The simple analytics of developing resources from resources

Abstract: We show that the social desirability of a resource substitute systematically depends on the pattern of resources—either renewable (RR) or non-renewable (NRR)—involved in the resource substitute development program. Developing a RR in an NRR-based economy is particularly rewarding because the part of the NRR stock, which would be consumed in the absence of the RR substitute, provides funding for the development program. A RR-based economy is more demanding than a NRR-based one because (i) it feels richer since its consumption is not doomed to decline, and (ii) its sacrifice, in terms of foregone consumption during the investment phase, cannot be managed and reduced with the same flexibility as in a NRR-based economy, which is freer in shifting resource use across time. Thus the larger the willingness to smooth consumption, the greater is the investment in the NRR-based economy, the smaller in the RR-based one.

Keywords: NATURAL RESOURCES; RESOURCE SUBSTITUTION (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published in Resource and Energy Economics, 2005, 27 (1), pp.41-63. ⟨10.1016/j.reseneeco.2004.06.001⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: The simple analytics of developing resources from resources (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02670304

DOI: 10.1016/j.reseneeco.2004.06.001

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().