Can abatement efforts in a common pool resource promote overexploitation of the resource?

We examine a common pool resource (CPR) where appropriations deteriorate the quality of the resource and, thus, its impact on the exploitation of the CPR. We focus on two settings: (i) firms use the CPR without abatement efforts, and (ii) abatement is allowed. We provide comparisons between these tw...

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Bibliographic Details
Published in:Environment and development economics 2025-01, p.1-24
Main Authors: Surve, Aditi A., Espinola-Arredondo, Ana
Format: Article
Language:English
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Summary:We examine a common pool resource (CPR) where appropriations deteriorate the quality of the resource and, thus, its impact on the exploitation of the CPR. We focus on two settings: (i) firms use the CPR without abatement efforts, and (ii) abatement is allowed. We provide comparisons between these two settings and identify socially optimal appropriation levels. We find that (i) higher quality of the CPR could induce firms to overuse the resource, and (ii) first-period appropriations with abatement decrease in the regeneration rate. However, abatement induces an overuse of the resource when the quality of the CPR improves.
ISSN:1355-770X
1469-4395
DOI:10.1017/S1355770X2400038X