Natural Resources

Allocation, Economics and Policy

Judith Rees

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351623032
• Edition: 1
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

In this book, first published in 1990, Judith Rees considers the spatial distribution of resource availability, development and consumption, and the distribution of resource-generated wealth and welfare. Showing that there are no simple answers, she analyses the complex interactions between economic forces, administrative structures and political institutions. This well-structured text is essential reading for upper-level students in geography, environmental planning, economics and resource management.

1Introduction

Origins of Concern

It is hardly necessary to point out that the 1960s saw a renaissance of public and academic interest in natural resource problems. The roots of this reawakening, however, go far back in time, and it is not possible to sustain the frequently expressed view that ‘widespread concern over the possibility of severe resource shortages in industrial societies in the relatively near future is a recent development’ (Smith, 1975. p. vii). As Kincaid (1983) points out, most people throughout most of history have lived in penury, at the edge of scarcity; it is hardly surprising, therefore, that resource scarcity has always been a central problem in western political thought.

In Europe doom-laden warnings about shortages of material stocks, deteriorating environmental quality and even the dangers of important dependence can be found in the literature long before Malthus (1798) lent his name to such pessimistic prognostications. Even in North America fears of scarcity have reoccurred since the late nineteenth century, when the limited nature of the resource base was given visible expression through the closure of the frontier – a closure which brought to an end the myth of American exceptionalism (Pickens, 1981). In the natural resource field, as in many others, there is much validity in Whitehead’s aphorism, ‘Everything of importance has been said before, by someone who did not discover it’ (quoted in Streeton, 1961, p. 96).

The immediate precursor of the most recent period of concern over material scarcities and environmental degradation was the rapid depletion of metallic and energy mineral reserves during the Second World War. In the United States and throughout Europe there was a wave of concern over the availability of those minerals essential for reconstruction and renewed industrial growth. Government reports predicted the imminent exhaustion of US oil reserves; world iron ore supplies were, in 1950, given only a twenty-year life; and in Europe the ‘energy gap’ was seen as a major threat to redevelopment efforts. However, the economic and technological response to the danger of material shortages was swift. Massive investments were made in technologies to allow the exploitation of previously subeconomic mineral deposits and to increase the efficiency in use of mineral and energy inputs. Moreover, the level of exploration activity escalated, with an upsurge of investment in previously underexploited Third World nations.

By the end of the 1950s the immediate danger of resource scarcity acting as a brake on economic development was past, but the underlying fear that physical limits must some day be reached remained. Such fears were fuelled by the rapidly rising trend of resource consumption associated with the exceptional rate of economic growth experienced in the 1950s and 1960s. In the developed market economies per capita gross national product rose by 3 per cent per annum during the 1950s and exceeded 4 per cent in the following decade; industrial output quadrupled in just twenty years, a rate of growth four times greater than that of the previous half-century. As a result, the consumption of virtually all the key metals and energy minerals escalated; at minimum a 2 per cent per annum compound consumption growth rate was experienced, and for many minerals the rates exceeded 5 per cent compound (for example, iron ore, 7 per cent; platinum, 9 per cent and aluminium 9.8 per cent). The scene was set for the now very familiar Malthusian models, which compared these exponential consumption trends with an assumed fixed resource base and then predicted imminent economic catastrophe.

Reinforcing the concern over potential material scarcities was the growing realization that physical laws on the conservation of matter dictate that resource materials do not conveniently vanish after processing and use. Rather a residual mass, broadly equal to that initially extracted, must eventually be discharged – albeit in a transformed state – to accumulate somewhere in the global ecosphere. Environmental change was, therefore, increasingly seen as the inevitable consequence of mineral exploitation. Moreover, the progressive pressure to use ever more low-grade and inaccessible deposits would not only increase the proportion of waste materials generated, but also necessitate greater inputs of energy and push exploitation into more environmentally sensitive regions. Fears over the capacity of the environment to absorb waste were thus added to the already growing concern over the physical limits to material supply. There was a growing realization that the natural environment was a virtually closed system, with its dimensions essentially fixed in terms of mass-energy and assimilative-regenerative capacity (d’Arge, 1972). To many, therefore, there was a basic incompatibility between the growth oriented nature of established economic and political institutions and the fixed limits of ‘spaceship earth’.

