| Abstract: |
This paper sets up a two-period, two-sector trade model of a developing
country which is abundant in a natural resource but scarce in industrial
goods. It shows that lower future travel costs, rising demand for tourism and
higher preferences for the environment slow down today’s depletion of the
non-renewable natural resource that can be used for consumption or for
exporting tourism services. The benefits that accrue from sustainable resource
use can be distributed over time such that the myopic developing country and
forward-looking industrialized countries, which demand tourism services, are
better off. |