Economic development on a finite planet with stochastic soil degradation
dc.contributor.author
Brausmann, Alexandra
dc.contributor.author
Bretschger, Lucas
dc.date.accessioned
2019-01-31T09:21:38Z
dc.date.available
2019-01-31T09:21:38Z
dc.date.issued
2018-09
dc.identifier.issn
0014-2921
dc.identifier.issn
1873-572X
dc.identifier.other
10.1016/j.euroecorev.2018.06.006
en_US
dc.identifier.uri
http://hdl.handle.net/20.500.11850/321773
dc.identifier.doi
10.3929/ethz-b-000275005
dc.description.abstract
World economic development is associated with growing food consumption. Agricultural land, however, suffers from over-exploitation and is subject to environmental shocks which are projected to become more severe due to climate change. We present a stochastic model of a dynamic economy where soil is an essential input and natural disasters are sizeable, multiple, and random. Expansion of economic activities raises effective soil units but contributes to an aggregate loss of soil-protective ecosystem services, which exacerbates soil degradation at the time of a shock. We provide closed-form analytical solutions and show that optimal development is characterized by a constant growth rate of stocks and consumption until an environmental shock arrives causing all variables to jump downwards. Optimal soil management consists of spending a constant fraction of output on preservation measures, which is an increasing function of the shocks hazard rate, degradation intensity of agricultural practices, and the damage intensity of environmental impact. We derive the optimal propensity to save and discuss the impact of human pressure and risk exposure on soil and output. We also discuss quantitative impacts of climate change on optimal soil management.
en_US
dc.format
application/pdf
en_US
dc.language.iso
en
en_US
dc.publisher
Elsevier
en_US
dc.rights.uri
http://creativecommons.org/licenses/by/4.0/
dc.subject
Soil conservation
en_US
dc.subject
Stochastic degradation
en_US
dc.subject
Agriculture
en_US
dc.subject
Environment
en_US
dc.subject
Uncertainty
en_US
dc.subject
natural disasters
en_US
dc.title
Economic development on a finite planet with stochastic soil degradation
en_US
dc.type
Journal Article
dc.rights.license
Creative Commons Attribution 4.0 International
dc.date.published
2018-06-18
ethz.journal.title
European Economic Review
ethz.journal.volume
108
en_US
ethz.journal.abbreviated
Eur. econ. rev.
ethz.pages.start
1
en_US
ethz.pages.end
19
en_US
ethz.version.deposit
publishedVersion
en_US
ethz.code.jel
JEL - JEL::Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics::Q1 - Agriculture::Q18 - Agricultural Policy; Food Policy
en_US
ethz.code.jel
JEL - JEL::Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics::Q5 - Environmental Economics::Q54 - Climate; Natural Disasters and Their Management; Global Warming
en_US
ethz.code.jel
JEL - JEL::O - Economic Development, Innovation, Technological Change, and Growth::O1 - Economic Development::O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products
en_US
ethz.code.jel
JEL - JEL::O - Economic Development, Innovation, Technological Change, and Growth::O4 - Economic Growth and Aggregate Productivity::O44 - Environment and Growth
en_US
ethz.identifier.wos
ethz.identifier.scopus
ethz.publication.place
Amsterdam
en_US
ethz.publication.status
published
en_US
ethz.leitzahl
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.::03635 - Bretschger, Lucas (emeritus) / Bretschger, Lucas (emeritus)
en_US
ethz.leitzahl.certified
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.::03635 - Bretschger, Lucas (emeritus) / Bretschger, Lucas (emeritus)
en_US
ethz.date.deposited
2018-07-11T05:40:13Z
ethz.source
SCOPUS
ethz.source
FORM
ethz.eth
yes
en_US
ethz.availability
Open access
en_US
ethz.rosetta.installDate
2019-01-31T09:21:44Z
ethz.rosetta.lastUpdated
2024-02-02T07:05:10Z
ethz.rosetta.versionExported
true
dc.identifier.olduri
http://hdl.handle.net/20.500.11850/275005
dc.identifier.olduri
http://hdl.handle.net/20.500.11850/318516
ethz.COinS
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