Project appraisal and planning for overdeveloped countries: II. Shadow pricing under uncertainty

In the uncertainty that surrounds the future availability of nonrenewable natural resources and the efficacy of technological advance, the economic costing of resources should be undertaken probabilistically. While optimistic assumptions entail little change from the costing procedures used in conventional cost-benefit analysis, even moderately pessimistic assumptions lead to a much increased cost for nonrenewable resources. These lead in turn to a reappraisal of the value of investment and of the cost ascribed to other factors of production. Even when optimistic assumptions are deemed the more plausible, a utility-maximizing evaluation may still give more emphasis to pessimism.     

Social Acceptability of Water Resource Management: A Conceptual Approach and Empirical Findings from Portland,Oregon1

Abstract: Surface water resources in urban areas serve multiple functions ranging from recreation to wildlife habitat. As a result, diverse values influence people’s views about resource protection, potentially leading to conflicting interests. In metropolitan Portland, Oregon, natural resource planning has recently focused on habitat restoration as well as stormwater and pollution mitigation, especially through the protection of riparian areas. Due to opposition over proposed regulations in the study region, this research examines public attitudes about an array of resource management efforts. The primary research question is: what is the extent of positive–negative attitudes about water resource protection, and what theoretical dimensions underlie diverse judgments? After empirical survey results are presented, I outline a conceptual approach for future assessments of environmental attitudes while highlighting important value‐based dimensions of judgments. Although flexible, the framework allows broad comparisons to advance knowledge about the social acceptability of varied water resource management approaches across diverse places and contexts.     

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.     

On natural resource substitution

We present a simple dynamic model to get some key insights about the substitution of renewable for nonrenewable resources and the consequences for sustainability. We highlight the role of the elasticity of substitution (technological component) to determine the adjustment of production as a response to scarcity and growing ability of resources (environmental component). In some cases, the model predicts a smooth substitution of renewable for nonrenewable resources, but this process could work in the opposite direction if renewable resources are temporarily beyond their maximum sustainable yield, so that their marginal natural growth is negative. If substitution possibilities are high enough, it may be optimal to suspend the extraction of a resource to allow the biomass to regenerate. A production process is more likely to be sustainable the more heavily it depends on renewable, rather than nonrenewable resources.     

Price-based vs. quantity-based environmental regulation under Knightian uncertainty: an info-gap robust satisficing perspective

Conventional wisdom among environmental economists is that the relative slopes of the marginal social benefit and marginal social cost functions determine whether a price-based or quantity-based environmental regulation leads to higher expected social welfare. We revisit the choice between price-based vs. quantity-based environmental regulation under Knightian uncertainty; that is, when uncertainty cannot be modeled with known moments of probability distributions. Under these circumstances, the policy objective cannot be to maximize the expected net benefits of emissions control. Instead, we evaluate an emissions tax and an aggregate abatement standard in terms of maximizing the range of uncertainty under which the welfare loss from error in the estimates of the marginal benefits and costs of emissions control can be limited. The main result of our work is that the same criterion involving the relative slopes of the marginal benefit and cost functions determines whether price-based or quantity-based control is more robust to unstructured uncertainty. Hence, not only does the relative slopes criterion lead to the policy that maximizes the expected net benefits of control under structured uncertainty, it also leads to the policy that maximizes robustness to unstructured uncertainty.     

The Environmental sustainability of mining in Australia: key mega-trends and looming constraints

