A mineral commodity life-cycle?: Relationships between production,price and economic resources

The production, price and economic resources profiles of a number of mineral commodities are examined and consideration is given to the theory that such profiles can be related to one another within the framework of a life-cycle model of development. While the behaviour of some of the commodities examined appears to lend support to the theory, that of others reveals fundamental problems with its underlying assumptions. It is concluded that, while the demand for a mineral commodity in specific uses may indeed manifest cyclical tendencies, as a general behavioural theory and as a basis for resource estimation the life-cycle model applied to minerals is of little value.     

Gold demand and supply

Western mine production of gold has been declining in the past five years — at the same time as the price of gold has risen dramatically. Predictions of a continued high demand for gold and the current US interest in adopting some form of ‘gold standard’ have focused attention on the supply of new gold. This paper discusses the structure of gold supply and demand, the present pattern of production of new gold and the possible effect of future price changes on Western gold mine production in the 1980s.     

Reply: Investor demand and spot commodity prices

In a recent article (Tilton, Humphreys, and Radetzki, 2011), Tilton et al. argue that even when investor stocks are declining an increase in investor demand can cause a commodity's price to rise. They contend that this conclusion, which is based on two hypothetical examples, is both contrary to conventional wisdom and counter-intuitive. In my comment on the article (Olle Östensson, 2011), I challenged this finding. In a reply to my article, Tilton et al. maintain that their original finding is valid: investor demand can be driving commodity prices higher even when stocks are falling. In my present reply, I contend that their argument with respect to the first example confuses the actions of a minority of investors with those of all investors and is well accommodated within the framework of traditional theory. I further argue that their second example rests on an assumption regarding investor behavior that is unproven and that in any case falls outside the framework of analysis of futures markets.     

Investor demand and spot commodity prices: Reply

In a recent article (Tilton et al., 2011), we argue that even when investor stocks are declining an increase in investor demand can cause a commodity's price to rise, a conclusion that is both contrary to conventional wisdom and counter-intuitive. In his comment on our article, Olle Östensson (2011) challenges this finding. After assessing his concerns in this reply, we maintain that our original finding is valid: investor demand can be driving commodity prices higher even when investor stocks are falling.     

The role of the CMEA's foreign trade monopolies in mineral markets

The business rationality of the CMEA mineral traders is bound by several characteristics of mineral production under central planning and by the mechanics of foreign trade monopoly. These characteristics include aspects such as: priority of national economic goals over trading strategies of the Foreign Trade Organisations (FTOs) in Eastern Europe; balance-of-payment problems; the organizational complexities and the weakness of the incentive mechanism, as well as the lack of an appropriate performance criterion. It is suggested that the 30 mineral trading FTOs in the CMEA tend to perform in a manner comparable to marketing departments of the Western mineral industries but are at a clear disadvantage when compared with ‘stand alone’ Western intermediaries making profits through risk taking and abhoring bureaucracy and rigidity in management.     

Economic incentives for tropical forest preservation: Why and how?

Scholars and environmentalists in the industrialized nations have repeatedly deplored the destruction of tropical forests as a byproduct of economic development. Their position is based upon scientific, economic, and ethical arguments. Proponents of economic development from the tropical nations recognize that its immediate benefits are enjoyed by their own relatively poor populations while the benefits of habitat preservation are enjoyed by the world as a whole. So far, few institutional mechanisms have been developed that can reconcile the competing perspectives. In addition to reviewing the arguments in favor of and against habitat preservation, this paper proposes some innovative institutions that can both satisfy developmental aspirations and account for the global benefits of habitat preservation.     

Optimal stabilization of the copper market: The problem of information

This paper investigates the scope for stabilizing commodity prices by buffer stock interventions. Optimal control is used, rather than simulation, to evaluate the scope for intervention at best. Applications to a world copper market model show that substantial but extensive gains to stabilization are possible. These gains cannot be realised by traditional bandwidth decision rules. An important difficulty is setting the level at which prices should be stabilized. The lack of this information severely reduces the achievable gains.     

International commodity agreements: The role of consuming nations

Consuming nations and industry segments within them play a crucial role in the success of commodity agreements. For individual firms the desirability of the agreements is seen to depend on the form of the agency agreement and the competitive position of the firm in both the domestic and world market. Both the benefits and costs to producing and consuming nations are analysed. The mechanism of the agreements is analysed as well as the problems that lead to their limitation or termination.     

Futures markets and economic efficiency: A theoretical perspective

This article examines the role of futures markets in schieving economic efficiency. The question is introduced in a timeless, certain framework, and extended to the case where time, but not uncertainty, becomes important: it is shown that in such a framework futures markets ensure economic efficiency. Uncertainty is then introduced, and it is shown that contingent markets ensure full efficiency, but that these are cumbersome; it is also shown that futures markets, as an alternative, ensure approximate efficiency. An appendix explores more formally the relation between markets and efficiency.     

