Economics of Sustainable Natural Resource Management

Can existing patterns of human activity safely and sensibly continue unaltered over the long term, or will continuing these patterns lead to unacceptable consequences? This is the central issue underlying current discussions of sustainability. There is no denying that human activity remains completely dependent on natural resources and on the larger environment in which we function, so sustainable human systems require careful management of natural resources over the long term. This dissertation contributes to the understanding of sustainable economic development. To be specific, it focuses on certain renewable natural resources that are thought to be a key element of sustainability. The dissertation consists of three separate studies: two empirical case studies and one theoretical modeling study. The first study develops an economic model to address water allocation issues between upstream and downstream cities, then applies this model to the Nakdong River basin in South Korea. The second study focuses on soil erosion problems in developing countries, examining the role of public intervention in farmer adoption of soil conservation practices. Using two-period panel data collected from Salvadorian farmers, the study offers new insights into farmer adoption behaviors, and suggests ways to improve soil conservation programs. The last study develops an intertemporal resource allocation that combines bequest motives and Rawls’ maximin principle with the undiscounted utilitarian criterion. Our model provides an optimal path for sustainability by meeting two conditions: guaranteeing the highest sustainable utility level for future generations by following the GGR, and being acceptable for present generations by unburdening their excessive hardship