At first ‘sustainable mining’ could be perceived as a paradox—minerals are widely held to be finite resources with rising consumption causing pressure on known resources. The true sustainability of mineral resources, however, is a much more complex picture and involves exploration, technology, economics, social and environmental issues, and advancing scientific knowledge—predicting future sustainability is therefore not a simple task. This paper presents the results from a landmark study on historical trends in Australian mining, including ore milled, ore grades, open cut versus underground mining, overburden/waste rock and economic resources. When complete data sets are compiled for specific metals, particular issues stand out with respect to sustainability—technological breakthroughs (e.g. flotation, carbon-in-pulp), new discoveries (e.g. uranium or U), price changes (e.g. Au, boom/bust cycles), social issues (e.g. strikes), etc. All of these issues are of prime importance in moving towards a semi-quantitative sustainability model of mineral resources and the mining industry. For the future, critical issues will continue to be declining ore grades (also ore quality and impurities), increased waste rock and associated liabilities, known economic resources, potential breakthrough technologies, and broader environmental constraints (e.g. carbon costs, water). For this latter area, many companies now report annually on sustainability performance—facilitating analysis of environmental sustainability with respect to production performance. By linking these two commonly disparate aspects—mining production and environmental/sustainability data—it becomes possible to better understand environmental sustainability and predict future constraints such as water requirements, greenhouse emissions, energy and reagent inputs, and the like. This paper will therefore present a range of fundamental data and issues which help towards quantifying the resource and environmental sustainability of mining—with critical implications for the mining industry and society as a whole.     

People matter: The importance of social capital in the co-management of natural resources

Co‐management involves the shared administration of natural resources by two or more parties. This study examines the role of social capital in the process of developing co‐management in three river corridors in Canada. Qualitative analysis reveals that social capital acts as a catalyst helping groups to progress through the stages of the co‐management process. Forms of social capital (bridging and bonding) are identified that advance and/or inhibit the development of co‐management. The article reaffirms the need to expand the institutional basis for natural resource management and provides empirical evidence that social capital plays a fundamental role in developing co‐management. In conclusion, the article suggests that resource agencies need to recognize the value of social capital and the necessity for government representatives to be informed of and practiced in these skills, if they are to engage meaningfully with the civilian population.     

Managing natural resources in the light of climate variability

Natural resource management is central to global efforts to reduce poverty and environmental degradation, and is one of the principal ways in which countries are seeking to advance sustainable development and the implementation of Agenda 21. But these efforts to advance natural resource management are strongly impacted by climate and by seasonal and inter–annual climate variability.
This article aims to further advance understanding of the relationship between natural resource management and climate variability, with particular attention to ways in which natural resource managers at every level — from the household to the national and international levels — can cope more effectively with such variability. In particular, the article provides an overview of the way in which efforts to manage natural resources to reduce poverty and environmental degradation are impacted by natural climate variability. It examines what natural resource managers are doing to cope with these challenges, and discusses the kinds of new approaches and partnerships that are needed to improve their capacity to cope more effectively with climate variability. In doing so, the article touches on the implications of future climate changes for natural resource managers and the way in which their efforts to cope more effectively with climate variability will provide opportunities to gain experience in identifying and adjusting responses to longer–term climate change.     

CONFLICT ANALYSIS AND MANAGEMENT ALTERNATWE FOR THE MANAYLJNK CANAL1

ABSTRACT: The solution of a water resource allocation problem by an alternative social arrangement is presented. Classical Austrian economic theory and the “new resources economics” provide both theoretical and practical evidence to support the development of well-defined, private property rights to the water resource in question. A conflict analysis demonstrates that management of the Manayunk Canal by a firm would reconcile existing confrontations through compromise use of the water resource. Benefit and cost calculations show that a compromise among industrial and recreational interests, currently competing in the political arena, would increase social benefits.     

炼油污水净化回用工业试验综述

随着我国石油加工业的发展,炼油装置及生产能力不断增加,炼厂对新鲜水的需求量和污水的排放量也在逐年增加。因此如何节约用水和减少污水的排放量,将炼油污水净化回用,是降低企业加工成本,提高企业经济效益,而且进一步利用水资源,提高社会效益和环境效益的重要课题,哈尔滨炼油厂自1997年开始经过小试、中试及工业试验,将炼厂污水净化回用,取得了很好的结果,同时该课题通过了中油股份公司组织的技术鉴定。     

Oak Conservation and Restoration on Private Forestlands: Negotiating a Social-Ecological Landscape

