James Roumasset
Ecological Economics and the Circular Economy December 8, 2023 By Kimberly Burnett, James Roumasset, and Christopher Wada The Circular Economy In 1969, Belgian industrial designers Paul Jorion and Jacques Braijt proposed the circular concept of manufacturing products from recycled materials as opposed to the “linear” concept of producing them from mined or harvested raw materials and discarding the corresponding waste (short history here). The… Read More
The Nature, Causes, and Consequences of Student Deselection and Criminalization October 9, 2023 By Katherine Irwin and James Roumasset1 A central principle of public economics is that the government should correct market failures. For example, when a firm’s pollution imposes social cost on society—an externality—the market fails to provide an efficient allocation of resources. The externality can be corrected by forcing the firm to pay for the cost… Read More
Solving Optimal Groundwater Problems with Excel August 16, 2023 Abstract: Welfare maximizing management of coastal groundwater requires a sequence of pumping targets, typically terminating with a constant withdrawal rate in the long run. In contrast, managing according to sustainable yield at best identifies the constant rate of pumping in the long run. We illustrate an accessible solution method, using Excel Solver to find the… Read More
Energy Economics: Lessons for and from the Philippines August 30, 2021 By Jim Roumasset This is to share some recent energy research from the Philippines. Some of the findings have relevance for other small economies such as Hawaii. Green GDP and environmental taxationMany governments, including those in the Philippines and the U.S. declare that their mission is to promote the general welfare. It is well known… Read More
Do Natural Disasters Make Sustainable Growth Impossible? January 6, 2020 We consider the prospects for sustainable growth using expected utility models of optimal investment under threat from natural disasters. Adoption of a continuous time, stochastic Ramsey growth model over an infinite time horizon permits the analysis of sustainability under uncertainty regarding adverse events, including both one-time and recurrent disasters. As appropriate to small economies, we… Read More
The role of power prices in structural transformation: Evidence from the Philippines April 1, 2019 The Philippines provides an extreme example of Rodrik’s observation that late developing countries experience deindustrialization at lower levels of per capita income than more advanced economies. Previous studies point to the role of protectionist policies, financial crises, and currency overvaluation as explanations for the shrinking share of the industry sector. We complement this literature by… Read More The Role of Electricity prices in Structural Transformation: Evidence from the Philippines February 1, 2019 The Philippines provides an extreme example of Rodrik’s observation that late developing countries experience deindustrialization at lower levels of per capita income than more advanced economies. Previous studies point to the role of protectionist policies, financial crises, and currency overvaluation as explanations for the shrinking share of the industry sector. We complement this literature by… Read More
Filipino 2040: Environmental Resources, Shocks, and National Well-Being April 12, 2016 The contribution of the environmental-resource sector to national well-being is the sum of natural resource depletion and environmental degradation. Inasmuch as existing resource stocks are below efficient levels, better enforcement of existing laws as well as policies that incentivize sustainable use are needed. Similarly, progressive royalty assessment of mineral resources can incentivize exploration without transferring… Read More
Payments for Watershed Services as Adaptation to Climate Change: Upstream Conservation and Downstream Aquifer Management January 1, 2015 Economically optimal groundwater extraction allocates water over space and time to its highest and best social use. But optimal management of water resources also requires optimal investment in watershed capital, even as the climate is changing. We augment a standard coastal groundwater management model with stock-dependent extraction costs to include recharge-enhancing natural and produced capital… Read More
Energy, Backstop Endogeneity, and the Optimal Use of Groundwater October 1, 2014 To meet the growing demand for freshwater, many regions have increased groundwater pumping in recent years, resulting in declining groundwater levels worldwide. A promising development to address these declines is technical change regarding groundwater substitutes such as desalination and wastewater recycling. However, because these technologies are energy intensive, optimal implementation also depends on future energy… Read MoreIncentivizing interdependent resource management: watersheds, groundwater, and coastal ecology June 9, 2014 Managing water resources independently may result in substantial economic losses when those resources are interdependent with each other and with other environmental resources. We first develop general principles for using resources with spillovers, including corrective taxes (subsidies) for incentivizing private resource users. We then analyze specific cases of managing water resources, in particular the interaction… Read More
Groundwater Economics without Equations June 6, 2014 In many parts of the world, irrigation and groundwater consumption are largely dependent on groundwater. Minimizing the adverse effects of water scarcity requires optimal as well as sustainable groundwater management. A common recommendation is to limit groundwater extraction to maximum sustainable yield (MSY). Although the optimal welfare-maximizing path of groundwater extraction converges to MSY in… Read More
Optimal Joint Management of Interdependent Resources: Groundwater vs. Kiawe (Prosopis pallida) June 4, 2014 Local and global changes continue to influence interactions between groundwater and terrestrial ecosystems. Changes in precipitation, surface water, and land cover can affect the water balance of a given watershed, and thus affect both the quantity and quality of freshwater entering the ground. Groundwater management frameworks often abstract from such interactions. However, in some cases,… Read More
The Good, Bad, and Ugly of Watershed Management June 4, 2014 Efficient management of groundwater resource systems requires careful consideration of relationships — both positive and negative — with the surrounding environment. The removal of and protection against “bad” and "ugly" natural capital such as invasive plants and feral animals and the enhancement of “good” capital (e.g. protective fencing) are often viewed as distinct management problems.… Read More
Intergenerational equity with individual impatience in a model of optimal and sustainable growth May 1, 2014 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 overlapping generations model suitable for analyzing sustainability issues. Working Paper Access Publication Read More