James Roumasset
Intergenerational Equity with Individual Impatience in an OLG Model of Optimal and Sustainable Growth
Among the ethical objections to intergenerational impartiality is the violation of consumer sovereignty given that individuals are impatient. We accommodate that concern by distinguishing intra- and inter-generational discounting in an OLG model suitable for analyzing sustainability issues. Under the assumption of constant elasticity of marginal felicity, the optimum trajectory of aggregate consumption is guided, via […]
Read MoreRonald Coase, 1910-2013
By Jim Roumasset Nobel Laureate Ronald Coase passed away unexpectedly on September 2. Despite his age, Professor Coase was planning a trip to China, following up on his 2012 book, How China Became Capitalist. Coase gave a great interview in 2009 about his contributions regarding the market, the firm, and property rights. He modestly dismisses […]
Read MoreA dynamic approach to PES pricing and finance of interlinked ecosystem services: Watershed conservation and groundwater management
A theory of payment for ecosystem services (PES) pricing consistent with dynamic efficiency and sustainable income requires optimized shadow prices. Since ecosystem services are generally interdependent, this requires joint optimization across multiple resource stocks. We develop such a theory in the context of watershed conservation and groundwater extraction.
Read MoreA dynamic approach to PES pricing and finance for interlinked ecosystem services: Watershed conservation and groundwater management
A theory of payment for ecosystem services (PES) pricing consistent with dynamic efficiency and sustainable income requires optimized shadow prices. Since ecosystem services are generally interdependent, this requires joint optimization across multiple resource stocks. We develop such a theory in the context of watershed conservation and groundwater extraction. The optimal program can be implemented with a decentralized system of ecosystem […]
Read MoreFinancing Watershed Conservation without Shrinking the Economy
In his recent State-of-the-State address, Governor Abercrombie urged lawmakers to consider either an increase in the conveyance tax on high-priced real estate transactions or a 10-cent fee for single-use plastic checkout bags to finance his watershed protection initiative, “The Rain Follows the Forest,” The proposed taxes, however, have a downside. While they are expected to […]
Read MoreFinancing Watershed Conservation
In November 2011, Governor Abercrombie and State officials launched a watershed protection plan entitled, “The Rain Follows the Forest”. The initiative’s goal is to double the current level of watershed protection – approximately 10% of priority watershed areas throughout Hawai‘i are currently protected – over the next ten years at an estimated cost of $11 million […]
Read MoreSpecies Invasion as Catastrophe: The Case of the Brown Tree Snake
This paper develops a two-stage model for the optimal management of a potential invasive species. The arrival of an invasive species is modeled as an irreversible event with an uncertain arrival time. The model is solved in two stages, beginning with the post-invasion stage. Once the arrival occurs, the optimal path of species removal is […]
Read MoreThe Economics of Groundwater
We provide synthesis of the economics of groundwater with a focus on optimal management and the Pearce equation for renewable resources. General management principles developed through the solution of a single aquifer optimization problem are extended to the management of multiple resources including additional groundwater aquifers, surface water, recycled wastewater, and upland watersheds. Given an abundant (albeit expensive) substitute, […]
Read MoreOrdering the extraction of renewable resources: The case of multiple aquifers
We provide conditions for optimal use of multiple sources of a renewable resource and characterize the resulting extraction sequence, resource scarcity values, and (single) efficiency price path for two groundwater aquifers and an abundant alternative resource. A numerical simulation for the South O‘ahu aquifer system, which also allows for different distribution costs, illustrates the case […]
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