Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204412 
Year of Publication: 
2017
Series/Report no.: 
IFRO Working Paper No. 2017/08
Publisher: 
University of Copenhagen, Department of Food and Resource Economics (IFRO), Copenhagen
Abstract: 
This paper examines an industry whose economic activity uses a natural capital on which its profit also relies. When such a productive natural capital has a limited capacity to recover from its exploitation, a free market tends to over-exploit it, calling for public intervention. The analysis is relevant, among other examples, to the case of naturebased tourism. I study the sustainable management of a productive natural capital: the conditions under which its exploitation generates maximum long-run social benefits; the various ways in which a regulator can implement such an exploitation; the rent that it generates for the industry; the effect of social discounting and operators' short-termism, etc. Particular attention is given to situations in which the regulator gives more importance to the industry than it does to consumers, as when consumers are foreigners or when the industry generates needed tax revenues. In those contexts, I find that the industry should make more efforts of conservation, rather than less.
Subjects: 
Renewable natural resources
Over-exploitation
Optimal regulation
Proindustry regulation
Public revenue needs
Optimum taxation
Nature-based tourism
JEL: 
Q2
L1
H5
Document Type: 
Working Paper

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