In the midwestern United States, oak (Quercus spp.) forests are considered critical habitat for conserving biodiversity and are a declining resource. Ecological conditions, such as deer herbivory and competition from more mesic broad-leaved deciduous species, have been linked to poor oak regeneration. In the Midwest, where up to 90% of forestland is privately owned, a greater understanding of social dimensions of oak regeneration success is especially critical to designing effective restoration strategies. We sought to determine factors that serve as direct and indirect constraints to oak restoration and identify policy mechanisms that could improve the likelihood for restoration success. We conducted in-depth qualitative interviews with 32 natural resource professionals working in the Midwest Driftless Area. We found that most professionals anticipate that oak will remain only a component of the future forest. Furthermore, they identified the general unwillingness of landowners to adopt oak restoration practices as a primary driving force of regional forest change. The professionals pointed to interdependent ecological and social factors, occurring at various scales (e.g., economic cost of management, deer herbivory, and exurban residential development) as influencing landowner oak restoration decisions. Professionals emphasized the importance of government cost-share programs and long-term personal relationships to securing landowner acceptance of oak restoration practices. However, given finite societal resources, ecologically- and socially-targeted approaches were viewed as potential ways to optimize regional success.     

Uncertainty in exhaustible natural resource economics: The irreversible sunk costs of Hotelling

According to Pindyck (2007) there are three important aspects of uncertainly in environmental economics: (1) the benefits and costs of environmental policy tend to be highly non-linear, (2) environmental policy tends to involve important irreversibilities, where investment in pollution abatement can impose an irreversible, sunk cost on society, and where certain pollutants can stay in the environment forever and build up to cause even more future harm in which case investment in abatement can cause an irreversible, sunk benefit to society, and (3) environmental policy involves long time horizons and yet the discount rate society should use is uncertain for determining the net present value of costs and benefits of pollution abatement. These same uncertainties also affect non-renewable, exhaustible, natural resource economics and in particular the use of the Hotelling rule: (1) the costs, benefits and transversality conditions of using the Hotelling rule can be highly non-linear, (2) the Hotelling rule involves important sunk cost irreversibilities, which will be explained here, and (3) the Hotelling rule can involve long time horizons with uncertain discount rates. All three of these problem make it extremely difficult for a market to use in any way the Hotelling rule, yet by the sheer number of articles in non-renewable natural resource economics, one would believe that it is the basis of all resource markets. In this article, we concentrate on the sunk cost irreversibilities of using the Hotelling rule. The idea of the Hotelling rule is to optimally store a non-renewable resource, but the optimization is highly dependent on the actual reserves that are available to extract. However, reserves of underground exhaustible resources are often unobservable at the beginning stages of extraction which makes using the Hotelling Rule difficult.     

Social cost‐benefit analysis of intensive versus traditional shrimp farming: A case study from India

This paper attempts a social cost‐benefit analysis of intensive versus traditional shrimp farming in West Bengal, India. Using primary data, the paper shows that although intensive shrimp farming yields high returns as compared to traditional shrimp farming, when the opportunity costs and environmental costs of shrimp farming, including disease risk, are accounted for, intensive shrimp farming loses its advantage. Sensitivity analysis shows that if the expected benefits were to fall short by 15% and costs rise by a similar proportion, intensive shrimp farmers would report higher losses than traditional shrimp farmers. Large traditional shrimp farmers continue to report positive net returns. These results are also most pronounced for small and marginal intensive shrimp farmers. Further, if the probability of disease risk is also accounted for, intensive shrimp farming reports significant losses whereas traditional shrimp farming in most cases shows positive net returns. In light of the high social costs and risks, this paper questions the rationale behind promoting intensive shrimp farming, especially among small and marginal holdings, as an income‐generating activity or poverty alleviation measure in the absence of an enabling environment. It suggests that policymakers need to factor in sustainability concerns and the local context when formulating policies to promote intensive shrimp farming.     

