OWNERSHIP AND WATER SYSTEM OPERATION1

ABSTRACT: Two types of organizational systems provide most of the water service in the United States. The investor-owned firm operates on a profit basis generally subject to state commission regulation. The government-owned firm is generally confronted by local control. The comparative efficiency of private versus government firm provision of water services is essentially an empirical issue. Unit costs and other operating statistics are examined for water firms of each ownership form. The analysis shows that private firms tend to have higher operation costs than do government firms, possibly attributable to wage-salary differentials. The analysis also indicates that capital investment in large government firms may result in diseconomies. The analysis creates serious doubt as to whether efficient provision of water services can be better facilitated by large mergers of either ownership form.     

Can market-based policies accomplish the optimal floodplain management? A gap between static and dynamic models

The purpose of this short article is to set static and dynamic models for optimal floodplain management and to compare policy implications from the models. River floodplains are important multiple resources in that they provide various ecosystem services. It is fundamentally significant to consider environmental externalities that accrue from ecosystem services of natural floodplains. There is an interesting gap between static and dynamic models about policy implications for floodplain management, although they are based on the same assumptions. Essentially, we can derive the same optimal conditions, which imply that the marginal benefits must equal the sum of the marginal costs and the social external costs related to ecosystem services. Thus, we have to internalise the external costs by market-based policies. In this respect, market-based policies seem to be effective in a static model. However, they are not sufficient in the context of a dynamic model because the optimal steady state turns out to be unstable. Based on a dynamic model, we need more coercive regulation policies.     

The Determinants of Mining Company Response to Environmental Approvals Regulation: A Report of Australian Research

Companies react in different ways to environmental regulation. A prevailing view in the literature suggests that external factors, particularly stakeholder groups, exert the most influence on the environmental responses of firms. This paper reports on research that examines the influence of a range of possible determinants, both internal and external, on the way Australian mining companies respond to environmental approvals regulation. External pressures included stakeholder pressure, jurisdictional culture and market characteristics, and internal pressures included organizational culture, organizational learning, the influence of individuals within firms and company size. The study found that the internal pressures of organizational culture, organiza tional learning and the influence of individuals exert the greatest influence on mining company response to environmental approvals regulation. These results suggest that existing explanations of corporate environmental behaviour, which emphasize external factors, should be complemented by a focus on the internal dynamics of firms.     

Efficient management of marine resources in conflict: An empirical study of marine sand mining, Korea

This article develops a dynamic model of efficient use of exhaustible marine sand resources in the context of marine mining externalities. The classical Hotelling extraction model is applied to sand mining in Ongjin, Korea and extended to include the estimated marginal external costs that mining imposes on marine fisheries. The socially efficient sand extraction plan is compared with the extraction paths suggested by scientific research. If marginal environmental costs are correctly estimated, the developed efficient extraction plan considering the resource rent may increase the social welfare and reduce the conflicts among the marine sand resource users. The empirical results are interpreted with an emphasis on guidelines for coastal resource management policy.     

Environmental management in mining and mineral processing in developing countries

This paper analyses some of the social, political and economic dimensions of the environmental behaviour of mining enterprises and governments in the context of evolving regulation, growing public concern and technological innovation. Contrary to the belief that a trade-off exists between production costs and environmental costs, which presupposes a static technology, new generations of technology offer improved economic and environmental efficiency. Technical change is therefore reducing both production and environmental costs. Because most planned mines and available reserves are in developing countries, situations may develop whereby technical change reduces that trade-off for them.     

Simulating Direct and Indirect Damages to Commercial Fisheries from Marine Sand Mining: A Case Study in Korea

Rapid growth in marine sand mining for construction and other uses poses environmental challenges to coastal nations virtually worldwide. Yet the development of management policies, such as a system of fees imposed on operators for damage caused by mining, has been frustrated by a lack of studies to support such measures. Adapting a Beverton-Holt bioeconomic model, this paper attempts to contribute to the estimation of external costs to commercial fisheries due to marine mining. Using the major mining area of Ongjin in Korea as a case study, we estimate economic losses in use value of commercial fisheries through the time to recovery of the injured resource stocks. Present value of lost catch over a 1-year period from mining to resource recovery is estimated at $38,851 for a single “prototype” mining site. Estimated cumulative damages due to recurring mining for 5 and 10 years are $1.5 million and $2.2 million, respectively, at 20 mining sites. Sensitivity analyses are used to examine the effects of alternative assumptions to assess the many sources of uncertainty. Using a form of meta-analysis, dose-response information is used to assess the excess mortality the mining sediment plume has on eggs and larvae and, ultimately, on the value of lost catch ($841). Also addressed is the importance of specifying the appropriate “premining” conditions against which to assess environmental losses at the mining site. Damages estimated with premining fish populations are $23,066 higher than is the case using postmining conditions. Overall, the illustrative results suggest the variety of complex conditions which influence damage to fisheries from mining and which can benefit from further study to improve management guidelines. An erratum to this article can be found at     

Incentive compatible environmental regulation.

