Mises on sustainable development and conservation
23 Dec 2014 Leave a comment
in applied welfare economics, energy economics, resource economics Tags: do gooders, intergenerational justice, Ludwig von Mises, resource economics, sustainable development
History of crude oil prices 1861-2014
21 Dec 2014 Leave a comment
M.A. Adelman on the use of knowledge and resource exploration and conservation
08 Dec 2014 Leave a comment
The U.S. has built its first new oil refinery in 40 years
04 Dec 2014 Leave a comment
in economics of regulation, energy economics, environmental economics, resource economics Tags: green rent seeking, NIMBYs
M.A. Adelman on natural resource exhaustion
04 Dec 2014 1 Comment
in energy economics, entrepreneurship, environmental economics, resource economics Tags: entrepreneurship, M. A. Adelman, resource economics
M.A. Adelman on the use of knowledge in resource exploration and conservation
29 Nov 2014 Leave a comment
Sustainable resource management leads to the over-depletion of renewable resources
15 Oct 2014 Leave a comment
in fisheries economics, resource economics Tags: maximum economic yield, maximum sustainable yield
A common call among environmental movements is sustainable management. The the first thing I learnt in my honours course in natural resources economics is that sustainable management of a renewable resource leads to over-depletion of the renewable resource.
The example was given in regard to the economics of fisheries. Overfishing of fish stock from a sustainable development perspective results in a much larger harvest of fish than the maximum economic yield. The reason is simple. You don’t hunt down every last fish.
It is possible to keep catching fish and other biological resources well past the time it is profitable to do so without jeopardising the future of this stock or the forest.
Maximum sustainable yield or MSY is theoretically, the largest yield (or catch) that can be taken from a species’ stock over an indefinite period.
The diagram above this a very standard fisheries economics analysis dating from the 1950s. It compares the cost of fisheries effort with the revenue from the harvest.
The maximum economic profit is the usual system of comparing marginal revenue with marginal cost. After the point of maximum economic yield (MEY), any further fishing is simply unprofitable.
Sustainable management of the stock pays no regard to the cost of catching every last fish before you start depleting the biomass by not leaving enough spawning stock for the next season.
By not paying attention to the cost of catching fish, the sustainable management of fisheries catches too many fish, fish that is simply not profitable to catch in light of the effort needed in boats and days at sea to catch them.
Utopia, you are standing in it! 
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