Renewable Resource Economics

Abstract

Renewable natural resources are those capable of self-reproduction. In this chapter the primary concern is with fishery management, although the theory has been extended to other exploited animal and plant populations. The economic analysis of renewable resources differs from that of non-renewable resources in two ways. First, it is not concerned with the finite availability of the resource and the time when a resource industry ceases to exist: a renewable resource can remain productive indefinitely, although it may be driven to extinction if it is overexploited. Second, the issue of market structure and the potential for cartelisation is not a prominent feature of renewable resource literature: market power is prone to being competed away by the close sub-stitutability between one fish stock and another. Instead, the focus is upon the nature of the fishery production function and how fishing effort in the form of labour and capital interacts with the fish stock. The other central issue in fishery economics is the open-access nature of resource stocks and policy measures used to protect the resource from economic overexploitation.