Spoken but not Heard: the promise of the precautionary principle for natural resource development

Too often, mining developments provide short-term jobs and taxes, and long-term environmental and community degradation. The 'precautionary principle', as practised by the European Union and increasingly by other nations, may provide an opportunity for local communities and others who bear the brunt of mining to employ a cautionary approach to mine permitting. Using the case of the Zortman-Landusky gold mine in Montana, the article illustrates how the precautionary principle might have precluded the tremendous losses suffered by the Fort Belknap residents who live near the now abandoned mine. The Native Americans and other protestors against the mine were correct in their worries about mine drainage affecting their watercourses and the precautionary principle might have limited mine development. The case also illustrates that economic data on mining companies need to go well beyond simple reclamation bond capability in order to avoid bankruptcy resulting in the neighbours and the government having to pay for clean-up.     

An analysis of the relationship between uncertainty-reducing exploration and resource taxation

This paper analyses the role of exploration as an uncertainty-reducing activity for a company facing resource taxation. Such exploration is of benefit, even to a risk-neutral company, because it enables a better decision to be made regarding extraction investment (Kretzer, 1994). This paper extends previous contributions to the economics of exploration in several areas which are of practical significance. First, exploration is analysed both in the context of a log-normally distributed resource deposit and of an ad valorem royalty. Second, the role of exploration in an ad valorem royalty regime is contrasted with that of a Resource Rent Tax. Finally, the relationship between exploration and resource taxation in situations of very divergent pre-exploration levels of uncertainty is considered.     

Is risk-sharing resource taxation in society's best interests if prices are log-normally distributed?

This paper contributes to our understanding of the perceived benefits for society of risk-sharing resource taxation. In the particular context of log-normally distributed prices a model is developed which enables comparison of risk-sharing resource taxation with an alternative in determining the overall return to society from auctioning an extraction lease. The main finding of the paper is a potential exception to the general preference for risk-sharing resource taxation if the bidding firms are effectively risk neutral. This exception is illustrated numerically in the context of the impact of increased price uncertainty, but it is shown not to be robust with respect to divergences from risk neutrality in the risk attitudes of firms. Consequently, it is concluded that the choice of risk-sharing resource taxation is likely to be in society's best interests, regardless of the probability distribution of prices.     

Improving marine water quality by mussel farming: a profitable solution for Swedish society

Eutrophication of coastal waters is a serious environmental problem with high costs for society globally. In eastern Skagerrak, reductions in eutrophication are planned through reduction of nitrogen inputs, but it is unclear how this can be achieved. One possible method is the cultivation of filter-feeding organisms, such as blue mussels, which remove nitrogen while generating seafood, fodder and agricultural fertilizer, thus recycling nutrients from sea to land. The expected effect of mussel farming on nitrogen cycling was modeled for the Gullmar Fjord on the Swedish west coast and it is shown that the net transport of nitrogen (sum of dissolved and particulate) at the fjord mouth was reduced by 20%. Existing commercial mussel farms already perform this service for free, but the benefits to society could be far greater. We suggest that rather than paying mussel farmers for their work that nutrient trading systems are introduced to improve coastal waters. In this context an alternative to nitrogen reduction in the sewage treatment plant in Lysekil community through mussel farming is presented. Accumulation of bio-toxins has been identified as the largest impediment to further expansion of commercial mussel farming in Sweden, but the problem seems to be manageable through new techniques and management strategies. On the basis of existing and potential regulations and payments, possible win-win solutions are suggested.     

Soil and plant characteristics as determining factors in site selection for surface coal mine reclamation

Four vegetative associations occur on surface mines located in Mercer County, Pennsylvania. Seventeen different species of grasses and legumes and 30 different species of trees and shrubs were evaluated for their ability to become established and control erosion on surface mines. The amount of organic matter and soil moisture are the principle factors regulating the establishment of vegetative cover on surface mines. Those species possessing a fibrous root system are better able to adapt for erosion control than tap rooted species. Likewise, shrubs such as bristley locust (Robina hispida) and Silver Bush or Autumn Olive (Elaeagnus umbellata) that will produce shoots when a root becomes exposed due to erosion are better adapted for erosion control than other species. The methods and species utilized during reclamation will determine, at least in part, the future use of the land and should establish conditions for natural succession to occur.This study was supported by funds from the National Geographical Society and the Office of Water Resources, U.S. Department of Interior.     

Temporal variability in trace metal solubility in a paddy soil not reflected in uptake by rice (<Emphasis Type="Italic">Oryza sativa</Emphasis> L.)

Alternating flooding and drainage conditions have a strong influence on redox chemistry and the solubility of trace metals in paddy soils. However, current knowledge of how the effects of water management on trace metal solubility are linked to trace metal uptake by rice plants over time is still limited. Here, a field-contaminated paddy soil was subjected to two flooding and drainage cycles in a pot experiment with two rice plant cultivars, exhibiting either high or low Cd accumulation characteristics. Flooding led to a strong vertical gradient in the redox potential (Eh). The pH and Mn, Fe, and dissolved organic carbon concentrations increased with decreasing Eh and vice versa. During flooding, trace metal solubility decreased markedly, probably due to sulfide mineral precipitation. Despite its low solubility, the Cd content in rice grains exceeded the food quality standards for both cultivars. Trace metal contents in different rice plant tissues (roots, stem, and leaves) increased at a constant rate during the first flooding and drainage cycle but decreased after reaching a maximum during the second cycle. As such, the high temporal variability in trace metal solubility was not reflected in trace metal uptake by rice plants over time. This might be due to the presence of aerobic conditions and a consequent higher trace metal solubility near the root surface, even during flooding. Trace metal solubility in the rhizosphere should be considered when linking water management to trace metal uptake by rice over time.