Economic risk and mineral taxation on Indigenous lands

Mining generates risk of environmental and social harm for Indigenous peoples but can also generate substantial revenues for them, creating opportunities for community development in a context where economic and social disadvantage is the norm. Especially as mining revenues should, in part, compensate for mining’s negative social and environmental impacts, it is vital that mineral taxation on Indigenous lands reflect a careful assessment of appropriate tax mechanisms and a matching of these with community priorities. Yet little has been written that could serve as a guide for Indigenous decision makers. This article contributes to an understanding of the issues and choices facing Indigenous communities in designing mineral taxation regimes, by focusing on the question of economic risk. Risk arises as a key variable in choosing or designing a mineral taxation regime in three ways. Different approaches to mineral taxation are inherently more or less risky, in the sense that they are more or less certain to generate tax revenues. A second aspect of risk involves the degree of economic certainty or predictability associated with different types of commodities and projects. Third, the risk tolerance of Indigenous peoples and communities can vary significantly. We show how Indigenous groups can integrate and address these different dimensions of risk, by recognising the ‘risk consequences’ associated with different approaches to mineral taxation and choosing an approach that reflects, as fully as possible, the group’s risk tolerance.     

Does taxation alter exploration? : The effect of uncertainty and risk

The effect of resource rent taxation on mineral exploration is a controversial issue on which very little research has been carried out. Simple numerical examples are used in this paper to demonstrate that a ‘pure’ resource rent tax, or Brown Tax, can reduce the extent of exploration of a ‘promising’ deposit by a risk averse explorer, but encourage exploration of ‘unpromising’ deposits. This counter-intuitive result is explained in terms of the effect of the tax and of exploration on the costs of risk and uncertainty.     

Mining taxation issues for the future

During the 1970s and 1980s the main concern of mining policies was to attract investment whilst at the same time balancing the interests of governments and companies. By the turn of the century a new spectrum of challenges faces governments and companies in the mining sector. The need for fiscal regimes to adapt to price cyclicity is to some extent superseded by the requirement that they adapt to a long-term decline of metal prices. The growing importance of environmental and community affairs in the mining sector will force governments to design coherent and comprehensive tax regulations to complement the wide range of initiatives being taken in these fields. Finally, the age-old problem of tax collection continues to raise its head in transition and developing economies.     

Drivers of illegal resource extraction: An analysis of Bardia National Park,Nepal

While park-people conflicts have received worldwide attention, the extent of illegal resource extraction and the relationship with communities’ livelihoods has gained little attention in the literature. Thus this paper investigates the impact of socio-economic factors involved in illegal fuel wood and fodder extraction at Bardia National Park in Nepal. Household questionnaires, key-informant interviews and focus groups were conducted to identify different plant species used by households and explore the causes and mode of resource extraction in three buffer zone villages in the park. Altogether 50 different plants were identified by villagers that were used regularly for different livelihood purposes. Almost half of the respondents met their needs by illegally and regularly extracting resources from the park. Incentive schemes in the form of development projects were important but not sufficient in meeting the basic needs of households’ especially for such daily items such as fuel wood and fodder. The results described in this paper showed that proximity and access to resources either in the national park, the buffer zone community forest or the government forest, and impact on the livelihoods significantly influenced the likelihood of illegal resource extraction activities. Villages that differed in terms of their location to the resource base, the provision of alternative resources and influence of these on their livelihoods showed significant differences in terms of their patterns of resource extraction and use of these resources. As resource use options, resource interest, and resource extraction patterns were different between villages and dependent on circumstances specific to villages, site-specific management strategies were necessary and more influential than the enforcement of ‘one-size fits all’ policies. It is suggested that park management plans should be flexible and adaptive enough to meet site-specific contexts and to endear wider support from local communities.     

Indigenous people and mineral taxation regimes

Indigenous people in a number of major mineral-producing countries have established a substantial and growing capacity to tax mineral resources extracted from their traditional lands. However, almost no analysis has been conducted regarding the conceptual and practical issues involved in designing mineral taxation regimes for use by indigenous people. The general literature on mineral taxation is of limited relevance because basic assumptions it makes regarding the nature of the taxing authority (national or state governments) do not apply to indigenous peoples. This article discusses some key characteristics of indigenous communities as they relate to taxation of mineral resources. Against this background, it identifies a number of approaches to mineral taxation which might be utilized by indigenous groups and which acknowledge the specific constraints and circumstances they face while at the same time recognizing their need to attract and maintain investment on their traditional lands. It also reviews the inter-relationship between indigenous and state or governmental tax regimes.     

