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226 • MicroeconomicsFigure 12.6 • The natural dividend from renewable resource harvests.in Figure 12.6). However, if there is a single owner of the resource, or anoutside regulator such as a government agency, it’s possible to limit harvestto the profit-maximizing level, stock N 1 . The pure profits in this case(AB in Figure 12.6) are the natural dividend and arise not from specialabilities of the particular owner but from the reproductive powers of nature.The natural dividend can also be thought of as the value of the resourcein the ground (or sea). While the natural dividend typicallyaccrues to the owner of the resource, it is a purely unearned profit fromproduction. To whom should the dividend belong? That is a political decision,more in the realm of fair distribution than efficient allocation.■ Waste Absorption CapacityWaste absorption capacity is really just another ecosystem service. Wetreat it separately here because it is extremely important and because it hasdifferent characteristics from most other ecosystem services. Waste absorptioncapacity is the ability of the ecosystem to absorb and process pollution,and the economics of pollution is the predominant focus ofneoclassical environmental economics. As we pointed out previously,waste absorption is a rival good. If I dispose of my sewage in a wetland,there is less capacity subsequently for that wetland to process someoneelse’s wastes. As we also pointed out, many countries are trying to createinstitutions that make waste absorption capacity an excludable good.These can range from regulations that directly limit industrial emissionsto mandatory catalytic converters in cars to tradable emission permits forsulfur oxides. Tradable permits and quotas for pollution essentially makewaste absorption capacity a private good. These mechanisms will be discussedat length in Chapter 21.However, we must bear in mind that pollution is pure externality and