Optimal environmental regulations are derived in the presence of asymmetric information about pollution abatement costs. It is recognized that compliance may have to be induced through appropriate monitoring and enforcement measures. The regulator commits to monitoring of compliance with the incentive compatible environmental regulations, and asymmetric information characterizes the interaction between the firm and regulator. The probabilities of monitoring abatement standards and corresponding subsidies are optimally chosen to ensure firm compliance. Enforcement considerations are shown to distort downward the pollution abatement requirements mandated for firms.     

Environmental accounting for waste management: A study of local governments in Australia

Local governments in Australia, especially in large urban areas, have faced a challenge of the growing quantity of waste generated and the diminishing space for waste disposal in recent years. The central government has demonstrated the importance of developing strategies to make full environmental costs and impacts of waste disposal and material recovery accountable for waste management decision-making. However, research into this field is limited. This paper investigates environmental accounting practices in local government waste management. From a survey conducted with local government authorities in New South Wales (NSW) Australia, it is found that overall the level of direct waste flow and activity accounting is higher than the level of hidden and external environmental cost accounting, though local governments tend to identify and use more physical information associated with waste flows and activities than relevant monetary information. External environmental impacts of waste disposal are often overlooked and show the lowest level of practices. The survey results also indicate that urban local governments have taken more environmental information into account than rural local governments, but such difference is not significant between local governments of different sizes. The complexity of waste technical services and operations is confirmed to have a positive and significant effect on the level of environmental accounting for waste management across local governments surveyed.     

Assessing the impact of driverless haul trucks in Australian surface mining

Australia has been a leading mining nation and its mines continue to attract substantial investment due to its strong mineral endowment, mining tradition and high skills base. In recent years Australian mining companies have been facing higher labour costs, which need to be offset by other savings. Automating mine-site machinery offers one potential source of such savings.Underground mines pioneered automated technology largely for safety and mine accessibility reasons and to reduce operating costs. Yet these operations now represent a much smaller portion of the total ore tonnes mined due to the changing mining techniques meaning larger lower grade deposits are becoming economic. It appears the future of mine automation will be directed by surface mining as this maturing technology finds further applications above ground and in the next decade large scale open pit automation trials gain more momentum.This paper assesses the implications of introducing driverless haul trucks in a typical large remote Australian open-pit mine. Such automation will save employee and associated costs, increase operational productive hours and ultimately will reduce mine site workforce numbers. While there will be fewer jobs per mine, with reduced costs and higher productivity some previously uneconomic mines may again be profitable.The social implications of greater mine site automation are the reduction in population of remote mining towns and a decrease in the lower skilled labour requirements for the mining sector. There will be an increase in fly-in fly-out mining operations and companies will establish remote control centres for automated mines in larger cities. This may decrease overall labour requirements and so reduce employment in the sector; therefore, the government should be mindful of implementing policies that ensure a fair return on the economic rent of mineral leases.     

我国环境规制强度测度及其对就业规模的影响——基于省际动态面板数据的实证分析

本文建立模型具体测算了我国30个省(区、市)自2003年至2016年的环境规制强度指标,发现全国环境规制强度整体呈上升趋势,其中东部省份强度最大,中部地区的环境规制强度低于东部而略高于西部地区。进一步构建动态面板计量模型进行实证分析,结果显示,环境规制对就业的影响具有明显的U形特征,即随着环境规制强度的提高,其对就业起着先抑制后促进的作用。而经济发展水平、人口规模、产业结构的优化升级以及平均工资水平的提高均能显著促进全样本的就业增长,但对外依存度对各样本而言都明显不利于就业规模的扩张。     

Contrasting community and corporate perceptions of sustainability: A case study within the platinum mining region of South Africa

The concept of sustainable development is debatable within the mining context as the fact that mineral resources are non-renewable makes mining inherently unsustainable. The need for a realistic definition of sustainability that can be applied to mining is important, in light of claims by the industry that sustainable development principles underpin aspects of their operations. Furthermore, the socio-economic upliftment that should logically follow the implementation of these principles is not visible in many mining areas. Within the theoretical frameworks of intermediate sustainability, our study aimed to determine the level of sustainability that is appropriate for the mining context. The evaluation of community perspectives within the Rustenburg platinum region in South Africa as a case study, based on qualitative information derived from structured questionnaires and informal interviews brings further clarity. We found out that the environmental and social costs associated with mining were high, while economic benefits to surrounding communities were low. The perceptions of community and corporations were found to contrast sharply: the reality experienced by community members fell well short of the optimistic scenarios presented in the corporate social responsibility reports of the mining companies, which has implications for the mining industry in the area. The Rustenburg region is typical of mining areas, more especially the developing world, and application of a realistic sustainable development concept here can help the mining industry elsewhere to move its operations onto a genuinely more sustainable path.     