The measurement of resource rents: An application to Canadian nickel

Once the ‘risk’ of the industry is recognized, there are at least two sources of higher-than-normal returns to investment in mineral extraction: Ricardian rents to resources with different economic qualities and monopoly rents. An estimate of the relative importance of these sources in the Canadian nickel industry over the period 1961-74 is made and it is found that Ricardian rents and, for one firm, monopoly rents, were important.     

A theoretical overview of the relationship between the resource curse and genuine savings as an indicator for “weak” sustainability

This paper shows the strong relation between the factors that lead to the resource curse (RC) and factors that lead to a decline of genuine savings (GS). There is substantial empirical evidence that economies that rely predominantly on their natural resources are also characterized by slower economic growth. This so‐called RC is commonly traced back to the fact that natural resources' generate rents that are independent of a country's economic performance, which can lead to suboptimal reinvestments of this consumed natural capital. We argue that the factors responsible for the RC also have a negative effect on GS, a concept that measures “weak” sustainable development by considering reinvestment of natural capital rents in physical and human capital. We discuss whether the RC hampers possibilities for resource abundant countries to obtain sufficiently high rates of GS, and find indeed many reasons why resource‐dependent countries have problems achieving positive GS rates. We survey both areas of research, emphasizing the influence of the exogenous and endogenous determinants of economic growth, which are usually used to theoretically and empirically explain the RC on the three different forms of capital considered by GS. We specify why most countries suffering from the RC have negative GS rates and explain in detail where the linkages are. This overview could help with potential advancements in the explanation of GS through the inclusion of RC effects.     

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.     

Natural resource economics: Relevance in planning and management

This article provides an overview of natural resource economics. It begins with a summary of historical and current views on resource scarcity. It then discusses economic models for optimal management of non-renewable and renewable resources at the micro and macro levels and evaluates their usefulness in planning, management and policy making.     

Exergy losses during recycling and the resource efficiency of product systems

Recycling materials have always some degree of contamination. The presence of contaminations in the recycling streams causes a shift in the original composition of the materials to recycle. As a consequence, their quality may decrease with each recycling step. Additionally, lower quality resources are produced from resource streams that had initially a higher quality. These quality losses cannot be measured by mass balances, as the quality degradation cannot be translated by mass measures alone. To account all losses caused by recycling contaminations, all downstream recycling processes required to bring the materials back to the resource cycles must be included. This article describes a method to calculate the exergy content and exergy losses of metal solutions during recovery and recycling. The losses attributed to recycling, namely the material losses, the contamination losses with other metals, and the consequent need for dilution can be used as indicators of the quality loss of materials and of the efficiency of resource use in product systems. Therefore, exergy is proposed here as a measure of the efficiency of resources use.     

The relationship between microbial carbon and the resource quality of soil carbon

The biological health of soil is an important aspect of soil quality because of the many critical functions performed by organisms in soil. Various indicators of soil quality have been proposed, but measurements of microbial biomass are most commonly used. During decomposition of plant residues in soil the relative intensities of the O-alkyl-C signal decreases and the alkyl-C signal increases in nuclear magnetic resonance (NMR) spectra. This leads to the suggestion that the alkyl-C to O-alkyl-C ratio of a soil may indicate the degree of decomposition. Consequently, the overall resource quality of soil C as a substrate for heterotrophic microorganisms may be inversely related to the alkyl-C to O-alkyl-C ratio. Our hypothesis is that a relationship exists between the size of the soil microbial community (microbial biomass) and the quality of soil carbon as a resource for microorganisms. New data have been combined with previously published data to show that there was a significant, negative correlation between the biomass C to total C (Cmic, to Corg) ratio and the alkyl-C to O-alkyl-C ratio (p < 0.01), which supports our hypothesis.     

