We study the management of a natural resource that supports ecosystems as well as human needs. The reduction in the resource base introduces a threat of occurrence of catastrophic ecological events, such as the sudden collapse of the national habitat that lead to severe loss of biodiversity. The...

Under risk of catastrophic climate change, the occurrence hazard is added to the social discount rate. As a result, the social discount rate (i) increases and (ii) turns endogenous to the global warming policy. The second effect bears profound policy implications that are magnifed by economic...

Under risk of abrupt climate change, the occurrence hazard is added to the social discount rate. As a result, the social discount rate (i) increases and (ii) turns endogenous to the global warming policy. The second effect bears profound policy implications that are magnified by economic growth....

We extend Weitzman's (1998) recombinant growth framework to include endogenous R&D decisions. The analysis is carried out in the (knowledge-capital) state space by means of two characteristic curves: one is identified as a turnpike along which growing economies evolve; the other attracts...

Energy market prices ignore external effects, hence miss-allocate energy generation between (polluting) fossil fuels and (clean) solar technologies. Correcting the failure requires understanding the market allocation forces at hand. An important feature of solar energy is that its cost of supply...

Environmental consequences of natural resource exploitation often entail threats of future occurrences of detrimental abrupt events rather than (or in addition to) inflicting a damage gradually. The possibility of abrupt occurrence of climate-change related calamities is a case in mind. The...

We study the management of a natural resource that supports ecosystems as well as human needs. The reduction in the resource base poses a threat of occurrence of catastrophic ecological events, such as the sudden collapse of the natural habitat, that lead to severe loss of biodiversity. The...