In this paper, we attempt to quantify the shadow price of an additional inch of groundwater resource left in situ for the Southern Ogallala Aquifer. Previous authors have shown the degree to which the optimal resource...In this paper, we attempt to quantify the shadow price of an additional inch of groundwater resource left in situ for the Southern Ogallala Aquifer. Previous authors have shown the degree to which the optimal resource extraction path may diverge from the competitive extraction path based upon varying assumptions. We utilize high-quality data over an unconfined groundwater resource to evaluate the validity of these results. We find that the size of the existing groundwater resource is sufficiently small to result in a divergence between the competitive and socially optimal solutions. We are also able to confirm that the model responds to changes in the parameters in a manner consistent with previous research. Finally, we arrive at a marginal user cost for an additional acre-inch of water which is relatively low, but reasonable given uncertainty about future technological improvements.展开更多
The Ramsey rule is regarded as a convenient vehicle for estimating the social discount rate in general. Carbon pricing is treated as another theory of environmental economics. This study clarifies the theoretical rela...The Ramsey rule is regarded as a convenient vehicle for estimating the social discount rate in general. Carbon pricing is treated as another theory of environmental economics. This study clarifies the theoretical relationship between the Ramsey rule and optimal carbon price, which has been overlooked in the existing research. It succeeds in deriving the optimal carbon price from the modified Ramsey rule in stationary state. Since the Ramsey rule decides the dynamics of an economy and a stationary state is its destination, by using the optimization condition of individual who are assumed to live infinitesimally short life, we can solve the optimal carbon price at stationary state.展开更多
文摘In this paper, we attempt to quantify the shadow price of an additional inch of groundwater resource left in situ for the Southern Ogallala Aquifer. Previous authors have shown the degree to which the optimal resource extraction path may diverge from the competitive extraction path based upon varying assumptions. We utilize high-quality data over an unconfined groundwater resource to evaluate the validity of these results. We find that the size of the existing groundwater resource is sufficiently small to result in a divergence between the competitive and socially optimal solutions. We are also able to confirm that the model responds to changes in the parameters in a manner consistent with previous research. Finally, we arrive at a marginal user cost for an additional acre-inch of water which is relatively low, but reasonable given uncertainty about future technological improvements.
文摘The Ramsey rule is regarded as a convenient vehicle for estimating the social discount rate in general. Carbon pricing is treated as another theory of environmental economics. This study clarifies the theoretical relationship between the Ramsey rule and optimal carbon price, which has been overlooked in the existing research. It succeeds in deriving the optimal carbon price from the modified Ramsey rule in stationary state. Since the Ramsey rule decides the dynamics of an economy and a stationary state is its destination, by using the optimization condition of individual who are assumed to live infinitesimally short life, we can solve the optimal carbon price at stationary state.
