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     

Economic use value of the Belize marine ecosystem: Potential risks and benefits from offshore oil exploration

The announcement of plans for exploratory oil drilling at a number of offshore sites in Belize raised concerns about the risks associated with drilling, particularly given the socio‐economic importance of the marine ecosystem. The current economic value of fisheries and marine ecotourism is estimated, along with the potential revenue from offshore oil and potential economic losses stemming from oil pollution, under various assumptions on risk and uncertainty. Marine fisheries and ecotourism are estimated to generate around US$ 183 million per year. Single‐year estimated maximum revenue is higher for oil extraction initially but quickly declines; during a 50 year (two generation) period, total discounted benefits from marine fisheries and ecotourism are estimated at US$ 5.1 billion, compared to US$ 3.2 billion from offshore oil revenue. Following a hypothetical oil spill, discounted losses in marine fisheries and ecotourism due to perception and ecological impacts are estimated at US$ 912 million, with clean‐up costs and capital losses of US$ 6.1‐10.4 billion. Considering the short extraction life of oil resources compared to fisheries and ecotourism, the difference in benefits increases substantially in favour of the latter with a longer time horizon. A recent public referendum resulted in a 98% vote against oil exploration and a subsequent annulment of oil concessions pending environmental impact assessments.     

Applying the principle of sustainability to coastal sand mining: The case of Pakiri-Mangawhai Beach,New Zealand

The purpose of New Zealand's Resource Management Act (1991) is to promote the sustainable management of natural and physical resources. Coastal sand mining may be consistent with this purpose where: (1) extractions occur from sediment systems open to inputs of sediment, and the volumes extracted do not limit the natural development, physical characteristics, and ecological diversity of the coastal environments affected; or (2) extractions from palimpsest or relict sedimentary deposits occur at a rate where the rate of extraction is insignificant compared with the volume of the resource. The response of coastal sand mining companies and consent-granting authorities to the requirements of the Resource Management Act (1991) are examined with respect to recent applications to mine sand from a coastal sand body in the Hauraki Gulf, New Zealand. The assessments of environmental effects (AEE) submitted in support of these applications do not establish the sustainability of the sand mining operations. Specifically they do not define the dimensions of the active sediment system, quantify the volume of the related resource, or state the period within which sustainability is achievable. Further, the AEE do not consider the cumulative effects of the extractions, either in terms of the total volume of sand mined or the cumulative effects of different anthropogenic activities. The test of sustainability demands a quality of information and understanding of coastal systems that is well beyond that obtained in the past or accepted at present. There is a clear need for New Zealand's resource management legislation to be supplemented by technical guidelines that help ensure the test of sustainability is rigorously applied.     

Tax neutrality and the Saskatchewan Uranium Royalty

In their analysis of the Saskatchewan Uranium Royalty (SUR) scheme Anderson and Barnett (1983) conclude that the scheme is effective in that, together with the other levies on the uranium industry, it succeeds in appropriating 75–80% of available economic rent under reasonable assumptions about uranium price and production costs. While collecting a substantial proportion of economic rent was a major provincial government objective in designing the tax structure, provincial tax planners may also have been concerned to ensure that marginal production decisions be affected as little as possible by the tax. Because their model of the Key Lake mine considers only the extraction plan adopted by the firm, Anderson and Barnett are unable to conclude whether a different plan would have been adopted in the absence of the tax. In other words, the nature of their model confines their investigation to the question of effectiveness, as defined above. The purpose of the present article is to examine the question of whether the SUR is likely to be neutral with respect to the extraction plan and to assess the effects of any tax-induced distortion.     

Incentive pricing and cost recovery at the basin scale

Incentive pricing programs have potential to promote economically efficient water use patterns and provide a revenue source to compensate for environmental damages. However, incentive pricing may impose disproportionate costs and aggravate poverty where high prices are levied for basic human needs. This paper presents an analysis of a two-tiered water pricing system that sets a low price for subsistence needs, while charging a price equal to marginal cost, including environmental cost, for discretionary uses. This pricing arrangement can promote efficient and sustainable water use patterns, goals set by the European Water Framework Directive, while meeting subsistence needs of poor households. Using data from the Rio Grande Basin of North America, a dynamic nonlinear program, maximizes the basin's total net economic and environmental benefits subject to several hydrological and institutional constraints. Supply costs, environmental costs, and resource costs are integrated in a model of a river basin's hydrology, economics, and institutions. Three programs are compared: (1) Law of the River, in which water allocations and prices are determined by rules governing water transfers; (2) marginal cost pricing, in which households pay the full marginal cost of supplying treated water; (3) two-tiered pricing, in which households' subsistence water needs are priced cheaply, while discretionary uses are priced at efficient levels. Compared to the Law of the River and marginal cost pricing, two-tiered pricing performs well for efficiency and adequately for sustainability and equity. Findings provide a general framework for formulating water pricing programs that promote economically and environmentally efficient water use programs while also addressing other policy goals.     