The link between 'green' and economic success: environmental management as the crucial trigger between environmental and economic performance

The link between environmental and economic performance has been widely debated in the literature for the last ten to fifteen years. One view is that improved environmental performance mainly causes extra costs for the firm and thus reduces profitability. However, also the opposite has been argued for: improved environmental performance would induce cost savings and increase sales and thus improve economic performance. Theoretical and empirical research have provided arguments for both positions and have not been conclusive so far. This article discusses reasons for the different views and the differences in empirical research and presents a theoretical framework to explain the coexistence of the conflicting views. It is argued that not merely the level of environmental performance, but mainly the kind of environmental management with which a certain level is achieved, influences the economic outcome. The model presented provides implications for both empirical research and company management in practice. Research and business practice should focus less on general correlations and more on causal relationships of eco-efficiency, i.e. the effect of different environmental management approaches on economic performance.     

Environmental issues for developing countries arising from liberalized trade in the mining industry

This review analyses some of the environmental and economic implications of current trade policies and changes in the world trading system for mineral producers and consumers. A principal factor which determines environmental performance is whether firms have the resources and capabilities to undertake innovation. We therefore place particular emphasis on the anticipated effects of liberalized trade on innovation and competitiveness at the firm level. Evidence indicates that improvements in environmental management would be expected to occur irrespective of the country hosting the investment. Due to the opening investment climate and relatively large quantities of mineral reserves, we expect these effects to be positive for many mineral producing developing countries. One difficulty which may arise is whether policy measures to promote production efficiency and develop innovation in mining and mineral processing operations could be interpreted as protectionism. The creation of new lines of credit, to promote, but not subsidize, technological and organizational innovation, may be the best way forward for developing countries .     

Multiproduct mine output and the case of mining waste utilization

This article addresses the concepts of economies of scope and multiproduct production, subadditivity and transray convexity as it applies to the mining industry. The article goes on to expand these concepts to include the case of mining waste utilization. It discusses how the modification of mining wastes into a marketable product can develop a relationship across the cost functions of the modified mining waste and ore production and how this interrelationship affects the profit maximizing condition. It discusses four possible outcomes from mining waste modification and its development into marketable products on the profitability and production of ore by the firm. Finally, it discusses mining waste utilization effects on rehabilitation costs and the potential for a decrease in the adverse community effects due to mine closure.     

Economic Valuation of a Mangrove Ecosystem Threatened by Shrimp Aquaculture in Sri Lanka

Mangrove ecosystems in Sri Lanka are increasingly under threat from development projects, especially aquaculture. An economic assessment is presented for a relatively large (42 ha) shrimp culture development proposed for the Rekawa Lagoon system in the south of Sri Lanka, which involved an extended cost–benefit analysis of the proposal and an estimate of the “total economic value” (TEV) of a mangrove ecosystem. The analysis revealed that the internal benefits of developing the shrimp farm are higher than the internal costs in the ratio of 1.5:1. However, when the wider environmental impacts are more comprehensively evaluated, the external benefits are much lower than the external costs in a ratio that ranges between 1:6 and 1:11. In areas like Rekawa, where agriculture and fisheries are widely practiced at subsistence levels, shrimp aquaculture developments have disproportionately large impacts on traditional livelihoods and social welfare. Thus, although the analysis retains considerable uncertainties, more explicit costing of the environmental services provided by mangrove ecosystems demonstrates that low intensity, but sustainable, harvesting has far greater long-term value to local stakeholders and the wider community than large shrimp aquaculture developments.     

Balancing environmental and industry sustainability: A case study of the US gold mining industry

Mandatory insurance requirements and/or mitigation fees (royalties) for mining companies may help reduce environmental risk exposure for the federal government. Mining is examined since the Environmental Protection Agency (EPA) Toxic Release Inventory reveals that this sector produces more hazardous waste than any other industrial sector. Although uncommon, environmental expense can exceed hundreds of millions of dollars per development. Of particular concern is the potential for mines to become unfunded Superfund sites. Monte Carlo simulation of risk exposure is used to establish a plausible range of unfunded federal liabilities associated with cyanide-leach gold mining. A model is developed to assess these costs and their impact on both the federal budget and corporate profitability (i.e., industry sustainability), particularly if such costs are borne by offending firms.     