Canadian applications in resources analysis

Resource analysis is defined for this article as the process of integrating geological, technological, economic and other information to identify possible options and constraints in resource-based economic systems. The authors consider as examples two cases. In the first, energy resource options are considered in assessing available technological paths towards the specific target of providing energy for vehicle transport. In the second case, factors affecting the general use of Canadian copper resources are considered in an attempt to identify those that may provide limits to the exploitation of the resource.     

Territorial planning,environmental issues and social appraisal: some general implications of ‘new’ assessment methodologies

The paper attempts to conceptualise a range of problems arising from project appraisals. The author presents some general considerations concerning the role of social appraisal in territorial planning, the theoretical weaknesses of cost‐benefit analysis in assessing the effects of projects on territorial resources and some questions relating to assessment methodologies and the welfare foundations of social appraisal within planning practices. The author moves away from evaluation as a technical process towards one which also incorporates ‘practical’ knowledge in a process of argumentation.     

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.     

Is environmental research and development on the right track? Australian examples

Summary The development products of environmental research lag behind in Australia. The conventional technology transfer model may not apply where environmental research, especially in the social sciences, is still seen as marginal to society. Pragmatic planning is needed for strategic security in times of trouble ahead. Cultural alignment with technological advance allows seduction by laboratories, white gladiatorial coats and expensive equipment imparting high credibility. A correctness for research futures disallows more radical pathways by the use of profit watchers, waste watch committees, technocrats and masculinist political views.A new protocol for environmental research and development calls for less complacency, scrutiny of political and military investment in nuclear futures, greater public policy analysis of issues such as pesticides in Australia's cotton industry, more attention to natural systems thresholds, radical review of social mores, more flexible management systems and closer links between strategic land use and environmental planning.She currently works for the New South Wales Department of Water Resources as a Senior Executive Officer. She has published widely on environmental policy analysis and water planning, and is a Director of Australia's National Land and Water Resources Research and Development Corporation.     

Valuing regional geoscientific data acquisition programmes: addressing issues of quantification,uncertainty and risk

Geological surveys worldwide are involved with research in support of sustainable mineral resource development.The socio-economic benefits to be derived from these activities, however, continue to raise organisational and government sector questions. Fundamental questions include whether or not the resources committed are appropriate and in economic balance with the total benefits to be derived. Another question concerns the degree to which such services should be funded by the community at large. These questions in turn raise important issues regarding the role and cost of geological surveys, the impact of their services, and how they should maximise community benefit from their activities and expertise. To assess the value of geoscientific information,standard valuation processes need to be modified. This paper reports on a methodology designed to quantify the 'worth' of programmes upgrading regional geoscientific infrastructure. An interdisciplinary approach is used to measure the impact of geoscientific information using quantitative resource assessment, computer-based mineral potential modelling, statistical analysis and risk quantification to model decision-processes and assess the impact of additional data. These modelling stages are used to address problems of complexity,uncertainty and credibility in the valuation of geoscientific data. A case study demonstrates the application of the methodology to generate a dollar value for current regional data upgrade programmes in the Geological Survey of Queensland. The results obtained are used for strategic planning of future data acquisition programmes aimed at supporting mineral resource management and stimulating effective exploration activity.     

Tourism’s Impacts on Natural Resources: A Positive Case from China

Tourism development may result in negative impacts on natural resources owing to overuse and mismanagement. However, tourism may also play positive roles in natural resource conservation, which has rarely been verified in practice, although some researchers have demonstrated this in theory. In this article, taking the Jiuzhaigou Biosphere Reserve as a case study area, we conducted an analysis for the environmental impacts from tourism development based on social survey and interpretation of remote sensing images. The results show that the natural environment was not degraded and some indicators are even improving because all the residents have participated in tourism and given up farming and hunting. It is concluded that it is possible to use tourism as a way to balance natural resource conservation and economic development under the preconditions of making effective policies to encourage and help local people participate in tourism business and to benefit from it.