Energy and other resource conservation within urbanizing areas

The reported research seeks to answer several questions regarding energy conservation within urbanizing areas. As a practical matter, to what extent can dependence upon exhaustible resources be reduced? Can these reductions be achieved without severely impairing social well-being and environmental quality? And, what seem to be the prevailing institutional constraints limiting energy conservation within urbanizing areas? The study area was the proposed “downtown” of The Woodlands, a new town north of Houston, Texas. Two plans were developed for this area. In one, no particular attempt was made to conserve energy (conventional plan), while in the other, energy conservation was a primary consideration (conservation plan). For both plans, estimates were made of energy consumption within buildings, in the transportation sector, and in the actual production of building materials themselves (embodied energy). In addition, economic and environmental analyses were performed, including investigation of other resource issues such as water supply, solid waste disposal, stormwater management, and atmospheric emissions. Alternative on-site power systems were also investigated. Within the bounds of economic feasibility and development practicality, it was found that application of energy-conserving methods could yield annual energy savings of as much as 23%, and reduce dependence on prime fuels by 30%. Adverse economic effects on consumers were found to be minimal and environmental quality could be sustained. The major institutional constraints appeared to be those associated with traditional property ownership and with the use of common property resources. The resistance to change of everyday practices in land development and building industries also seemed to constrain potential applications.     

Mineral exploration in the USSR and the USA

This article compares non-fuel mineral exploration in the USSR and the USA. It examines the organization of exploration; recent trends in the level and distribution of expenditures; exploration productivity; and planning and decision making. It shows that although the sequence of exploration stages and activities is very similar in both countries, substantial differences overshadow these similarities, largely because of different economic and political systems and mineral endowments. However, the article concludes that we still have much to learn before making a full comparison of Soviet and US exploration.     

Business excellence through resource efficiency (betre): An evaluation of the UKs highest recruiting, facilitated self-help waste minimisation project

The business excellence through resource efficiency (betre) project aimed to increase awareness of the benefits of waste minimisation for SMEs in West Sussex, South East England. The programme was run by the West Sussex Sustainable Business Partnership, a collaboration of all West Sussex Local Authorities, the Environment Agency and EcoSys (a service provider). Betre provided a range of free business support and advice over an 18-month period including; workshops, newsletters, audits, grants and a technical Helpline. Information on environmental compliance and Best Practice for waste minimisation, recycling, energy and water efficiency was disseminated. All activities were linked with the UK government's Best Practice programmes. Although company recruitment was initially slow, betre was ultimately extremely successful at attracting companies to join; with 308 recruited. This is probably the most successful recruitment to a project, of this type, in the UK to date. Over half of the business members became actively involved and attended training events or had environmental audits. There were over 200 improvement actions identified by 64 of the participating companies. These resulted in estimated cost savings of at least £215 000 per annum. In addition, actions taken to prevent pollution and ensure compliance with environmental legislation have the potential to save businesses a further £204 000 in possible penalties. The environmental impact of the project has been significant, with reductions identified in waste (1437 tonnes), water (62 933 m³) and energy (15 million kW h—equivalent to 668 tonnes CO₂). In addition to actions with directly measurable results, betre has stimulated long-term benefits by addressing pollution prevention and compliance, through the formulation of environmental policies and from the adoption of Environmental Management Systems. One of the key learning points is that it may have been better to devote less time to running training events and instead to have diverted this time to increased business support, mainly through audits. To capitalise on this success, a new project is being planned to disseminate Best Practice.     

An evaluation of resource inventory and monitoring program used in national forest planning

The National Forest Management Act (1976) specifies that multiresource inventories be conducted to provide baseline data for development and, later, monitoring of national forest management plans. This mandate entails the most ambitious and complex resource planning effort ever attempted. In this paper we evaluate the structure and use of current inventory-monitoring programs and recommend a framework for gathering data to improve national forest planning. Current national guidelines are general and provide only basic directions to forest-level planners. Forest inventories have traditionally concentrated on timber. Although these inventories are often well designed, the questions we are now asking about forest resources have outgrown these methods. Forest management is impeded by general confusion over definitions of resources and the interactions among them. We outline a simple classification scheme that centers on identification of basic ecosystem elements that can be readily measured. Furthermore, spatial and temporal scales must be considered in the design of inventory-monitoring programs. The concept of ecological indicators is reviewed, and caution is advised in their use. Inventory-monitoring programs should be goal-directed and based on as rigorous a statistical design as possible. We also review fundamental issues of variable selection, validation, and sampling bias. We conclude by developing a flexible inventory-monitoring program that is designed to provide information on individual characteristics of the environment, rather than being based on fixed definitions of resources.     

