Economics of Renewable Natural Resources

Renewable natural resources include those resources useful to human economies that exhibit growth, maintenance, and recovery from exploitation over an economic planning horizon. The economics of such resources has traditionally considered stocks of fish, forests, or freshwater, much like a banker would tally interest on cash deposits. From an economic point of view, the management of biomass, soil fertility or aquifer depth has been forced into a framework of discounted, marginal, zero profit valuation. Economic value has been discounted to account for a positive time preference. Only marginal value (that of the next unit) is considered relevant to market-based decisions. And all economic profits (including a normal return to factor inputs) should be driven to zero to maximize the sum of consumer and producer surplus at a social optimum.