The Regulated Use of a Renewable Resource: The Inefficiency of Factor Rationing and the Efficiency of Individual Tradable Quotas
Mahé, Louis-Pascal
The Regulated Use of a Renewable Resource: The Inefficiency of Factor Rationing and the Efficiency of Individual Tradable Quotas - 2001.
20
The use of renewable resources is often regulated factor rationing. The resulting inefficiency of this is studied using a cost function restricted to technology. The optimal solution calls for the deviation between marginal cost and catch price to be equal to the resource’s costate variable. The loss of income resulting from the restriction is estimated by comparing the optimal static solution with rationing. The case studied is scallops in the Saint-Brieuc bay. The resource can be used in an optimal and decentralised way by a system of Individual Tradeable Quotas (ITQs). The equilibrium price for the ITQs is the (associated) value of the total resource at optimum.
The Regulated Use of a Renewable Resource: The Inefficiency of Factor Rationing and the Efficiency of Individual Tradable Quotas - 2001.
20
The use of renewable resources is often regulated factor rationing. The resulting inefficiency of this is studied using a cost function restricted to technology. The optimal solution calls for the deviation between marginal cost and catch price to be equal to the resource’s costate variable. The loss of income resulting from the restriction is estimated by comparing the optimal static solution with rationing. The case studied is scallops in the Saint-Brieuc bay. The resource can be used in an optimal and decentralised way by a system of Individual Tradeable Quotas (ITQs). The equilibrium price for the ITQs is the (associated) value of the total resource at optimum.
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