These fears for the sustainability of human life erupted with a messianic fervour during the late 1960s (Cotgrove, 1982). The ecological challenge to economic growth met with a receptive audience, particularly in North America, among the already disaffected young involved in the civil rights and anti-Vietnam movements. As Chisholm (1972, p. xi) puts it, ‘during the autumn of 1969, ecology caught on like a new religion among the young on college campuses across the country’. The environmental movement appeared to offer a new philosophy of life to those already questioning the rationality of consumerism and choosing to opt out of the economic rat race. It also found sympathy among a much wider public, concerned with the declining quality of their local environments under pressure from all forms of economic development.

The Nature of Resource Concerns

There are always dangers in attempting to categorize the extremely heterogeneous range of resource problems which have been analysed over the last twenty-five years. However, generalizing very broadly, it is possible to divide the new era of resource concern into two, by no means distinct, phases.

Environmental limits

During the first phase the focus was largely on the physical environment, its limits and deteriorating quality. The basic resource problems tended to be defined in physical terms, with attention being centred around four types of scarcity:

• (1) the exhaustion of essential metallic and energy minerals;
• (2) the danger that pollution and biological simplification would so disrupt the crucial global bio-geochemical cycles that the capacity of the ecosphere to sustain life would be severely restricted or even totally ruined;
• (3) the depletion of naturally renewable ‘productive’ resources, such as aquifer water, soils, forests and fish;
• (4) the loss and increasing scarcity of those environmental quality resources which were of recreational, amenity and aesthetic value to some at least of the population.

The last three issues had pollution and renewable resource depletion as the central problems, but in the latter two cases these were not viewed as global threats, rather attention was focused at the local and regional spatial scales.

Before the emergence of the environmental movement as a political force, the level of interest among social scientists in resource and environmental questions was extremely limited. Even as late as 1980 Schnaiberg could correctly point to a dearth of material treating environmental issues from a distinctive social perspective. Similarly, geographers who at one time would have defined their subject as the study of man-environment relationships had, by the 1960s, become preoccupied by the quantitative revolution and the search for spatial order; the physical environment vanished behind neat rules for the spacing of urban settlements and the development of transport networks. Undoubtedly, the dominant social science contribution to natural resource issues came from economics, although even here the number of analysts undertaking applied research in the area was extremely small. Working very much within a conventional welfare economic framework, renewable resource depletion and environmental degradation were treated as products of market failure and the existence of unpriced externalities. To promote a rational, efficient use of all natural resource products and environmental services it was necessary to ensure that they were priced (valued) and fully incorporated into the market system. Throughout it was assumed that the legitimate objective of any resource management programme was to maximize the economic welfare derived from resource use. In other words, the paradigm of growth was accepted, and little attention was paid to the possible ecological constraints imposed by the limited physical system. Overall social scientists were ill-prepared to play a distinctive role in the first phase of concern over resource scarcity. They reacted to the problems as posed by others, but did little to redefine the central questions from their own disciplinary perspective.

Predictably most reaction was generated by the visions of global Armageddon, which emerged from the work of Ehrlich (1970a), Forrester (1970), Commoner (1972b), Goldsmith et al. (1972), Meadows et al. (1972) and scores of others. The idea that scarcity of material stocks must act as an absolute and imminent barrier to economic expansion was strongly refuted. Such refutations correctly stressed the cultural, dynamic nature of resources, and emphasized the role of technology and socioeconomic change in countering physical shortages of particular minerals. The solutions proposed by the ecocatastrophists were also challenged. Those who demanded an end to population growth, technological change and economic development were regarded as élitist, callous and immoral. The price they were prepared to pay for ecological integrity and a sustainable future for the few would involve the certain death of millions. Social scientists began to analyse the socioeconomic consequences and the political feasibility of the various no-growth scenarios and, as they did, so, the seeds were sown for the second phase of the new era of resource concern.

Socioeconomic and political concerns

What marked this second phase was a redefinition of the central resource problems and a shift of attention from physical scarcity and environmental change per se to a broader investigation of the social, economic and political dimensions of resource use. By 1975 models predicting stock resource depletion had largely been discredited and overtaken by events; the key issues were now geopolitical scarcity and global redistributive equity.

