This project is designed to calculate the 'optimal' intertemporal allocation of specific non-renewable resources (oil, gas and platinum), according to various theories of optimal use. Theories to be examined include variations of the Hotelling rule, the Hartwick rule, rules based on notions of weak and strong sustainability and others. It will also estimate the expected rate of exploitation for the same resources on various business as usual scenarios, to the year 2100. By comparing the two, it will be possible to see when policy intervention is needed to attain the 'optimal' rate of use.
The project will then evaluate different instruments for closing the gap between the expected and desired rates of exploitation. These will include policies such as targets reached under international agreements, tradeable permit schemes, national and international taxes, and recycling schemes of different kinds. The final stage of the project will prepare a set of recommendations on which policies can be effectively used to achieve the desired goals of optimal resource use, and what difficulties are likely to be encountered in implementing these policies.
The project will bring together existing databases on resources and their costs of extraction, working within an approach that is an extension of the McKelvey diagram, in which the concept of dynamic technology change is explicitly introduced. A detailed integrated database of the resources will therefore be one of the outputs of the project. The project will also provide useful guidance on how to make different concepts of sustainability operational.
Funding SchemeCSC - Cost-sharing contracts