This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 98 No. 3 (June 2008)


Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter


AER - All Issues

AER Forthcoming Articles

Ordering the Extraction of Polluting Nonrenewable Resources

Article Citation

Chakravorty, Ujjayant, Michel Moreaux, and Mabel Tidball. 2008. "Ordering the Extraction of Polluting Nonrenewable Resources." American Economic Review, 98(3): 1128-44.

DOI: 10.1257/aer.98.3.1128


A well-known theorem by Herfindahl states that the low-cost nonrenewable resource must be exploited first. Consider resources that are differentiated only by their pollution content. For instance, both coal and natural gas are used to generate electricity, yet coal is more polluting. We show that the ordering of extraction need not be driven by whether a resource is clean or dirty. Coal may be used first, followed by natural gas, and again by coal. Such "vacillation" does not occur under cost heterogeneity. A perverse policy implication is that regulating pollution may accelerate use of the polluting resource.

Article Full-Text Access

Full-text Article

Additional Materials

Link to Appendix (109.23 KB)


Chakravorty, Ujjayant (U Alberta)
Moreaux, Michel (U Toulouse I)
Tidball, Mabel (INRA-LAMETA, Montpellier)

JEL Classifications

Q38: Nonrenewable Resources and Conservation: Government Policy
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
Q58: Environmental Economics: Government Policy
Q32: Exhaustible Resources and Economic Development

American Economic Review

Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)


AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals

AEA Member Login:

AEAweb | AEA Journals | Contact Us