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Title:Pareto optimality in the extraction of fossil fuels and the greenhouse effect: a note PDF Logo
Authors:Sinn, Hans-Werner
Issue Date:2007
Series/Report no.:CESifo working paper 2083
Abstract:This note generalizes the Solow-Stiglitz efficiency condition for natural resources to the problem of fossil fuel extraction with a greenhouse effect. The generalized optimality condition suggests that the greenhouse effect implies overextraction in the sense of leaving future generations a wrongly composed wealth portfolio with too few natural resources relative to man-made capital. This judgment is independent of society’s ethical preferences concerning the well-being of future generations.
JEL:O13
Q32
Q54
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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