Assessing the costs for adaptation of marine constructions to sea-level rise

Marine constructions are highly vulnerable to climate change and sea-level rise (SLR), leading to increased risk rates of destruction and the potential closure of ports, harbors, and marinas along the coast. We present a cost-adjustment analysis for such constructions along the south-eastern Mediterranean coast, which takes into account the physical characteristics of the constructions, and environmental uncertainty factors. At 0.5 m SLR, the estimated adjustment cost is USD 280 million, and at 1 m SLR, the estimated cost is USD 505 million. These costs are equivalent to 0.091% and 0.165% of the Israeli gross domestic production, respectively. Although high, these adjustment costs are lower than the costs of future damage that will accrue if we fail to act. This implies that the adaptation-policy approach to controlling for the risk of SLR will provide benefits to the economic marine sectors and the public at large.     

South African gold mining taxation : An example of a resource rent tax

Theoretically, a resource rent tax is neutral in that it does not influence the allocation of resources. However, the application of such fundamental principles in the tax formula of the South African gold mining industry negates the neutrality principle. A progressive element in the tax rate encourages mining of submarginal ores - leads to misallocation of resources. However, it substantially reduces the financial risks of a mining company engaged in the extraction of a commodity characterized by price volability, such as gold, and permits economies of scale in mining and encourages conservation of a non-renewable resource. As long as prices increase faster than costs, the advantages of this system probably exceed the disadvantages. The choice of the threshold rate in such a tax system is critical. If it is too high it will encourage mining of submarginal ores, and if too low it does not recognize the peculiar risks of gold mining investments.     

Application of non-market valuation to the Florida Keys marine reserve management

The quality of the coral reefs in the Florida Keys is essential to sustain nature-based tourism in the Keys. The recently established marine reserves (MR) are expected to improve the reef environment, particularly coral and fish abundance and diversity. In this paper, a combined model of travel cost and contingent behavior was estimated in order to measure the non-market recreational benefits of reef quality improvements. The results indicated that an average visitor would undertake 43-80% more number of trips to the Florida Keys and experience a 69% increase in the use values per trip, as a result of the MR-induced reef quality improvements. The above non-market value estimates were further applied to evaluating alternative management proposals for funding the MR program. It was found that the annual management costs of the MR program would constitute an insignificant portion--only around one to 2%--of the annual recreational benefits that the MR would generate. The results provide a strong economic justification for designing user-based funding mechanisms in order to make the MR program self-sustaining in the future.     

Mine size optimization using marginal analysis

In this study, a model to estimate the optimum mine size is developed. The model is developed on the basis of marginal analysis. The model solves for the production rate at which the present value of marginal costs equals the present value of marginal revenues—the rate that microeconomic theory shows will maximize the net present value of production from the mine.In addition, the article discusses the effects on the optimum production rate of: the physical characteristics of the deposit, economic factors, and financial factors. It has been found that, not surprisingly, as the reserve tonnage increases, the optimum mine size increases. Also, the optimum production rate increases as the ore grade increases. A direct relationship has been found between the mineral price and the optimum production rate. The optimum mine size is found to be inversely related to the expected growth rate of mineral price, while it is directly related to the expected growth rate of mining costs. A concave relationship has been found between the cost of capital and the optimum mine size.     

Project appraisal and planning for overdeveloped countries: I. The costing of nonrenewable resources

In cost-benefit analysis, natural resources, like other factors of production, should be costed as a mixture of marginal social cost of exploiting additional resources and lost marginal social benefit of forgone alternative uses, according to the way in which extra resources are made available to a project. For a nonrenewable resource, changes in future marginal social cost and marginal social benefit are likely to add significantly to the immediate elements of cost, as successively less tractable resource stocks are exploited. Of the several reasons given for ignoring these future costs, the most plausible is that technological advance justifies a heavy discount on the future. However, neither historical nor logical arguments demonstrate the inevitability of efficacious technological advance.     

