On the Optimal Taxation of Common-Pool Resources
Recent research developments in common-pool resource models emphasize the importance of links with ecological systems and the presence of non-linearities, thresholds and multiple steady states. In a recent paper Kossioris et al. (2008) develop a methodology for deriving feedback Nash equilibria for non-linear di�¤erential games and apply this methodology to a common-pool resource model of a lake where pollution corresponds to bene��ts and at the same time a�¤ects the ecosystem services. This paper studies the structure of optimal state- dependent taxes that steer the combined economic-ecological system towards the trajectory of optimal management, and provides an algo- rithm for calculating such taxes.
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