READINGSINTHEFIELDOFNATURALRESOURCE&ENVIRONMENTALECONOMICSAlexanderS.P.PfaffAssistantProfessorofEconomicsandInternationalAffairsSchoolofInternationalandPublicAffairs,DepartmentofEconomics,andCenterforEnvironmentalResearchandConservation,ColumbiaUniversityRobertN.StavinsAlbertPrattProfessorofBusinessandGovernmentJohnF.KennedySchoolofGovernment,HarvardUniversityandResourcesfortheFutureJune22,1999bbs.jjxj.orgPREFACEThisisthelatestversionofadocumentperiodicallyproducedsincetheearly1980's.Itcombinesanoutlineofthefieldofnaturalresourceandenvironmentaleconomicswithabibliographyof945references.Inthepast,thisreadinglisthasbeenusedinavarietyofways:asaguidetotheliteratureforgraduatestudentsindepartmentsofeconomicswhichdonotofferaPh.D.-levelsurveycourseofthefield;asaresourceforPh.D.studentswhowishtodevelopadirectedreadingscourseinthefield;andasanaidtostudentsatthemastersandundergraduatelevelswhowishtoexploreselectedareasingreaterdepth.Fortheirhelpinassemblingthisnewversionof“ReadingsintheFieldofNaturalResource&EnvironmentEconomics,”wethankthefollowingindividuals:AmyAndo,ScottBarrett,PeterBerck,RichardBishop,NancyBockstael,PeterBohm,LansBovenberg,TrudyCameron,JonConrad,J.R.DeShazo,MyrickFreeman,DonFullerton,LawrenceGoulder,GloriaHelfand,LarryKarp,NathanielKeohane,CatherineKling,CharlesKolstad,RichardKosobud,GilbertMetcalf,Juan-PabloMontero,IanParry,AndrewPlantinga,StephenSalant,JasonShogren,ArthurSmall,V.KerrySmith,StephenSwallow,MartinWeitzman,andPeterZapfel.Fortheirhelpwiththeprecedingversion,producedbyPorterHoaglandandRobertStavinsin1992,wethank:PeterBerck,RichardBishop,GlenBlomquist,JohnBraden,DavidBrookshire,GardnerBrown,IlanaCohen,ParzivalCopes,MaureenCropper,DonaldDewees,DianeDuPont,RoderickEggert,AnthonyFisher,MyrickFreeman,CharlesHowe,RandallKramer,JeffreyKrautkraemer,EricLichtenberg,RobertMendelsohn,RaymondMikesell,GordonMunro,PhilipNeher,GeorgeParsons,StevePolasky,GuilioPontecorvo,RobertPorter,AlanRandall,BruceRettig,StephenSalant,KathleenSegerson,JosephSeneca,V.KerrySmith,TomTietenberg,andDavidZilberman.Wewelcomesuggestionsofwaystoimprovethisdocument,includingadditionsandotherchangestotheoutlineandreadinglist.PleasesendyoursuggestionstoRobStavinsattheJohnF.KennedySchoolofGovernment,HarvardUniversity,79JohnF.KennedyStreet,Cambridge,Massachusetts02138;phone617-495-1820;fax617-496-3783;e-mail:robert_stavins@harvard.edu.AlexPfaffRobStavinsNewYork,NewYorkCambridge,Massachusettsbbs.jjxj.orgTABLEOFCONTENTSI.NATURALRESOURCEECONOMICS...................................................11A.TheoryofResourceUse..........................................................111.NonrenewableResources..................................................11a.Overview........................................................11b.Single-OwnerPrivateProduction(orPublicManagement).............11(1)Overview................................................11(2)TheHotellingRule........................................11(a)Theory...........................................11(b)EffectsofUncertainty..............................11(3)Backstops................................................12(4)DiscountRateEffects......................................12(5)StochasticTimeHorizons..................................12(6)IncreasingExtractionCosts................................12(7)RiskAversion............................................12(8)VariableTechnologicalCapabilities.........................12(9)Exploration..............................................12(10)MultipleDeposits.........................................12(11)MultipleUses/Users.......................................12(12)Recycling................................................13(13)Durables.................................................13(14)Multi-SectorEconomy.....................................13(15)ImperfectCompetition.....................................13(a)General..........................................13(b)Monopoly........................................13(c)Oligopoly.........................................132.RenewableResources.....................................................13a.Overview........................................................13(1)TheBasicModel..........................................13(a)General..........................................13(b)BasicForests.....................................14(c)BasicFisheries....................................14(2)OtherTheoreticalFormulations.............................14(3)EndogenousPrices........................................14(4)Uncertainty..............................................14b.PublicManagement(orSingle-OwnerPrivateProduction).............14(1)StockExternalities........................................15(2)IrreversibleInvestment....................................15(3)LimitedEntry............................................15(4)Contracting..............................................15(5)Enforcement.............................................15(6)Taxation.................................................