Ordering the Extraction of Polluting Nonrenewable Resources

S-Tier
Journal: American Economic Review
Year: 2008
Volume: 98
Issue: 3
Pages: 1128-44

Authors (3)

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A well-known theorem by Herfindahl states that the low-cost nonrenewable resource must be exploited first. Consider resources that are differentiated only by their pollution content. For instance, both coal and natural gas are used to generate electricity, yet coal is more polluting. We show that the ordering of extraction need not be driven by whether a resource is clean or dirty. Coal may be used first, followed by natural gas, and again by coal. Such "vacillation" does not occur under cost heterogeneity. A perverse policy implication is that regulating pollution may accelerate use of the polluting resource.

Technical Details

RePEc Handle
repec:aea:aecrev:v:98:y:2008:i:3:p:1128-44
Journal Field
General
Author Count
3
Added to Database
2026-01-25