In-depth analysis of aluminum flows in Austria as a basis to increase resource efficiency

Based on the method of material flow analysis (MFA), a static model of Austrian aluminum (Al) flows in 2010 was developed. Extensive data research on Al production, consumption, trade and waste management was conducted and resulted in a detailed model of national Al resources. Data uncertainty was considered in the model based on the application of a rigorous concept for data quality assessment. The model results indicated that the growth of the Austrian “in-use” Al stock amounts to 11 ± 3.1 kg yr⁻¹ cap⁻¹. The total “in-use” Al stock was determined using a bottom-up approach, which produced an estimate of 260 kg Al cap⁻¹. Approximately 7 ± 1 kg of Al yr⁻¹ cap⁻¹ of old scrap was generated in 2010, of which 20% was not recovered because of losses in waste management processes. Quantitatively, approximately 40% of the total scrap input to secondary Al production originated from net imports, highlighting the import dependency of Austrian Al refiners and remelters. Uncertainties in the calculation of recycling indicators for the Austrian Al system with high shares of foreign scrap trade were exemplarily illustrated for the old scrap ratio (OSR) in secondary Al production, resulting in a possible range of OSRs between 0 and 66%. Overall, the detailed MFA in this study provides a basis to identify resource potentials as well as resource losses in the national Al system, and it will serve as a starting point for a dynamic Al model to be developed in the future.     

The relationship between mining and socio-economic well being in Australia’s regions

This paper examines the relationship between quality of life indicators and the gross value of minerals production from Australian regions. We used quality of life indicators, aggregated for 71 local government areas containing mining activities, of household income, housing affordability, access to communication services, educational attainment, life expectancy, and unemployment. We find no evidence of systematic negative associations between quality of life and the gross value of minerals production. Instead, mining activity has a positive impact on incomes, housing affordability, communication access, education and employment across regional and remote Australia. Whilst we do not establish causality between mining activity and quality of life, our analysis prompts a rethink of the resource curse as it applies within a single country. We did not find evidence of a resource curse, at the local government level, in Australia’s mining regions. Nevertheless, we note observations by many other researchers of negative social impacts on specific demographic sectors, localities, families of fly-in fly-out mining operations, and individuals. This contrast may be a scale issue, with the regional benefits of mineral wealth masking highly localised inequalities and disadvantage. We suggest that there is a need to better understand these impacts and, more importantly, the types of policy mechanisms government and industry can adopt to mitigate or avoid them.     

Issues in extractive resource taxation: A review of research methods and models

This paper provides a conceptual overview of economists′ attempts to learn about the effects of taxes on extractive resources. The emphasis is on research methods and techniques, with no attempt to provide a comprehensive tabulation of previous empirical results or policy conclusions regarding preferred tax instruments or systems. We argue, in fact, that the nature of such conclusions largely depends on, and is limited by, the researcher′s choice of modeling framework. Many alternative frameworks and approaches have been developed in the literature. Our goal is to describe the differences among them and to note their strengths and limitations.     

Jordan,minerals extraction and the resource curse

In its role as a competitive producer of phosphate and potash Jordan has not suffered noticeably from the Resource Curse over the past 50 years. However, the effects on its economy because of its geographical proximity to major oil-producing states have been both positive and negative. It is arguable that an oil resource curse has applied to Jordan.     

The relationship between sustainable development and resource use from a geographic perspective

Geography provides the basic building blocks for the study of resource use and sustainable development, inasmuch as it categorizes the human environment. Within the environment are resources that are needed for the survival of society. As resources are largely limited and finite, humans as agents of change must employ techniques that allow an efficient and lasting use of the available resources in their environment. This paper discusses the nexus between geography, resource exploitation, use, and sustainable development. It also discusses the characteristics, types, and classification of resources, development and sustainable development as well as the challenges and strategies for attaining sustainable development, particularly in developing countries.