Indonesia's mineral resources: Performance and prospects

This paper discusses the present position and future prospects of mineral exploration and exploitation in Indonesia. It places the industry within the economic and political context of the country as a whole and considers the development of government policy towards the sector. Although the mineral resources of Indonesia are believed to be vast, the performance of the industry in the past has been erratic. The relative political stability of the last few years, combined with rising prices, has encouraged the opening up of new mines, and has also emphasised the need for more local processing of those minerals that are produced. At present, income from oil provides most of the government revenue and consequently the prospects of this sector are critically important for the nation's future. Increased diversification can, however, be expected in the next few years as the resources of tin, bauxite, nickel, copper, coal and many other products are developed. Given a favourable political and economic climate, Indonesia could be one of the world's major mineral producers by the end of the century.     

TMDL Implementation in Agricultural Landscapes: A Communicative and Systemic Approach

Increasingly, total maximum daily load (TMDL) limits are being defined for agricultural watersheds. Reductions in non-point source pollution are often needed to meet TMDL limits, and improvements in management of annual crops appear insufficient to achieve the necessary reductions. Increased adoption of perennial crops and other changes in agricultural land use also appear necessary, but face major barriers. We outline a novel strategy that aims to create new economic opportunities for land-owners and other stakeholders and thereby to attract their voluntary participation in land-use change needed to meet TMDLs. Our strategy has two key elements. First, focused efforts are needed to create new economic enterprises that capitalize on the productive potential of multifunctional agriculture (MFA). MFA seeks to produce a wide range of goods and ecosystem services by well-designed deployment of annual and perennial crops across agricultural landscapes and watersheds; new revenue from MFA may substantially finance land-use change needed to meet TMDLs. Second, efforts to capitalize on MFA should use a novel methodology, the Communicative/Systemic Approach (C/SA). C/SA uses an integrative GIS-based spatial modeling framework for systematically assessing tradeoffs and synergies in design and evaluation of multifunctional agricultural landscapes, closely linked to deliberation and design processes by which multiple stakeholders can collaboratively create appropriate and acceptable MFA landscape designs. We anticipate that application of C/SA will strongly accelerate TMDL implementation, by aligning the interests of multiple stakeholders whose active support is needed to change agricultural land use and thereby meet TMDL goals.     

Determining the optimal tax on mining

This article examines three arguments often raised in support of higher taxes on mining and finds them wanting: First, the wealth or economic rents associated with particularly rich deposits rightfully belong to the citizens of the host country. Second, mining companies should compensate the State and the public for their use of mineral resources, given the intrinsic value arising from their non‐renewable nature. Third, the division of the wealth created by mining is unfair. Too much goes to mining companies, and too little to the host country to promote economic development. It suggests instead that host governments should maximize the net present value of the social benefits flowing from their mineral sector. In practice, unfortunately, it is often difficult to know whether this objective is served by raising or lowering the level of taxation on mining.     

Natural resource abundance in Nigeria: From dependence to development

There are several strategies open to an economy in its attempt to attain sustainable economic development depending on its historical background and resource endowment. One of such is the resource-led strategy. Nigeria is superabundantly rich in crude oil and has reaped billions of petrodollars. However, the country seems to be facing the problem of successfully translating this huge oil wealth into sustainable development. This paper employs the vector error-correction methodology in examining the long-run impact of the huge oil wealth accruing to Nigeria on its economic development. Indicators such as per capita GDP (PGDP), household consumption, infrastructural development (electricity), and agricultural and manufacturing output growth rates are examined. The results suggest a significant positive long-run impact of per capita oil revenue on per capita household consumption and electricity generation, while a negative relationship is established for GDP, agriculture and manufacturing. Even for those variables with negative relationship at current period, there exist positive relationships at subsequent lags. Thus, oil revenue, if properly managed and invested, could be effectively used to induce oil-led development in Nigeria provided the current inhibitions of corruption, lack of transparency, accountability and fairness in its use and distribution are removed.     

The use of economic measures for water management in France

The aim of this paper is to show some aspects of the practical use of economic measures in the fight against water pollution in France. Twenty years ago, these economic measures were first implemented, and it may be interesting to draw some lessons from the experience. First, the paper presents the principles of water quality management in France established by the Law on Water of 16 December 1964. Second, some examples of factories and local communities facing the problem of fighting water pollution are discussed. Finally, general results and some reflections conclude the paper.     