There were many who viewed the 1973 oil crisis as the dawn of a new international economic order. The literature was full of statements such as, ‘October 1973 was a turning point in the history of international relations . . . the point when the Third World countries became aware, not of their rights, but of their power’ (Amin, 1979, p. 65). In similar vein Gardner et al. (1977, p. 57) saw OPEC as having ‘detonated an explosion in north-south economic relations that has been building up for years’, while Cohen (1978, p. 276) was arguing that what had occurred was ‘nothing short of a fundamental shift in the international economic power configuration’. With the advantages of hindsight, these claims look just as exaggerated – and as naive in conception – as the neo-Malthusian scarcity models had been shown to be. They were, in some cases, based on wishful thinking and always on a false perception of the fragility of extant socioeconomic and political institutions. However, the attention paid to the geopolitical aspects of resource exploitation and international trade relations was a valuable stimulus to research, mainly in economics, international relations, politics and law, which has considerably enhanced our understanding of the international mineral system.

The study of environmental change and renewable resource depletion problems had also broadened markedly by the mid-1970s. No one pretended that these were not real issues, although more sober scientific judgements had shown the claims of the ‘eco-gloom-and-doom’ school to be exaggerated and based on dubious data. There were numerous foci of attention. The rise of the environmental movement was studied as a social phenomenon; alternative management strategies were analysed in terms of their economic efficiency, efficacy, political feasibility and distributive consequences; assessments were made of the power of environmental interests to influence resource policy and management decisions; and the way resource policy was established and implemented was scrutinized.

It was quickly realized that environmental pollution and renewable resource depletion had no absolute meaning common to all people in all countries. As Holdgate (1979, p. ix) correctly says, ‘because the world is environmentally and economically diverse, problems are rarely universal . . . societies will rightly differ in the detail of their priorities’. This point was made abundantly clear at the United Nations conference on the human environment in 1971 (Stockholm Conference), where the developing countries showed their deep-seated suspicion that the environmental movement was yet another ploy to rob them of a chance to achieve material prosperity. Moreover, it also became clear that strategies and techniques to control pollution, or reduce the depletion of resource flows, could not simply be transferred from one country to another; their performance critically depended on the socioeconomic, legal and political context in which they were applied.

Even within individual nations there is no consensus over the objectives of renewable resource management and pollution control policies; nor is there agreement over the methods to be used to achieve these objectives. There are no simple solutions which can be found by ‘value-free’ scientific assessments. The fact that pollution occurs, landscapes are changed, fish stocks are depleted and biotic species are lost does not automatically mean that measures should be taken to avoid such environmental alterations. All forms of renewable resource degradation impose economic and welfare losses on some groups in society, but the avoidance of depletion and pollution damage is not a costless procedure. Someone has to pay the costs involved, and the type of avoidance mechanisms chosen will crucially affect who this will be. Ultimately choices have to be made about which environmental goods and services to provide, who should receive them and who pays; inevitably these are subjective, political, social and moral choices. They will not, and cannot, be made by rational analysis.

Just as some commentators regarded the oil crisis as marking a sea change in international economic relations, so the environmental movement was seen by many as a turning-point in the history of economic development. It was thought to represent the start of a new post-material era, in which there was a shift away from material values. However, once again such interpretations appear more the product of hope than reality. While more and more people are demanding environmental goods and services, it seems doubtful whether the struggle for material wealth will lessen as a result; as Miewald and Welch (1983, p. 10) argue, ‘the attainment of affluence leads to an increased demand for material prosperity to be delivered in prettier packages’.

Volume Objectives

The above very brief review of the nature of resource concerns has, I hope, shown that the range of issues is extremely wide and that there are various perspectives from which these issues can be viewed. It is clearly not feasible in any one volume to attempt to provide an encyclopaedic coverage of the subject area. Certainly, it is not the intention here to discuss the location, economics and policy problems of each individual resource or set of resources in turn. The concern is with principles and concepts which have general application throughout the natural resource sector, although of course these will be illustrated by reference to particular minerals or flow resources.

The book has four basic objectives. First, it aims to explain the processes or forces operating to produce three sets of distributions:

• (1) the spatial distribution of resource availability, development and consumption;
• (2) the distribution of these resources – and more important, the wealth and welfare they generate – between nations, interest and social groups, and individuals;
• (3) the allocation of resource products and services over time – clearly, this involves a consideration of potential future scarcities.

This concentration on distributions stems from the belief that all resource problems basically arise from conflict over the way resources, or rather the welfare derived from them, are allocated between groups over time and space. The explanations are not simple and must involve an understanding of physical systems, economic processes, social organizations, legal and administrative structures, and political institutions. In this search for explanations it is necessary to abandon the idea that any one model, theory, or disciplinary perspective can provide all the answers. Any attempt to explain and improve our understanding of these distributive patterns is, of course, a challenging and worthy academic e...