Hart, Robert
- Department of Economics, Swedish University of Agricultural Sciences
Research article2011Peer reviewed
The elephant in Hotelling's room
Hart, Robert; Spiro, Daniel
Abstract
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. (C) 2011 Elsevier Ltd. All rights reserved.
Keywords
Resource scarcity; Climate policy; Green paradox
Published in
Energy Policy
2011, volume: 39, number: 12, pages: 7834-7838
Publisher: ELSEVIER SCI LTD
SLU Authors
UKÄ Subject classification
Economics
Publication identifier
- DOI: https://doi.org/10.1016/j.enpol.2011.09.029
Permanent link to this page (URI)
https://res.slu.se/id/publ/41810