Pareto Optimality in the Extraction of Fossil Fuels and the Greenhouse Effect: A Note

Hans-Werner Sinn

No 13453, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This note generalizes the Solow-Stiglitz efficiency condition for natural resources to the problem of fossil fuel extraction with a greenhouse effect. The generalized optimality condition suggests that the greenhouse effect implies overextraction in the sense of leaving future generations a wrongly composed wealth portfolio with too few natural resources relative to man-made capital. This judgment is independent of society's ethical preferences concerning the well-being of future generations.

JEL-codes: O13 Q32 Q54 (search for similar items in EconPapers)
Date: 2007-09
New Economics Papers: this item is included in nep-ene and nep-env
Note: EEE PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.nber.org/papers/w13453.pdf (application/pdf)

Related works:
Working Paper: Pareto Optimality in the Extraction of Fossil Fuels and the Greenhouse Effect: A Note (2007)
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:nbr:nberwo:13453

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w13453

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().