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.     

The South African mineral and petroleum resources royalty act—Background and fundamental principles

After a prolonged drafting and consultation process, South Africa has introduced a new royalty charge to holders of mineral development rights. Deciding on an acceptable royalty is a complex process, especially when it targets deceptive economic rents. This is achieved with a variable royalty rate that slides in tandem with mine profitability. The base is sales revenue and to compensate for the need to charge for the mineral in its unprocessed form, refined production is charged at a lower rate. The aim of this paper is to discuss the Royalty Act in the context of its background, the underlying theory and fundamental principles. This paper argues that the fundamental principles on which the Act is based are sound, but raises a concern on potentially high compliance and reporting costs.     

Economic and social effects analysis of mineral development in China and policy implications

Mineral development has contributed greatly to China's economic and social development. Many challenges remain, however, including environmental pollution and resource waste in practice, as well as a dearth of systematic theoretical research. The goal of this study is to analyze the economic and social effects of various mineral developments in China from diversified perspectives, so as to provide the basis for the formulation of China's mineral development policy. The input–output effects, industrial linkage effects and income distribution effects of different mining industries are quantitatively analyzed by adopting basic hypotheses of input–output economics, industrial linkage model and income distribution antitheses based on the latest available official data from China Statistical Yearbook from 2004 to 2010 and the 2007 Input–Output Table of China. The empirical results obtained in this study indicate that all mineral development industries, especially coal mining and washing, and petroleum and natural gas extraction industries, have given a strong impetus to the increase of China's fixed asset investment and GDP. Moreover, they have provided a large number of jobs, thereby alleviating ongoing employment pressure, and they have also played a positive role in promoting China's technology investment. The analysis of industrial linkages demonstrates that mining industries are basic to the national economy and produce a significant impetus to its downstream industries, but create weak pull effects in terms of national economic development. From the perspective of income distribution, mining industries play an important role in increasing China's fiscal revenue and per capital income. Hence, China's mineral development policy should (1) encourage additional investment in technology for exploration and development to insure sufficient supply and expand the input effects; (2) attract additional talent to work in remote regions; (3) optimize the industrial structure and promote the industrial transformation in resource regions; (4) adjust the interest distribution between the central and local governments to enable the local regions to become more self-sufficient; and (5) enhance the legal environment so that companies can more readily undertake their social responsibilities voluntarily.     

AGRICULTURAL POLLUTION CONTROL: IMPLICATIONS FROM THE RURAL CLEAN WATER PROGRAM1

ABSTRACT: The Rural Clean Water Program has provided a unique opportunity to study the economics of agricultural nonpoint source pollution control. Several implications for improving the economic efficiency of future agricultural nonpoint source pollution control programs can be drawn from the results. First, individual projects should be targeted towards water bodies that have water quality problems causing economic damages. Considerable variation can exist among areas in the magnitude of economic damages, which may not be proportional to physical impacts. Second, the relative costs and effectiveness of the practices selected to reduce the delivery of pollutants can vary dramatically from one location to another. Early identification and emphasis on cost-effective BMPs can substantially reduce project costs and may make a project economically justifiable that would not otherwise be so. Finally, some projects that do not hive potential economic benefits from water quality improvements exceeding government cost may have on-farm benefits from reduced costs and increased long-term yields that are sufficient to make total benefits (water quality and on-farm) exceed costs.     

A Framework for Geographically Sensitive and Efficient Recycling Networks

This paper has three primary objectives. First, it seeks to demonstrate that recycling is an important component of sustainable human systems, particularly in the case of electronics, where environmental impacts of disposal are potentially severe. Second, it presents a methodology that could be used to estimate the volumes of electronics or other consumer durable goods that are available for recycling. Third and last, it illustrates, through a case study of Atlanta focused on computers, that metropolitan areas may fruitfully be viewed as opportune centres from which to mine, recycle and reuse cast-off electronic goods. From an environmental and economic development policy perspective, doing so presents an important opportunity to provide new economic opportunities in the most distressed portions of metropolitan areas which have been disproportionately impacted by previous environmentally destructive industrialization practices.