This paper extends the Nordhaus DICE model to include the demands for coal, oil, and natural gas. These demands depend on own price, prices of substitute fuels, per capita income, and population. An augmented Hotelling model captures the effect of depleting oil resources. A methodological...

Application of optimal control theory to applied resource problems has been limited by the difficulty of numerical solutions. Typically, terminal values for the length of the production period, price, or production have been assumed rather than optimized. The use of an objective functional with...