Natural Resources

“…The second term represents the (negative) influence of the revenue-recycling effect on optimal tax. The other terms in expression (12) represent the influence of the two tax-interaction effects (cost-side and benefit-side) on optimal taxation. Specifically, they show the positive contribution of labor supply decisions due to changes in final prices, benefits, natural resources and the negative contribution of changes in the demand for ecosystem services.…”

“…At first, economic models of natural resources were static in nature. For instance, White [12] contains a complete review of the economic studies on renewable biological resources in the literature. In the 1970s and 1980s, studies started to use dynamic models that mostly focus on the long-term capacity for regeneration and preservation.…”

A Dynamic Study on Ecological Disaster, Government Regulation, and Renewable Resources

“…Renewable resources are those that grow or recover gradually over time (White ). When the rate of resource extraction exceeds the rate of resource renewal, problems such as deforestation, overgrazing, and overfishing may occur.…”

“…Scholars have not yet reached a consensus on the classification of renewable resources. According to White (), renewable resources may include biological resources such as fishes, forests, and terrestrial mammals; energy resources such as firewood and hydropower; and environmental resources such as air and water quality (Becker, Murphy, and Topel ). In fact, some of these, such as fish, forests, and groundwater, have relatively fixed growth rates and can automatically grow or recover if these resources are consumed within a reasonable scope.…”

“…This model attains a new outcome in the research on renewable resources property and provides theoretic support to policy tools to manage renewable resources effectively. White () showed that capital theory with renewable resources is an independent branch from mainstream capital theory because it takes into account the ecological system productivity and production function at the same time.…”