Robert F. Conrad

Economic Valuation of Ecosystem Services Provided by Oyster Reefs

Valuation of ecosystem services can provide evidence of the importance of sustaining and enhancing those resources and the ecosystems that provide them. Long appreciated only as a commercial source of oysters, oyster reefs are now acknowledged for the other services they provide, such as enhancing water quality and stabilizing shorelines. We develop a framework to assess the value of these services. We conservatively estimate that the economic value of oyster reef services, excluding oyster harvesting, is between

Resource taxation with heterogeneous quality and endogenous reserves

5500 and

The Natural Resource Curse and Economic Transition

99,000 per hectare per year and that reefs recover their median restoration costs in 2–14 years. In contrast, when oyster reefs are subjected to destructive oyster harvesting, they do not recover the costs of restoration. Shoreline stabilization is the most valuable potential service, although this value varies greatly by reef location. Quantifying the economic values of ecosystem services provides guidance about when oyster reef restoration is a good use of funds.

Taxation of mineral resources

Abstract This paper analyzes the impact of mining taxation on the intertemporal extraction profile for a heterogeneous ore body. The extraction profile specifies both quantities and qualities extracted in each period. Total extraction is thus endogenously determined. The taxes explicitly considered are severance taxes (ad valorem or per unit; on metal or on ore), property taxes, and profits taxes (with depletion allowance). The intertemporal framework integrates economic and geological factors, generating new results on extraction distortions and providing qualification or reconciliation of previous diverse results in this area.

The Russian Oil Tax Regime: A Comparative Perspective

Using cross-country regressions, we examine the relationship between “point-source” resource abundance and economic growth, quality of institutions, investment in human and physical capital, and social welfare (life expectancy and infant mortality) for all countries and for the economies in transition. Contrary to most literature, we find little evidence of a natural resource curse for all countries. Only the “voice and accountability” measure of institutional quality is negatively and significantly affected by oil wealth. In the economies in transition, there is some evidence that natural resource wealth is associated with lower primary school enrollment and life expectancy and higher infant mortality compared to other resource rich countries. Compared to other economies in transition, however, natural resource abundant transitional economies are not significantly worse off with respect to our indicators.

Intertemporal Extraction of Mineral Resources under Variable Rate Taxes

There has been a substantial increase in recent years in the level of taxation imposed on mining firms by state and local governments. This increase can be attributed to three factors: (1) a heightened awareness that resources are limited in quantity; (2) environmental damage resulting from mining operations has brought demands for just compensations; and (3) significant price increases for some minerals have often been viewed by states as an opportunity to collect additional tax revenue. The broad aim of this book is to provide a comprehensive economic analysis of the effects of mining taxation on the extraction of mineral resources and to offer a set of recommendations for tax policy. The primary objective of this design is to minimize the distortionary incentives created by the taxation. From a practical standpoint, however, one must also recognize the degrees of difficulty in the administration of the various taxes. 90 references, 1 figure, 14 tables.

Output taxes and the quantity-quality trade-off in the mining firm

Two American economists specializing in tax policy and the economy of Russia examine fiscal policies and instruments utilized by the Russian government to derive revenues from the countrys oil production and exports, and compare these policies with relevant measures in Australia, Canada, Norway, the UK, and United States. The authors proceed to analyze the net present value shares resulting from the development of an oil deposit that accrue to the government and to investors in Russia prior to 2007 and in 2008-January 2009 after adoption of changes in the fiscal regime. The analysis covers a variety of scenarios, including zero inflation and debt, positive inflation and debt levels, as well as price volatility. It yields, inter alia, a basic finding to the effect that the share of a projects net present value accruing to Russias government is high in comparison with that in the other oil-producing countries discussed in the paper. Moreover, relative to its mean return, the Russian government bears significantly less risk than the investor. Journal of Economic Literature, Classification Numbers: C150, E620, H250, L710, Q400. 1 figure, 10 tables, 44 references, appendix.

THE BIOECONOMIC FEASIBILITY OF CULTURING TRIPLOID CRASSOSTREA ARIAKENSIS IN NORTH CAROLINA

This analysis shows that variability in tax rates, whether for output, value, or profits taxes, may create allocation incentives that are qualitatively different from those under fixed-rate taxation. The differences appear in the order in which the various grades are extracted, the rate at which they are extracted, and the total quantity extracted. 13 references.

Tropical forest harvesting and taxation: a dynamic model of harvesting behavior under selective extraction systems

Abstract A dynamic model of mineral extraction and processing is developed which incorporates the quality-quantity trade-off which is made at the processing stage. This model is then used to analyze the effects of various output taxes and depletion allowances on the behavior of the firm. It is shown that these taxes may affect both the composition of output (concentrate) and the rate of extraction.

Royalties, cyclical prices and the theory of the mine

Abstract The collapse of the native oyster Crassostrea virginica fishery along the eastern United States has prompted resource managers to consider introducing a nonnative oyster for restoration of the wild fishery and/or for culture as a nonreproductive triploid. Evaluation of the profitability of a medium-sized C. ariakensis culture operation (500,000 oysters per year on ∼3 acre lease), assuming constancy of present market price despite increased supply, indicated that grow-out over winter resulted in an estimated ∼27% to 29% return on the annual investment at salinities >10 ppt because survivorship was high and Polydora spp. infestation did not occur. The greater cost of a longer grow-out phase at intermediate (10–25 ppt) salinities compensated for slightly higher mortality rates at high (>25 ppt) salinity sites, such that profitability did not vary with salinity during winter. In contrast, operations in summer always lost revenue (−28 to −37% return on investment) because of higher mortality rates at high salinities and elevated Polydora spp. infestation rates at intermediate salinities rendering the blistered oysters unsuitable for the half-shell market. Solving both the Polydora and survivorship problems would suffice to render summer operations profitable. Purchase of larger (>25 mm SH) seed from hatcheries reduced the return on investment by ∼60% in comparison with purchase and further nursery rearing of smaller (3 mm SH) seed in 2-mm mesh bags at the grow-out site. Operations utilizing larger seed were, however, still profitable (11% to 12% return on investment) during winter grow-out, and are less risky than including a nursery phase. Although Polydora infestation did not occur during the winter, sensitivity analysis determined that culture operations are extremely sensitive to Polydora spp. infestation. For instance, our analyses suggest that operations with infestation rates greater than 54% would lose revenue. Therefore, growers must avoid extending production especially at intermediate-salinity sites where grow-out is slower into the summer months when Polydora spp. settlement typically occurs. Given the economic viability of culturing C. ariakensis oysters, the potential value of the aquaculture fishery must now be considered in a broader context of the economic and ecosystem risks and benefits associated with introducing a nonnative oyster versus not introducing but instead restoring the native oyster.