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A sustainable management of renewable resource with a quota market

Luc Doyen () and Jean-Christophe Pereau

No 10, Computing in Economics and Finance 2006 from Society for Computational Economics

Abstract: This paper deals with the sustainable management of a renewable resource based on individual and transferable quotas (ITQs). The aim of that paper is to determine the conditions under which a regulating agency can achieve both ecological and economic objectives when agents are heterogenous and non-compliant. To achieve this, a controlled dynamic bio-economic model is built with catches derived from a myopic optimization process of every agents. The coordination of agents occurs through the quota market. The performance of the quota policy is evaluated with respect to the satisfaction at each time and for every agents of a constraint of guaranteed harvesting. We show how this constraint induces intergenerational and intragenerational equity along with conservation of the stock. The viability kernel provides the analytical tool to handle such a sustainability problem. Thus indicators of maximal guaranteed catches together with mininal biomass are displayed. Specific total allowable catch (TAC) policies are analyzed, including conservative, greedy, sustainable yield and maximin strategies. Simulations illustrate the general results

Keywords: Viability; bio-economics; renewable resource; quota market (search for similar items in EconPapers)
JEL-codes: Q20 Q22 Q28 (search for similar items in EconPapers)
Date: 2006-07-04
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