On natural resource substitution

Francisco J. André () and Emilio Cerdá

No E2004/48, Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces

Abstract: We present a simple dynamic model to get some key insights about the substitution of renewable for nonrenewable resources in production and the consequences for sustainability. We highlight the role of the elasticity of substitution (technological component) to determine the adjustment of every sector as a response to scarcity and growing ability of resources (environmental component). Sometimes, the model predicts a smooth substitution of renewable resources for nonrenewables, but this process could work in the opposite direction if renewable resources are temporarily beyond their maximum sustainable yield, so that their marginal natural growth is negative. If substitution possibilities are high enough, it may be optimal to suspend the extraction of a resource, for example, to allow for regeneration of the biomass. We show analytically that a production process is more likely to be sustainable the more heavily it depends on renewable, rather than nonrenewable resources.

Keywords: Renewable resources; Nonrenewable resources; Production; Optimal control. (search for similar items in EconPapers)
JEL-codes: Q20 Q30 (search for similar items in EconPapers)
Date: 2004
View list of references View citations in EconPapers

Downloads: (external link)
http://public.centrodeestudiosandaluces.es/pdfs/E200448.pdf (application/pdf)

Related works:
Journal Article: On natural resource substitution (2005)
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: http://EconPapers.repec.org/RePEc:cea:doctra:e2004_48

Access Statistics for this paper

More papers in Economic Working Papers at Centro de Estudios Andaluces from Centro de Estudios Andaluces
Address: c/ Bailén 50. 41001 Sevilla
Contact information at EDIRC.
Series data maintained by Teresa Rodríguez ().