Technology adoption in nonrenewable resource management

Maria A. Cunha-e-Sá, Ana Balcão Reis, Catarina Roseta-Palma

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Technological change has played an important role in models of nonrenewable resource management, since its presence mitigates the depletion effect on extraction costs over time. We formalize the problem of a competitive nonrenewable resource extracting firm faced with the possibility of technology adoption. Based on a quadratic extraction cost function, our results show that the expected net benefits from adoption increase both with the size of the resource stock and with prices. A boundary that separates the region where expected net benefits are positive from the one where they are negative is derived.

Original languageEnglish
Pages (from-to)235-239
Number of pages5
JournalEnergy Economics
Volume31
Issue number2
DOIs
Publication statusPublished - 1 Mar 2009

Keywords

  • Nonrenewable resource
  • Quadratic cost
  • Size of the stock
  • Technology adoption

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