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The elephant in Hotelling's room
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
2011 (English)In: Energy Policy, ISSN 0301-4215, Vol. 39, no 12, 7834-7838 p.Article in journal (Refereed) Published
Abstract [en]

This paper questions the assumption, commonly used in theoretical and policy research, that scarcity rents make up a large proportion of market prices for oil and coal. We show that the empirical literature, simple calculations of historical and future scarcity rent shares, and possible theoretical explanations all imply the same overall conclusions: that scarcity rents seem to have been marginal or non-existent historically; that they almost certainly do not dominate fossil resource prices today; and that there will be other factors shaping the prices in the upcoming decades. We therefore argue that using the scarcity rent as the main or only basis for policy or for explaining empirical outcomes is ill-advised.

Place, publisher, year, edition, pages
2011. Vol. 39, no 12, 7834-7838 p.
Keyword [en]
Resource scarcity, Climate policy, Green paradox
National Category
Economics and Business Environmental Sciences
URN: urn:nbn:se:su:diva-74040DOI: 10.1016/j.enpol.2011.09.029ISI: 000298363400035OAI: diva2:506704

authorCount :2

Available from: 2012-02-29 Created: 2012-02-28 Last updated: 2012-10-18Bibliographically approved

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Spiro, Daniel
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