nep-ene New Economics Papers
on Energy Economics
Issue of 2005‒01‒23
three papers chosen by
Roger Fouquet
Imperial College, UK

  2. Specialization and Nonrenewable Resources: Ricardo Meets Ricardo By Ujjayant Chakravorty; Darrell Krulce; James Roumasset
  3. Coalition Strategies and Reduction of GHG Emissions By Vihang Patel

  1. By: Edgar L. Feige (University of Wisconsin-Madison); David M. Blau (University of Wisconsin-Madison)
    Abstract: This paper analyses the problem of natural resource scarcity and its implications for economic development and international cooperation. We examine the meaning and measurement of resource “scarcity” and its implications for economic growth and development. The paper describes the conditions required for the efficient use of exhaustible natural resources and for optimal inter-temporal efficient paths and considers the consequences of uncertainty, risk, externalities, disequilibria and institutional constraints on the market’s ability to achieve efficient resource utilization. Particular attention is paid to the implications of the cartelization of natural resource industries and the disturbing tendency to use political rather than economic motivations as the basis for resource production and distribution decisions. Reference: Resources and Development: Natural Resource Polices and Economic Development in an Interdependent World. P. Dorner and M.A.El- Shafie (eds), University of Wisconsin Press, 1980
    Keywords: Natural resource scarcity, cartels, OPEC, energy prices,economic development,non-renewable resources,efficiency
    JEL: Q3 Q4 L1 L41 D6 D8
    Date: 2005–01–19
  2. By: Ujjayant Chakravorty (Department of Economics, Emory University); Darrell Krulce (QUALLCOM, Inc., San Diego); James Roumasset (Department of Economics, University of Hawaii at Manoa)
    Abstract: The one-demand Hotelling model fails to explain the observed specialization of nonrenewable resources. We develop a model with multiple demands and resources to show that specialization of resources according to demand is driven by Ricardian comparative advantage while the order of resource use over time is determined by Ricardian absolute advantage. An abundant resource with absolute advantage in all demands must be initially employed in all demands. When each resource has an absolute advantage in some demand, no resource may be used exclusively. The two-by-two model is characterized. Resource and demand-specific taxes are shown to have significant substitution effects.
    Keywords: Dynamic comparative advantage, energy, non-renewable resources, multiple demands, Hotelling
    JEL: D9 Q3 Q4
    Date: 2004
  3. By: Vihang Patel (Indian Institute of Technology,Kharagpur)
    Abstract: The Flexible Mechanisms articulated in the Kyoto Protocol provide a robust framework for emission reduction issue in a manner that is not just economically efficient, but is also pro-growth for trade. In the presence of liquid or illiquid markets, to attain higher value from the emission trading, we have shown that coalition strategies provide a pertinent alternative to production optimization measures which may not be feasible at times. The whole game is analyzed taking a resource based view of the strategic factor markets. We have also illustrated the measures needed to provide stability to the coalitions and hence the coalition strategies.
    Keywords: coalition, strategy, game theory, emission, environment, resource based view, strategic factor market
    JEL: C7 D8
    Date: 2005–01–19

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