Economic Incentives to Conserve Wildlife on Private Lands: Analysis and Policy

Some believe that provision of private property rights in wildlife on private land provides a powerful economic incentive for nature conservation because it enables property owners to market such wildlife or its attributes. If such marketing is profitable, private landholders will conserve the wildlife concerned and its required habitat. But land is not always most profitably used for exploitation of wildlife, and many economic values of wildlife (such as non-use economic values) cannot be marketed. The mobility of some wildlife adds to the limitations of the private-property approach. While some species may be conserved by this approach, it is suboptimal as a single policy approach to nature conservation. Nevertheless, it is being experimented with, in the Northern Territory of Australia where landholders had a possibility of harvesting on their properties a quota of eggs and chicks of red-tailed black cockatoos for commercial sale. This scheme was expected to provide an incentive to private landholders to retain hollow trees essential for the nesting of these birds but failed. This case and others are analysed. Despite private-property failures, the long-term survival of some wildlife species depends on their ability to use private lands without severe harassment, either for their migration or to supplement their available resources, for example, the Asian elephant. Nature conservation on private land is often a useful, if not essential, supplement to conservation on public lands. Community and public incentives for such conservation are outlined.     

Economic and Ecological Rules for Water Quality Trading1

Horan, Richard D. and James S. Shortle, 2011. Economic and Ecological Rules for Water Quality Trading. Journal of the American Water Resources Association (JAWRA) 47(1):59‐69. DOI: 10.1111/j.1752‐1688.2010.00463.x Abstract: Emissions trading in textbook form uses markets to achieve pollution targets cost‐efficiently. This result is accomplished in markets that regulators can implement without knowing pollution abatement costs. The theoretical promise of emissions trading, along with real‐world success stories from air emissions trading, has led to initiatives to use trading for water pollution control. Yet, trading, particularly when it involves nonpoint sources of pollution, requires significant departures from the textbook concept. This paper explores how features of water quality problems affect the design of markets for water pollution control relative to textbook emissions markets. Three fundamental design tasks that regulators must address for pollution trading to achieve an environmental goal at low cost are examined: (1) defining the point and nonpoint commodities to be traded, (2) defining rules governing commodity exchange, and (3) setting caps on the commodity supplies so as to achieve an environmental target. We show that the way in which these tasks are optimally addressed for water quality markets differs significantly from the textbook model and its real‐world analogs. We also show that the fundamental appeal of emissions trading is lost in the case of realistic water quality markets, as market designs that reduce the costs of achieving water quality goals may no longer be implementable without the regulatory authority having information on abatement costs.     

The implementation of wood waste ash as a partial cement replacement material in the production of structural grade concrete and mortar: An overview

The timber manufacturing and power generation industry is gradually shifting towards the use of biomass such as timber processing waste for fuel and energy production and to help supplement the electrical energy demand of national electric gridlines. Though timber processing waste is a sustainable and renewable source of fuel for energy production, the thermal process of converting the aforementioned biomass into heat energy produces significant amounts of fine wood waste ash as a by-product material which, if not managed properly, may result in serious environmental and health problems. Several current researches had been carried out to incorporate wood waste ash as a cement replacement material in the production of greener concrete material and also as a sustainable means of disposal for wood waste ash. Results of the researches have indicated that wood waste ash can be effectively used as a cement replacement material for the production of structural grade concrete of acceptable strength and durability performances. This paper presents an overview of the work carried out by the use of wood waste ash as a partial replacement of cement in mortar and concrete mixes. Several aspects such as the physical and chemical properties of wood waste ash, properties of wood waste ash/OPC blended cement pastes, rheological, mechanical and the durability properties of wood waste ash/OPC concrete mix are detailed in this paper.     

Commodity booms and their impacts on the Western Australian economy: The iron ore case

Western Australia is a resource-rich province. Since the 1890s, resources booms have played a key role in the development of the state's economy. In the last few years, Western Australia's resources industry has continued to enjoy exceptional conditions created by strong international demand for commodities. This paper aims to examine the likely impact of this commodity boom in the iron ore sector on the Western Australian economy, using a general equilibrium approach. The modeling results indicate that the Western Australian economy will benefit from the expansion in iron ore exports and investment in terms of rising consumption and employment, although at the industry level there will be losers as well as winners.     

Petrochemical markets in the UK: Methodological aspects of assessing future demand

This article focuses on how input-output techniques could be applied to study the petrochemical industry in general and plastics materials in particular. The theory serves as a tool for understanding the operations of the industry and, therefore, allows for a better control and organization of its development process.     

