TY  - JOUR
AU  - Sinn,Hans-Werner
TI  - Pareto Optimality in the Extraction of Fossil Fuels and the Greenhouse Effect: A Note
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13453
PY  - 2007
Y2  - September 2007
UR  - http://www.nber.org/papers/w13453
L1  - http://www.nber.org/papers/w13453.pdf
N1  - Author contact info:
Hans-Werner Sinn
Ifo Institute -
Leibniz Institute for Economic Research
at University of Munich
Poschingerstr. 5
81679 Munich
GERMANY
Tel: 49-89-21802748
Fax: 49-89-397303;49-89-8506434 (home)
E-Mail: sinn@ifo.de
AB  - This note generalizes the Solow-Stiglitz efficiency condition for natural resources to the problem of fossil fuel extraction with a greenhouse effect. The generalized optimality condition suggests that the greenhouse effect implies overextraction in the sense of leaving future generations a wrongly composed wealth portfolio with too few natural resources relative to man-made capital. This judgment is independent of society's ethical preferences concerning the well-being of future generations.
ER  -