Resources and Energy最新文献

This paper endogenizes environmental degradation imposed by agriculture in a land-use model by introducing feedbacks between productivity and the application of inputs. Farmers maximize the value of their output by allocating inputs between production and conservation. We study this division of agricultural production resources between cultivation and maintenance with a model of individual agricultural decisions in a small region, possibly the size of a single state or a few states in the United States. We study the model for insights into how degradationconservation processes modify agricultural production decisions. We give particular attention to how degradation-conservation processes would alter the extensive deforestation occurring in developing countries such as Brazil. The analysis of the model shows a mitigating influence of labor-intensive conservation measures to counteract local environmental degradation. The economic situation of the individual farmer is improved when output prices increase, roads are improved, or there is a decrease in the price of purchased inputs. Under these improved conditions, cultivation intensity increases and there is a resultant degradation in the soil, but the degradation is less than would occur without the conservation feedback. In the case of decreased wages, degradation may actually decrease if conservation effects are sensitive to an increase in labor. In all cases, the conservation feedback reduces the environmental impact of increased cultivation. Improving the economic picture for the individual farmer also makes remote sites more profitable and tends to increase the area of deforestation, but this tendency to expand is modified by the increased profitability of cultivation within the existing region. In a number of cases, very effective conservation can actually decrease areal extent of cultivation, leading to more intense cultivation over a smaller region. The analysis also indicates that cultivation should be discouraged on more fragile soils. On the better sites, soil degradation is increased but the soils can withstand more degradation. The total area under cultivation tends to decrease, resulting in less deforestation.

This paper examines the rate-of-return regulated firm's incentives in negotiations over cost recovery. It develops optimal recovery paths for the firm facing certainty versus uncertainty of discretionary regulatory policy. Front-loaded capital recovery is not generally optimal under certainty, which is contrary to Financial Accounting Standards Board (FASB) rules. However, with the consideration of regulatory uncertainty, the optimal recovery path is remarkably close to FASB-approved rules. The optimal recovery under certainty becomes time-consistent if the discretionary power of the regulators to alter a previously agreed upon plan is removed.

According to most scientists, greenhouse gas emissions must be reduced significantly relative to current trends to avoid dramatic adverse climatic changes during the next century. CO₂ is the most important greenhouse gas, so any international agreement will certainly cover CO₂ emissions. Any international agreement to reduce emissions of CO₂ is going to have a significant impact on the markets for fossil fuels. The analysis shows that it is not only the amount of CO₂ emissions permitted in an agreement which matters for fossil fuel prices, but also the type of agreement. Two obvious forms of agreements, which under certain assumptions both are cost efficient, are (a) tradeable emission permits, and (b) an international CO₂ tax. If the fossil fuel markets were perfectly competitive, these two types of agreements would have the same effect on the producer price of fossil fuels. However, fossil fuel markets are not completely competitive. It is shown that, under imperfect competition, direct regulation of the ‘tradeable quotas’ type tends to imply higher producer prices and a larger efficiency loss than an international CO₂ tax giving the same total CO₂ emissions. A numerical illustration of the oil market indicates that the difference in producer prices for the two types of CO₂ agreements is quite significant.

During the years 1950–1973, energy and capital were jointly substituted for labor, and real GNP per hour increased at 2.5% annually. Following the energy price shocks of 1973–1974 and 1979–1981, both capital utilization and energy per worker hour fell abruptly. Likewise, the growth in real GNP per hour declined to 1.2%. This paper specifies and estimates aggregate production functions designed to identify the roles of capital-labor substitution, energy-labor substitution, and technological change as sources of labor productivity growth. Declining energy intensity was an important partial cause of the slowdown in productivity growth.

This paper examines optimal pricing strategies by a resource seller when endogenously-determined investment by users in resource-specific technologies creates a ‘lagged’ resource demand structure. The analysis reveals that: (i) if the seller can credibly pre-commit to a resource price path at the initial date, the optimal path features ‘high’ prices at the outset, followed by ‘low’ prices over a subsequent interval and an ‘intermediate’ long-run price; (ii) a subgame-perfect equilibrium in feedback strategies features consistently ‘high’ prices and makes both seller and users worse off in the long run; but (iii) a subgame perfect equilibrium in trigger strategies can sustain the same outcome as the precommitment equilibrium.