Bài giảng MicroEconomics - Chapter 015 Natural Resource and Energy Economics

Chapter 15Natural Resource and Energy EconomicsMcGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter ObjectivesFalling birth ratesSources of energyRunning out of oil vs. running out of energyResource conservationProperty rights15-2Resource SuppliesWill the world run out of natural resources?World population 6.6 billionStandard of living 12 times higher than 1800Growing demand for natural resources15-3Population GrowthThomas Malthus 1798Living standards remain at subsistence levelPopulation continues to growHigher living standards have produced lower birth ratesReplacement rateTotal fertility rate15-4Total Fertility Rates 2007Country Total Fertility RateAustralia 1.76Canada 1.61China 1.75France 1.98Germany 1.40Hong Kong 0.98Italy 1.29Japan 1.23Russia 1.39South Korea 1.28Sweden 1.66United States 2.0915-5Population GrowthDemographers Population to peak at 9 billionHistorically:Death rates fall with modernizationPopulation explodesFertility rate eventually falls below replacement rateChildren as economic assets vs. liabilities15-6Resource ConsumptionCommodity demand rising the last 150 yearsPopulation growthRising consumption per personCommodity supply rising fasterDeclining real commodity pricesWill this trend continue?15-7Resource ConsumptionResource consumption per person leveled off in richest countriesWater useEnergy useTrash generatedResource demand will increase as more countries modernize15-8Energy EconomicsDealing with energy scarcityRising U.S. inflation adjusted GDP per 1 million BTU’sEnergy efficiency Will the world run out of energy?Run out of oil, or cheap energyAlternative sourcesExternalities 15-9Sources of EnergyU.S. electricity sources 2006Coal 49%Nuclear 19.4%Natural gas 20%Hydroelectric 7%Renewables 2.4%Petroleum 1.6%Other 0.6%15-10Alternative Energy SourcesEconomic viability of alternative fuelsOil price at which alternative becomes viableBiodiesel $80U.S. corn based ethanol $60Shale oil $50Tar sands, Brazilian ethanol $40Conventional oil $2015-11Natural Resource EconomicsPolicies for extracting resources to maximize net benefitsPresent vs. future consumptionPresent valueRenewable resourcesNonrenewable resources15-12Nonrenewable ResourcesOil, coal, and metalsExtraction strategy to maximize stream of profitsUser costSell today, cannot sell in the futureHigher expected demand encourages less extraction todayProperty rights 15-13Renewable ResourcesForests and wildlifeWell structured property rights encourage sustainable useOptimal forest harvesting30% of world land areaVariation in growth ratesDifferences in property rights15-14Renewable ResourcesOptimal fisheries managementFishery identified by location and speciesDifficult to establish property rightsOverfishing encouragedPolicies to limit catch sizeTotal allowable catchIndividual transferable quota15-15Economic Growth and the EnvironmentIs growth bad for the environment?Richer countries produce and consume moreRicher countries spend more to maintain the environmentEnvironmental Performance Index (EPI)Richer countries have higher scores15-16Key Termsreplacement ratetotal fertility ratedemographersBritish thermal unit (BTU)net benefitsrenewable natural resourcenonrenewable natural resourcepresent valueuser costextraction costconflict diamondsfisheryfishery collapsetotal allowable catch (TAC)individual transferable quota (ITQ)15-17Next Chapter Preview Public Goods, Externalities, and Information Asymmetries15-18