Natural resource decline and recovery - Structural change and endogenous resource use regulation — Marie-Catherine Riekhof

Sprecherin

Marie-Catherine Riekhof (Kiel University (CAU))

Abstract

Many renewable resources have been used beyond sustainable levels. While some stocks have been subsequently recovered, others are still being over-exploited causing substantial economic losses. We focus on technological progress, structural change and costly regulation to explain the observed pattern and build a dynamic dual economy model of a local economy with a resource and a manufacturing sector. Our results show that technological progress can explain increasing over-harvesting but structural change alone is insufficient to explain resource recovery under relevant parameter assumptions. Including resource-user dependent regulatory costs in combination with structural change generates the observed pattern of subsequent recovery. Using data from global fisheries we determine the onset of resource regulation and recovery by detecting structural breaks in the time series. We then show that the onset of regulation is related to the declining number of fishers due to structural change. Our results suggest that overuse can be rational if regulatory costs are high. Reducing monitoring and enforcement costs can be instrumental for saving the global commons.

Autoren

Marie-Catherine Riekhof (University of Kiel) — Frederik Noack (University of British Columbia)

Raum

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