LOJK10229U Natural Resource Economics

Volume 2014/2015
MSc Programme in Environmental and Natural Resource Economics
MSc Programme in Agricultural Economics
MSc Programme in Animal Science
MSc Programme in Agriculture


Natural Resource Economics deals with the optimal utilisation of renewable and exhaustible resources. Here, a distinction is made between renewable resources such as forests and fisheries and non-renewables such as deposits of minerals and metals. There are several features of natural resources that make them different from other economic goods. First of all, natural resources are both consumption/production goods and assets. The latter implies that they have to be treated in the same way as other assets, such as bonds and stocks. A second feature is that both harvesting or extraction and growth (for renewables) take place over a long period of time. This makes it necessary to use a dynamic approach. Thirdly, it is often hard to define ownership of natural resources. If at the same time there is open access to the resource, the problem of the commons arises. This makes regulation of the utilisation of the resource necessary from the point of view of both the extractors and Society. Finally, especially for renewable resources, values other than those related to direct consumption and production are important in determining the optimal social stock level of the resource. These other values could be recreational (such as in a forest), biodiversity or pure existence value.


Learning Outcome
The objective of this course is to give a thorough introduction to and an overview of the economics on natural resources. The course deals with the optimal utilization of renewable resources (e.g. forests and fisheries) and non-renewable resources (e.g. mineral deposits). There are several features of natural resources that make them different from other economic goods. These features are highlighted and dealt with at length in the course. The analyses of natural resources necessitate the use dynamic methods.


- Describe how the various natural resources analyzed in the course develop over time
- Describe and explain the basic economic methods applied in natural resource economics
- Identify and explain the main economic principles of natural resource use
- Classify and explain optimal natural resource use under various market forms
- Define and use the economic concept of natural resource scarcity
- Define and use the economic concept of sustainable development

- Be able to characterize a natural resource by the use of economic theory
- Be able to apply the models developed in the course to problems of natural resource utilization.

- Be able to work alone or in a team on problems of natural resource utilization


The precise literature will be announced at the beginning of the course at Absalon. But it is likely to include:

Hanley, N., J.F. Shogren and B. White (2006), Environmental Economics in Theory and Practice, Oxford: Oxford University Press

P. Neher (1990), Natural Resource Economics – Conservation and Exploitation, Cambridge, Cambridge University Press (Selected chapters)

P.S. Dasgupta and G.M. Heal (1979), Economic Theory and Exhaustible Resources, Cambridge: Cambridge University Press (Selected chapters)

C.W. Clark (1980), Towards a Predictive Model for the Economic Regulation of Commercial Fisheries, Canadian Journal of Fish. Aquat. Sci. 37, 1111-1129

R. Dorfman (1969), An Economic Interpretation of Optimal Control Theory, American Economic Review 59, 817-831.

R. Hartman (1976), The Harvesting Decision When a Standing Forest Has Value, Economic Inquiry, 14, 52-58

Strang, W.J. (1983), On the Optimal Forest Harvesting Decision, Economic Inquiry 21, 576-583

Plus some other papers and articles.


lectures and exercises
  • Category
  • Hours
  • Exam
  • 4
  • Lectures
  • 40
  • Preparation
  • 162
  • Total
  • 206
7,5 ECTS
Type of assessment
Written examination, 4 hours under invigilation
All aids allowed
Marking scale
7-point grading scale
Censorship form
No external censorship
One internal examiner
If 10 or fewer register for the reexamination the examination form will be oral.
Criteria for exam assesment

evaluated according to the learning outcome