Spatial renewable resource extraction under possible regime shift

Christopher Costello, Bruno Nkuiya () and Nicolas Querou
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Christopher Costello: Bren School of Environmental Science & Management - UC Santa Barbara - University of California [Santa Barbara] - UC - University of California

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Abstract: How will countries harvesting mobile natural resources react to the possibility of regime shift? We address the non-cooperative exploitation of a migratory renewable resource in the presence of possible regime shift that affects its movement. Motivated by the anticipated effects of climate change, we model a regime shift that will alter the spatial movement patterns of the resource at some point in the future. We develop a stochastic spatial bioeconomic model to address the effects of this class of regime shift on non-cooperative harvest decisions made by decentralized owners such as countries exploiting a migratory fish or other natural resource stock. We find that the threat of a future shift modies the standard golden rule and may induce more aggressive harvest everywhere, irrespective of whether the owner will be advantaged or disadvantaged by the shift. We also identify conditions under which the threat of regime shift induces owners to reduce harvest rates in advance of the shift. Our analysis suggests that different property rights structures (single ownership vs common property) or heterogeneous growth can give rise to previously unexplored incentives and can even reverse conventional wisdom about how countries will react to the prospect of future environmental change

Keywords: property rights; renewable resources; spatial management; regime shift (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-env and nep-res
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Published in American Journal of Agricultural Economics, 2019, 101 (2), pp.507-527. ⟨10.1093/ajae/aay076/5185151⟩

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Related works:
Journal Article: Spatial Renewable Resource Extraction under Possible Regime Shift (2019)
Working Paper: Spatial renewable resource extraction under possible regime shift (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01952491

DOI: 10.1093/ajae/aay076/5185151

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