Are two resources really better than one? Some unexpected results of the availability of substitutes

Abstract

The possibility of exploiting multiple resources is usually regarded as positive from both the economic and the environmental point of view. However, resource switching may also lead to unsustainable growth and, ultimately, to an equilibrium condition which is worse than the one that could have been achieved with a single resource. We developed a dynamic model where users exploit multiple resources and have different levels of preference among them. In this setting, exploiting multiple resources leads to worse outcomes in both economic and ecological terms than the single resource case under a wide range of parameter configurations. Our arguments are illustrated using two empirical situations, namely oil drilling in the North Sea and whale hunting in the Antarctic.