Sustainability of fisheries through marine reserves: a robust modeling analysis

Among the many factors that contribute to overexploitation of marine fisheries, the role played by uncertainty is important. This uncertainty includes both the scientific uncertainties related to the resource dynamics or assessments and the uncontrollability of catches. Some recent works advocate for the use of marine reserves as a central element of future stock management. In the present paper, we study the influence of protected areas upon fisheries sustainability through a simple dynamic model integrating non-stochastic harvesting uncertainty and a constraint of safe minimum biomass level. Using the mathematical concept of invariance kernel in a robust and worst-case context, we examine through a formal modeling analysis how marine reserves might guarantee viable fisheries. We also show how sustainability requirement is not necessarily conflicting with optimization of catches. Numerical simulations are provided to illustrate the main findings.     

Environmental and socioeconomic impacts of cobblestone quarries in Addis Ababa and implication for resource use efficiency,environmental quality,and sustainability of land after‐use

The extraction of construction material in Addis Ababa has been a source of public conflict for many years, especially in terms of quarry operation, displacement of people, rehabilitation of quarry sites, and land after‐use. One of the main reasons for the conflict has been the extraction sector's inability to adjust to the existing laws. This paper reports the findings of a study undertaken to assess the environmental and socioeconomic impacts of quarry mining in Addis Ababa, Ethiopia, and it prescribes interventions that can assist in mitigating the negative impacts of mining. Marked operational, environmental, and socioeconomic impacts have occurred as a result of cobblestone quarrying in Addis Ababa. Improvements in the mitigation of these impacts can be achieved if quarrying operations are planned prior to commencement; resource‐efficient and sustainable mining techniques are employed; stakeholder participation is enhanced; the government provides institutional, organizational, and technical support to the operators; regulations are improved and regulatory implementations receive strict follow‐up; and the provision of the Ethiopian constitution's regarding “rights to development” is respected.     

The pricing of water services in developing countries

This paper focuses on improving efficiency in the water and sewerage sectors through long-run marginal cost pricing, adjusted for financial needs, externalities, second best considerations, lifeline tariffs and cross subsidization within an integrated water resource planning (IWRP) framework. Supply efficiency suggests that for a given price structure, an optimal long-run investment plan and a corresponding level of supply quality should be determined which maximizes net social benefits. Supply efficiency also requires efficient operation of the water system, including optimization of losses.     

A conceptual approach to model sand–gravel extraction from rivers based on a game theory perspective

Sand–gravel mining is a significant parameter of economic development and social welfare function in modern societies. As demand for aggregate increases in construction industry, conflicts for the availability of the resource and environmental impacts become more intense. The present paper describes the contested status quo in riverbed sand–gravel mining activities with an example from Greece, as a case study. The scope is to propose a methodology about good governance of the mining sector that promotes a sustainable sharing of aggregate resource by securing environment and safekeeping revenues in the mining trade market.     

Nature-based marine tourism in the Gulf of California and Baja California Peninsula: Economic benefits and key species

Ecotourism can incentivize social and environmental benefits through marine conservation, in parallel with efforts to better manage fisheries, coastal development, and other human pressures. In Mexico's Gulf of California and Baja California Peninsula (GCBP), marine ecosystems support tourism activities in many communities, but to date there have been no region-wide studies to estimate their benefits or identify key species. Based on data collected in this study, each year nature-based marine tourism in the GCBP results in 896,000 visits, US$518 million in expenditures and at least 3,575 direct jobs from formal operations. In interviews with operators, over 40 species groups were named as important; sea lions, whale sharks, whales, and marlin were the highest ranked, highlighting the importance of ecosystem-wide health for nature-based tourism sustainability. Local employment and the ability to make economic and conservation goals compatible were noted by operators as significant opportunities provided by nature-based marine tourism; challenges included pollution and declines in ecosystem health, a lack of infrastructure, poor resource management policies, and high operating costs. As nature-based marine tourism expands, a wider transition to true ecotourism, a focus on equitable benefits and collaboration between stakeholders and a cross-scale and ecosystem approach to management will be vital for achieving potential sustainable social, ecological and economic benefits.     