Jobs and the environment: An overview

This paper provides an overview of economic research on the relationship between environmental protection and employment. The paper addresses, first, the impact of existing regulation on overall employment rates, shutdowns and layoffs, and regulation-induced capital flight from developed countries. Second, the paper provides a framework for evaluating claims that, over the longer run, environmental protection measures will boost overall employment and provide the foundation for a robust, sustainable economy.     

EU sustainable development indicators: An overview

The European Union's commitment to sustainable development at the 1992 Earth Summit resulted in an EU‐wide sustainable development strategy, adopted in Gothenburg in 2001. This article presents an overview of the set of sustainable development indicators (SDIs) recently adopted by the European Commission to monitor, assess and revise the strategy. It provides a critical assessment of the current status of the indicator set, and reviews the main policy trends in the areas of the strategy through a brief analysis of headline indicators, placing energy and climate change issues in a broader perspective. Finally, the article compares the energy SDIs to the recent inter‐agency energy indicators for sustainable development (EISD), underlining their similarities as well as their different priorities and objectives. The article concludes that further research is needed to improve the SDI set and further explore the linkages between themes.     

Bilateral Monopoly: A Market for Intercountry River Water Allocation

/ Collaboration of countries with an aim to share fresh surface water resources promises to generate potential joint benefits. Unfortunately, existing agreements lack the perspective and capacity to produce any real action in efficient cross-border water allocation. When that problem is encountered by any two adjacent countries claiming riparian rights to the same watercourse, this paper suggests that apossible solution to be examined is a water market. This market requires the relevant countries to engage in a bargaining process as described in the theory of bilateral monopoly. The bargaining process should determine both the water quantity to be transferred and the price to be paid. However, there has to be a fair allocation of the joint benefits resulting from the transfer for a sustainable price solution. As an empirical illustration, the paper examines the case of river Nestos shared by Bulgaria and Greece in the southern Balkans. A net revenue function quadratic in water is specified and estimated using scarce data on three agricultural crops in Greece. Sensitivity analysis on the size and distribution of the net benefits is also performed.KEY WORDS: Bilateral agreements; Water markets; Efficient allocation     

Microbial remediation of nitro-aromatic compounds: an overview

Nitro-aromatic compounds are produced by incomplete combustion of fossil fuel or nitration reactions and are used as chemical feedstock for synthesis of explosives, pesticides, herbicides, dyes, pharmaceuticals, etc. The indiscriminate use of nitro-aromatics in the past due to wide applications has resulted in inexorable environmental pollution. Hence, nitro-aromatics are recognized as recalcitrant and given Hazardous Rating-3. Although several conventional pump and treat clean up methods are currently in use for the removal of nitro-aromatics, none has proved to be sustainable. Recently, remediation by biological systems has attracted worldwide attention to decontaminate nitro-aromatics polluted sources. The incredible versatility inherited in microbes has rendered these compounds as a part of the biogeochemical cycle. Several microbes catalyze mineralization and/or non-specific transformation of nitro-aromatics either by aerobic or anaerobic processes. Aerobic degradation of nitro-aromatics applies mainly to mono-, dinitro-derivatives and to some extent to poly-nitro-aromatics through oxygenation by: (i) monooxygenase, (ii) dioxygenase catalyzed reactions, (iii) Meisenheimer complex formation, and (iv) partial reduction of aromatic ring. Under anaerobic conditions, nitro-aromatics are reduced to amino-aromatics to facilitate complete mineralization. The nitro-aromatic explosives from contaminated sediments are effectively degraded at field scale using in situ bioremediation strategies, while ex situ techniques using whole cell/enzyme(s) immobilized on a suitable matrix/support are gaining acceptance for decontamination of nitrophenolic pesticides from soils at high chemical loading rates. Presently, the qualitative and quantitative performance of biological approaches of remediation is undergoing improvement due to: (i) knowledge of catabolic pathways of degradation, (ii) optimization of various parameters for accelerated degradation, and (iii) design of microbe(s) through molecular biology tools, capable of detoxifying nitro-aromatic pollutants. Among them, degradative plasmids have provided a major handle in construction of recombinant strains. Although recombinants designed for high performance seem to provide a ray of hope, their true assessment under field conditions is required to address ecological considerations for sustainable bioremediation.     

The Assessment of Water Resources Projects Involving Economic, Social and Environmental Costs and Benefits: The World Bank's View

In evaluating the costs and benefits of water resources development projects, the World Bank examines the economic, social and environmental aspects of the project. Some of these aspects are more easily quantified than others. The paper reviews some aspects that have been quantified by the Bank and describes others which have not. By way of illustrating the difficulty of quantification, the Bank's efforts to quantify the health hazards resulting from the introduction of irrigation projects is examined. In addition, the Bank's requirements with respect to social and environmental factors as they affect water resources projects are described.