On accounting for sustainable development and accounting for the environment

Economic sustainability or intergenerational equity entails maintaining social well-being by decisions about investments in different types of assets. Under certain conditions, consumption can be sustained by depleting resources, or various kinds of natural capital, while building up other kinds of capital. Theoretically, the choices involve the use of a set of accounting prices. The question becomes one of finding and implementing accounting prices that express the roles of the various capital goods in achieving the objective of the economy.Hartwick's rule holds that an economy can be sustained if the value of the total, net investment in the economy, evaluated at those accounting prices, is zero. The rule applies to a special, abstract economic model which expresses a social objective different from the discounted-utilitarian objective on which national accounting is based. Different objectives give rise to different accounting prices. Because the prices may not be right, the zero net-investment rule using available national-accounting prices cannot generate a condition for sustaining an economy.Still, environmental accounting is a tool which, used prudently, can make an important contribution to social decision-making. This paper expands upon these ideas by discussing the incorporation of natural resource and intangible environmental costs and benefits into green accounting at the firm as well as the economy level. Common techniques of mine valuation and standard corporate accounting are the bases for this extension to the valuation of and accounting for decisions concerning the environment.     

Mining and sustainable development: considerations for minerals supply

Sustainable development involves meeting the needs of human societies while maintaining viable biological and physical Earth systems. The needs include minerals: metals, fuels, industrial and construction materials. There will continue to be considerable demand for virgin mineral resources, even if levels of recycling and efficiency of use are optimal, and rates of population growth and globalisation decrease significantly. This article aims to stimulate debate on strategic issues for minerals supply. While the world has considerable stocks of mineral resources overall, international considerations of the environmental and social aspects of sustainable development are beginning to result in limitations on where mining will be conducted and what types of deposits will be mined. Current and emerging trends favour large mines in parts of the world where mining can be conducted within acceptable limits of environmental and social impact. Finding new deposits that meet such criteria will be all the more challenging given a disturbing global decline in the rate of discovery of major economic resources over the last decade, and the decreasing land area available for exploration and mining.
To attract responsible exploration and mining, governments of mining nations will need to provide: regional-scale geo-scientific datasets as required to attract and guide future generations of exploration; resource access through multiple and sequential land use regimes, and frameworks for dealing with indigenous peoples' issues; and arrangements for consideration of mining proposals and regulation of mines that ensure responsible management of environmental and social issues.
The minerals industry will need to continue to pursue advances in technologies for exploration, mining, processing, waste management and rehabilitation, and in public reporting of environmental and social performance.     

Policies towards proposals for large-scale natural resource projects: Attenuation versus postponement

The authors examine the problem of dealing with the environmental impact of uranium mining in Australia and consider its wider implications. Government, faced with unknown environmental and social damage from the initiation of uranium mining in northern Australia, has initiated an environmental impact assessment procedure. This requires the appellant company to provide information about the proposed project and its alternatives and is often followed by a period of ‘postponement’. This is compared with an alternative procedure, ‘attenuation’, allowing the project to proceed on a reduced scale in order to obtain information. Comparisons are made between the information which might be obtained by the two alternative procedures and the expected relative benefits and costs from a postponed project and an attenuated project.     

Environmental regulation of exploration and mining operations in Asian countries

This paper offers a new perspective on the environmental laws in Asian nations affecting the exploration, mining, and reclamation activities of the mineral resource industry: the perspective of the senior government officials in those countries, whose job is to enforce these new environmental laws. The article presents the results of a 1998 survey of national environmental officials in Asia conducted by the Colorado School of Mines and the Metal Mining Agency of Japan. Officials in 10 diverse countries—Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Mongolia, Philippines, Thailand and Vietnam—responded to a detailed questionnaire covering applicable laws, agencies, protected areas, covered mineral activities, financial assurance, environmental impact assessment, public involvement, environmental standards, permit and reclamation requirements.
The survey confirms that Asian nations are part of the global trend towards national government regulatory structures that balance mineral development objectives with environmental considerations. The survey also shows developing regulatory systems (some embryonic, some more mature) utilizing a combination of mining and environmental acts, and often an 'insider' perspective of the national officials administering the laws. While that perspective is not without its biases (not least the rigor of enforcement), it may nevertheless be of use in company planning. The emerging regulatory picture contradicts the conventional notion that it is the 'lower' level of regulation in Asia that is attracting foreign direct investment in mining.