Survey of issues in government policy and public management of state oil and mining companies in developing countries

The author has identified a number of structural policy issues which adversely affect public sector enterprises involved in natural resource extraction. It is held that the various interactions between government policy and public management have created severe cross currents which impede the efficient and cost-efficient operation of these entities. This tends to promote a culture which encourages excessive production at the risk of premature exhaustion of the resource and diverts scarce development capital into marginal increments of production at the expense of other sectors of the economy. This transient influx of money is said to encourage overconsumption. The author does not recommend any facile solutions. The circumstances vary from country to country, as do the remedies. Policy and structural reforms can and have made a difference in specific instances and examples are cited of where improvements have been made.     

Using discrete choice experiments to assess the preferences of new mining workforce to commute or relocate to the Surat Basin in Australia

Two choice modelling experiments have been used to examine how residents of a major urban centre would consider commuting or relocation options if they were to consider taking up employment in a rapidly growing resource region. The case study area focused on the Surat Basin in southern Queensland where recent increases in mining activity involve both coal mining and coal seam gas extraction. The preferences of residents of Brisbane, the state capital and closest major centre to the Surat Basin, were assessed in the experiment. The results identified increased salary as the most important factor, but respondents were also concerned about potentially offsetting influences such as high living costs and accommodation affordability/availability. Respondents indicated that the additional salary needed to take up employment in the Surat Basin was substantially higher for relocation options than for FIFO options.     

Industrial ecology and water utilization of the marine chemical industry: A case study of Hai Hua Group (HHG), China

The marine chemical industry is a chemical industry based on coastal advantage. The Chinese government attaches great importance to the marine industry and made it the focal point of China economy in the 12th five-year plan. Water is an important material for the marine chemical industry, but wastewater discharge could undermine the sustainable development of the marine chemical industry. Industrial ecology provides insights for industry to realize a harmonious development with the environment. This paper examined the case of water utilization practice based on industrial ecology of the Hai Hua Group (HHG) in China. The utilization of three kinds of water, i.e., underground brine, seawater and freshwater is characteristic of the industrial ecology implementation of the HHG. In this paper, the water utilization practice of the HHG was described. The relationships among the three kinds of water, the driving force of water utilization, and the challenges of water utilization in the HHG were discussed. We conclude that implementing industrial ecology is a promising choice for the water utilization of marine chemical industry. It could also achieve the coordinated development between sea farming and the marine chemical industry. For non-renewable resource driven regional industrial ecosystems, such as the Hai Hua industrial ecosystem (HHIE) in this paper, seeking a substitute approach is essential for the stable and sustainable development of the whole industrial ecosystem. We also conclude that an industrial ecosystem's operation is driven by the integration of many factors, such as government, market, policy, culture and technique in this paper. This requires us to examine an industrial ecosystem's operation from a wider perspective, which is helpful to comprehensively and systematically understand the impetus of an industrial ecosystem.     

Compliance of Australian threatened species recovery plans with legislative requirements

Recovery plans are the main documents supporting management decision-making for threatened species. We evaluated Australian recovery plans to assess their appropriateness as conservation and management planning instruments. Six legislative requirements (species information and general requirements, species distribution and location, known and potential threats, objectives, performance criteria and actions, duration of the plan, and estimated costs of plan implementation) were used to assess the degree of compliance of recovery plans with the relevant legislation. We assessed all 236 official recovery plans which had been adopted as at January 2006. The results showed that plans were most compliant regarding the setting of objectives, performance criteria, recovery actions, and duration of plan. Most plans included a single performance criterion that was generally related to the population status of target species. Improvement is required in relation to identification of current threats and critical habitats, and the establishment of basic elements of monitoring and evaluation for measuring recovery progress. Gaps in ecological information are the main factors affecting adequate compliance with legislative requirements as opposed to managerial information (e.g. clarity in establishing the implementation schedule, costs and resource allocation). Planning deficiencies could be addressed by improving the recovery planning guidelines and more carefully reviewing the drafting and adoption of new plans.     

Measurement of the scarcity of soil in agriculture

The paper defines the concept of land degradation and costs and effects of soil erosion. Through the concept of optimal levels of soil erosion, a conceptual model of the social costs of soil degradation is elaborated. The discussion focuses on the measurement aspects of the economic scarcity of soil in the agriculture sector. Reliable estimates of the true impacts of soil degradation can only be made if data on marginal damage costs and marginal conservation costs are available. The different scarcity indicators are evaluated and competitive land rental prices are considered as appropriate in indicating soil scarcity in agriculture.