Economics and the Environment Handout #2 Graphs and Tables

Figure A-4.1: Malthusian Model Equilibrium CBR CDR Y Y CBR, CDR N Y* N* NRI = 0 Y* = Subsistence Income T0T0

Figure A-4.2: Malthusian Model 1 CBR CDR Y Y N Y* N* NRI = 0 T0T0 Y1Y1 N 1 CBR, CDR

Figure A-4.3: Malthusian Model 2 CBR CDR Y Y CBR, CDR N Y 2 Y* N* NRI = 0 T0T0 N 2

Figure A-4.4: Malthusian Model 3 CBR 0 CDR Y Y CBR, CDR N Y* Y 1 * N* NRI = 0 T0T0 CBR 1 N 1 *

Figure A-4.5: Malthusian Model 4-The Trap CBR 0 CDR Y Y CBR, CDR N Y* Y 1 N* NRI = 0 T0T0 T1T1 N** 1 2 3

Figure A-4.6: The Demographic TransitionThe Demographic Transition Source: Joseph A. McFalls, Jr. Population: A Lively Introduction. Third edition. Population Reference Bureau 53(3); 1998: 39Population: A Lively IntroductionPopulation Reference Bureau

World Crude Oil-Billion Barrels-Proved Reserves Source: Bradley and Fulmer, Energy: The Master Resource, p. 88

World Natural Gas -Trillion Cubic Feet-Proved Reserves Source: Bradley and Fulmer, Energy: The Master Resource, p. 88

World Coal-Billion Short Tons-Proved Reserves Source: Bradley and Fulmer, Energy: The Master Resource, p. 89

Major Resource Shifts in Human History Source: Maurice and Smithson, The Doomsday Myth: 10,000 Years of Economic Crises, 1984, pp

Figure B-1.1: World Market for Oil D S Q P P W = $3 60m

Figure B-1.2: US Imports of Oil P Q S DOMESTIC SR P W = $3 9m 14m 19m D SR $33 US Oil Market

Figure B-1.3: Consumer’s and Producer’s Gain from Trade for 9 Millionth Unit $66 $33 14m9m D S Q P $49 Consumer Gain from Trade (CGT) Producer Gain From Trade (PGT) $3 US Oil Market

Figure B-1.4: Total Consumer’s and Producer’s Gain from Trade $66 $33 14m9m D S Q P Total CGT Total PGT US Oil Market

Figure B-1.5: US Imports of Oil P Q S DOMESTIC SR P W = $3 9m 14m 19m D SR $33 (1) (2) (3) (4)(5) US Oil Market

Explanation of Figure B-1.5 – US would produce 14mbd by itself at $33/b – At price of $3, US would produce 9mbd and import 10mbd. – Before Trade – CGT = Area 1; PGT = Area 2 + Area 3 – After Trade – Consumers gain CGT of Area 2 + Area 4 + Area 5 – Producers lose PGT of Area 2 – Net gain of Area 4 + Area 5 = Gains from trade

Figure B-2.1: World Market for Oil D S0S0 Q P P W = $3 50m 60m P W ’ = $12 S’

Figure B-2.2: US Imports of Oil After OPEC Raised Price P Q S DOMESTIC SR P C = $3 9m 11m 17m 19m P’ W = $12 D SR

Explanation of Figure B-2.2 – 1. At world price $12, US would produce 11mbd and imports 6mbd. – 2. When US price controls are introduced at $3, US producers would cut back production to 9mbd and imports rise to 8mbd so consumption is still 17mbd. World price is still $12 so need slightly different graph.

Figure B-2.3: US Imports of Oil After OPEC Raised Price P Q S DOMESTIC SR P C = $3 9m 11m 17m 19m P’ W = $12 D SR

Explanation of Figure 2.3 – 1. When US price controls are introduced at $3, US producers would cut back production to 9mbd and imports rise to 8mbd so consumption is still 17mbd. – 2. Results: Price controls lower US production, transfer PGT from producers to refiners, raise imports by 2mbd, and leave consumption unchanged.

Real Gasoline Prices, Ken Green, “What Drives Gas Prices-Cartels, Speculators or Supply and Demand?” 2011

Refinery Profitability Source: David Montgomery, “Potential Effects of Proposed Legislation on the Cost and Severity of Supply Interruption,” 2007

Crude Oil Reserves, Production Capacity, Production, and Quotas NationReserves 1 1 Production Capacity 2 2 Production 3 3 Quota 4 4 Algeria11.81, Indonesia ,425 Iran125.83,900 4,037 Iraq115.01,900 n.a. Kuwait ,500 2,207 Libya39.01,600 1,473 Nigeria32.32,300 2,265 Qatar Saudi Arabia ,0009,5008,937 United Arab Emirates97.82,5002,4502,400 Venezuela77.22,600 3,165 OPEC total ,36529,81527,500 World total1, ,20085,000n.a. Source: U.S. Energy Information Administration. Note: Totals may not sum due to rounding. Production capacity and production figures are subject to some dispute Billions of barrels as of January 1, Maximum sustainable, thousands of barrels per day as of March Thousands of barrels per day as of March Thousands of barrels per day as of March 16, 2005.

OPEC vs Non-OPEC Production, Source: Bradley and Fulmer, Energy: The Master Resource, 2004, p. 99

Figure B-4.1: US Imports of Oil After Imposing a Windfall Profits Tax P Q D S DOMESTIC P C = $3 9m 11m 17m 19m P’ W = $12 S TAX

Figure B-3-1.1: Population Growth Curve S S* S’ S G(S) S = Fish Stock G(S) = Growth of Fish Stock

Figure B-3-1.2: Equilibrium Catch Function S’S1S1 C1C1 G(S), C S Start at S’. A Fisherman catches C 1 and so the stock in the ocean fishery decreases to S 1.

Figure B-3-1.3: Effort Function and Sustainable Catch or Yield S’S1S1 C1C1 G(S), C S E = Effort where E 1 < E 2 < E 3. C2C2 S2S2 S3S3 C3C3 C(E 1 ) C(E 2 ) C(E 3 )

Figure B-3-1.4: Sustainable Yield or Catch as a Function of Effort E 1 E 2 E 3 C1C1 C E C2C2 C3C3

Figure B-3-1.5: Total Revenue as a Function of Effort TR C E TR Sustainable Yield Curve

Figure B-3-1.6: Total Cost of Effort TC $ E

Figure B-3-1.7: Maximizing the Net Benefits of Fishing E $ TR TC E*

Figure B-3-1.8: Effect of Technological Change E $ TR TC E* E** TC’

Figure B-3-1.9: Property Rights versus Open Access E $ TR TC E* E 1 E* = Property Rights Solution E 1 = Open Access Solution

Figure B : Effect of CITES on Elephants and Rhinos S LEGAL S PROHIBITION D Q P 15K 20K $100 $2,000