THE RENEWABLE RESOURCES
To invest on tomorrow’s welfare
Subjects of the lesson:
1. Exhaustibility and renovation
2. Make it sustainable
3. Yield maximum sustainability
4. The natural equilibrium
5. The maximum profit equilibrium
6. The equilibrium of free access
7. The private property
8. The inter temporal management of the
resources
The exhaustibility of a resource is a
point of view:
Many renewable resources are
potentially exhaustible if managed
with non – sustainable formality !
So it is better to speak of
(potentially) renewable, or reproducible
resources if you manage in opportune way
There is the ambiguity of the natural
resources in which renewable and
non-renewable elements coexist
for example
 The Soil
If a renewable resource is available in
quantity Q and produces on annual basis
an increase percentage equal to X
 For instance, a flock of fishes
whose consistence in absence of
fishing increases annually of
10% …
The percentage X represents The
SUSTAINABLE FACTOR
of the resource
If therefore the resource is exploited in
base of its sustainable factor, its
consistence remains uncharged in the
time
And as the society lived, the
‘interest’ generated from the natural
resource leaving the “capital intact“
The sustainable factor depends on the
consistence of the resource
To different values of Q it could
correspond to different ‘spontaneous’
percentage of increase in X ...
... According to the mechanisms
of reproduction,
of the environmental context, etc .
When Particularly the conscience of the
resource goes down under certain level ...
LEAST CRITICAL DIMENSION
... It becomes necessity not liable for
regeneration and with all probability, the
resource will end up to be distinguished
from others
Above the least critical matters, a
limited constancy of the resource
could favor rapid growth :
 We think of a small flock of fishes that has the
alimentary resources of a whole lake
Departing from LOW VALUES
(but not very low) of Q
THE FACTOR X
INCREASE MORE
Q INCREASE
THE FACTOR X GROWS LESS
AND LESS QUICKLY
The growth happens from the expenses
of external resources that are
available in limited quantity
 For instance, the plankton for a flock of
fishes or the areas for a flock of sheep
We reach a MAXIMUM SUSTAINABLE
FACTOR X*, corresponding to LEVEL Q*
over which ulterior increases of the
consistence of the stock leads to a
diminution of the resource GROWTH RATE
If Q continues to increase subsequently,
the factor arrives to zero in which the
resource exhausts the ability of
maintenance of the environment
The reached level of Q is called
natural equilibrium in which it is
determined in absence of
capture /extraction
More intense is the activity of
capture/extraction, it takes off more from
the natural equlibruim
and also
– for sustained extractive activity –
from the level of sustainable factor
If the state price of the resources is
constant, the curve of the factor can
be easily transformed in a curve of
profit of the level of extractive activity
The profit will be maximized in
correspondence of the
sustainable maximum factor
If the cost of every time of extractive
activity is constant, the total cost
increases linearly with the level of
activity
THEREFORE
The profit derived from extractive
activity will be equal to vertical
difference between curve of the profits
and curve of the cost
Generally, the level of activity that
maximizes the profit won’t be that
equal to the sustainable maximum
factor, in which this last don’t keep
track of costs !
The perfect level of activity
correspondence to an inferior level to
that of maximum factor and this
equal to the marginal profit of the
activity to the marginal cost.
If the positive attract others
economic operates, the level of
extraction will increase until the profit
is annulled, in correspondence to a
level of superior extraction to that of
maximum factor
This is
EQUILIBRIUM OF
FREE ACCESS
LOW COST OF EXTRACTION ACTIVITY
EQUILIBRIUM OF FREE
ACCESS NEXT
TO THE LEAST CRITICAL VERGE
An excessive collective exploitation
could lead to the total extinction
TRAGEDY OF THE FREE ACCESS
Every technology that lowers the
extraction of the resource related to the
equilibrium OF FREE ACCESS !
HOW TO AVOID THE EXCESSIVE
EXPLOITATION OF THE RESOURCE
RELATED TO THE EQUILIBRIUM OF FREE
ACCESS?
... Introduction
OWENERSHIP RIGHTS
that limits the number of operators that
they have the rights to to exploit the
resource
If the resource is given in management to
an only entreprise, this will choose the
level of activity that maximize the profit,
inferior to that of free access, with a
most efficient use
of the resource
Examples of efficient
collective management of
a resource also exist ...
The logic of a profit maximization will push
a moderate exploitation of the resource if
the owner will keep track of the possible
future profit derived from the fact ...
– If the extraction is delayed
and if the price of the
resource grows in the time –
... This can be sold tomorrow with a
great price than today besides
producing
ulterior
increases of the resource
This reasoning presupposes that the
owner is not too impatient, or he
doesn’t discount his future earnings
to a high rate
The resource will be drawn out and put on
the market when the profit becomes
superior to what would assure in a future
moment if the extraction were differed ...
... Also taking care for some
additional outputs that extraction
does