Optimal Population and Exhaustible Resource Constraints

A large literature considers the optimal size and growth rate of the human population, trading off the utility value of additional people with the costs of a larger population. In this literature, an important parameter is the social weight placed on population size; a standard result is that a planner with a larger weight on population chooses larger population levels and growth rates. We demonstrate that this result is conditionally overturned when an exhaustible resource constraint is introduced: if the discount rate is small enough, the optimal population today decreases with the welfare weight on population size. That is, a more total-utilitarian social planner could prefer a smaller population today than a more average-utilitarian social planner. We also present a numerical illustration applied to the case of climate change, where we show that under plausible real-world parameter values, our result matters for the direction and magnitude of optimal population policy.

Are herbicides a once in a century method of weed control?

The efficacy of any pesticide is an exhaustible resource that can be depleted over time. For decades, the dominant paradigm - that weed mobility is low relative to insect pests and pathogens, that there is an ample stream of new weed control technologies in the commercial pipeline, and that technology suppliers have sufficient economic incentives and market power to delay resistance - supported a laissez faire approach to herbicide resistance management. Earlier market data bolstered the belief that private incentives and voluntary actions were sufficient to manage resistance. Yet, there has been a steady growth in resistant weeds, while no new commercial herbicide modes of action (MOAs) have been discovered in 30 years. Industry has introduced new herbicide tolerant crops to increase the applicability of older MOAs. Yet, many weed species are already resistant to these compounds. Recent trends suggest a paradigm shift whereby herbicide resistance may impose greater costs to farmers, the environment, and taxpayers than earlier believed. In developed countries, herbicides have been the dominant method of weed control for half a century. Over the next half-century, will widespread resistance to multiple MOAs render herbicides obsolete for many major cropping systems? We suggest it would be prudent to consider the implications of such a low-probability, but high-cost development. © 2017 Society of Chemical Industry.

Oil and the world economy: some possible futures

This paper, using a six-region dynamic stochastic general equilibrium model of the world economy, assesses the output and current account implications of permanent oil supply shocks hitting the world economy. For modest-sized shocks and conventional production technologies, the effects are modest. But for larger shocks, for elasticities of substitution that decline as oil usage is reduced to a minimum, and for production functions in which oil acts as a critical enabler of technologies, output growth could drop significantly. Also, oil prices could become so high that smooth adjustment, as assumed in the model, may become very difficult.