Dynamical ecologic taxes

Abstract

The free access use of interrelated renewable resources creates a mis-allocation of use between stocks (species) as well as over time. This paper develops a taxation system that treats the multi-dimensional spectrum of such a system, including dynamic, economic, and ecologic factors. The policy places a demand on the free access users to account for the externalities of their activities, thus forcing them to follow the optimal mode. In theory three methods may be equivalent (under certain assumptions) in terms of ecologic-economic efficiency: per landing royalties, per effort tax and allocated catch quotas. In practice they require different data sets and distribution procedures. This paper models per landing royalties and a transformation into either of the two other methods is feasible. The tax is exemplified over a system of two ecologically competitive species presented by the Gauss model and the tax can be adjusted to other advanced or specific versions. Other empirical and theoretical policies do not treat one or more aspects, in particular the ecological element, of this problem.