Harvesting and Replenishment Policies for Renewable Natural Resources

The current paper links the optimal intertemporal use of renewable natural resources to the harvesting activities of various economic agents. Previous contributions cite market forces as a causative factor inducing the extirpation of renewable natural resources. The analysis given here discusses investment in the stock of renewable resources and cites important examples of this activity. By introducing joint harvesting and replenishment strategies into a model of renewable resource use, the analysis adds descriptive reality and relevance to positive and normative discussions of renewable natural resource use. A high price for the yield or a high discount rate tend to diminish the size of the optimum stationary stock of the resource with a non-replenishment harvesting strategy. Optimal non-replenishment harvesting strategies for renewable natural resources will exhaustion or extirpation of the resource if the price of the yield or the discount rate are sufficiently large. However, the availability of a replenishment technology and the use of replenishment activities tends to buffer the resource against exhaustion or extirpation.