The Kyoto Protocol aims to stabilize the concentration of carbon in the atmosphere, which is mainly caused by the burning of nonrenewable resources such as coal in power generation. We ask how a ceiling on the stock of emissions may a.ect the textbook Hotelling model. We show that when the...

Global warming is primarily caused by carbon produced by the burning of fossil fuels, especially coal. However, nuclear power is carbon free. We develop a dynamic model of the world energy economy that includes fossil fuels and nuclear power. If global warming is to be controlled, nuclear power...

This paper examines the optimal extraction sequence of nonrenewable resources in the presence of multiple demands. We provide conditions under which extraction of a nonrenewable resource may be discontinuous over the course of its depletion.

The one demand Hotelling model fails to explain the observed specialization of nonrenewable resources in specific end-uses. We develop a model with multiple demands and multiple resources and grades. Principles of Ricardian absolute and comparative advantage play an important role in determining...

The U.S. Clean Air Act allows individual states to implement their own clean fuel programs to address local or regional air quality concerns. These regulations have led to a proliferation of fuel blends known as "boutique fuels." For each of the three grades of gasoline, more than 15 types of...

Casual empirical evidence suggests that infrastructure provision is higher in economies that are open to world trade. We develop a model of imperfect competition to show that governments are likely to provide more infrastructure when the country is open to trade. Infrastructure provision is...

Billions of dollars will be spent globally to upgrade water infrastructure in the coming years. The standard economic prescription is privatization and the introduction of water markets. A major lesson from the recent privatization debacle in electricity is that prescriptions for reform must...

The analysis of climate change mitigation policies at the global or the national level ultimately depends on the assumed energy mix. This paper provides an overview of a framework that endogenizes resource use over time in a Hotelling-type exhaustible resource model.