Lecture 5: Renewable Resources

Question 1

Stable Equilibria for Renewables

Answer 1

1. The Carrying capacity (s with line on top): The maximum level of stock which can be sustained by the environment
2. 0 if this wipes out the resource (local extinction) [ONLY in a modified model, so not just a normal one, will need a dip below 0 after]

Question 2

Carrying Capacity

Answer 2

(s with line on top): The maximum level of stock which can be sustained by the environment
- Without harvesting, stock will always end up at this amount. That’s why it’s a stable equilibria.
- It’s the RHS of the curve, at the end of the curve

Question 3

Unstable Equilibria for Renewable Resources

Answer 3

1. Minimum Viable Population (s with line below): Population decreases if it falls under s with line below. [in a modified model]
2. 0 if it’s a basic model with no dip below 0 after it moves to the RHS

Question 4

Yield of a Resource (Renewable)

Answer 4

Number of units produced by resource stock
= Growth if no harvesting

Question 5

Harvest of a resource (Renewables)

Answer 5

Number of units consumed by users of the resource. Determined by:
- Level of Effort €
- Stock of Resources (x)
H = E*X

Question 6

Maximum Sustainable Yield

Answer 6

The max quantity one can harvest indefinitely (top of the peak of the curve).

Question 7

Equation for Harvest

Answer 7

E*X
(E = level of effort; x = Stock of resource)
- Assumes linearity and a change in effort is the slope so change in effort will change harvest equilibrium.

Where this hits the renewable resource stock curve = equilbirium of harvest.

Question 8

Equilibirum for amount of a stock to harvest

Answer 8

Where the harvest curve (H=E*X) meets the renewable resource curve

If I harvest more than equilibrium then harvest >yield and the stock will decrease.

Question 9

Total Costs (TC) of a Renewable Resource

Answer 9

TC = W * E
(W = cost of effort per unit) (E = level of effort)

Question 10

Total Revenues (TR) of a Renewable Resource

Answer 10

TR = P * H
(H = level of harvest) (P = price of resource per unit)

Question 11

Total Social Cost of a Renewable Resource (TSC)

Answer 11

TSC = TEC + TC
(TEC = Total External Costs e.g. recreational value, preservation values, etc.)
(TC = Total Costs)

Question 12

Having property rights v. open access for a renewable resource

Answer 12

Property rights means higher rate of return because excessive effort is prevented, so profits are saved.
- Open access implies lower stock due to higher levels of effort associated w dissapation of profit.

Question 13

Overexploitation

Answer 13

A socially-negotiated phenomenon, not just biological. Can stop through

Question 14

Ways to prevent overexploitation of renewable resources

Answer 14

• Protected areas
• Raising costs of harvesting (can lead to loss of benefits though)
• Taxes (same as raising costs)
• Implementing property rights (just hard to enforce)
• Voluntary mechanisms
  But all hard to enforce

Question 15

Growth Formula for Renewables

Answer 15

Change in S/ Growth of S = Sr((k-s)/k)
where s = stock in time period now; r = intrinsic growth rate; k = carrying capacity
and also = s(t+1) - S(t)

Question 16

Growth Formula for Renewables with Harvesting

Answer 16

S(t+1) = S + change in S - Harvesting Level (H)
Basically growth formula minus the harvesting level