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Spatial Renewable Resource Extraction under Possible Regime Shift
Author(s) -
Costello Christopher,
Nkuiya Bruno,
Quérou Nicolas
Publication year - 2019
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aay076
Subject(s) - regime shift , paradigm shift , natural resource , incentive , natural resource economics , resource (disambiguation) , renewable resource , stock (firearms) , common pool resource , climate change , regime change , renewable energy , economics , geography , democracy , ecology , ecosystem , microeconomics , computer science , political science , computer network , philosophy , archaeology , epistemology , politics , law , biology
How will countries harvesting mobile natural resources react to the possibility of regime shift? We address the non‐cooperative exploitation of a migratory renewable resource in the presence of possible regime shift that affects its movement. Motivated by the anticipated effects of climate change, we model a regime shift that will alter the spatial movement patterns of the resource at some point in the future. We develop a stochastic spatial bioeconomic model to address the effects of this class of regime shift on non‐cooperative harvest decisions made by decentralized owners such as countries exploiting a migratory fish or other natural resource stock. We find that the threat of a future shift modifies the standard “golden rule”, and may induce more aggressive harvest everywhere, irrespective of whether the owner will be advantaged or disadvantaged by the shift. We also identify conditions under which the threat of regime shift induces owners to reduce harvest rates in advance of the shift. Our analysis suggests that different property rights structures (single ownership vs common property) or heterogeneous growth can give rise to previously unexplored incentives and can even reverse conventional wisdom about how countries will react to the prospect of future environmental change.