Global Resources

1
Global Resources

• Stock resources
• Non-renewable resources

2
Distinction bw fuels other minerals.

• 1. Fuels important for industrial economy
  Combustion is irreversible process
• Fuel combustion waste emission
• 2. Minerals can be recycled
• Important for sustainability relations bw.
  natural capital man-made capital.
• Examples sewage treatment investment
• energy conservation.
• Production, consumption, waste emission circle is
  illustrated by the MATERIALS BALANCE MODEL

3
MATERIALS BALANCE MODEL

• Economy cannot create materials
• Mass of residuals (BCD) to the mass of
  fuels, foods, raw material, oxygen.
• For any fixed final output, with increased
  recycling (important identity BRE RA1F)
  the quantity of material and energy inputs can be
  decreased. IE less primary extraction need to
  take place.

4
Change perception of resources

• Kenneth Boulding distinguishes
• Cowboy economy (open system)
• Spaceman economy (closed material system, except
  energy from outside)
• Economic performance (growth of GDP)
• BASIC CONCEPTS IN ECONOMIC APPROACH TO RESOURCES
  AND ENVIRONMENT ISSUES
• 1. Property rights, efficiency and government
  intervention.
• 2. Valuation, achieving efficiency
• 3. The time dimension of using nat. res. (stock
  and flow concepts)
• 4. The sustainability and irreversibility

5
Interdependence bw economy and resource use
(environment)

• We should treat the planet as a closed system.
• It has implications, that can be summed up in the
  1st and 2nd Law of Thermodynamics.
• Review of elements of environmental services.
• Thermodynamics
• Recycling
• Materials balance principle
• Ecology
• Biodiversity
• Population
• Technology (Affluence and technology the EKC
  (Environmental Kuznets Curve)

6
POST OILPRICE-EXPLOSION

• New epoch end of cheap energy and materials
• New requirements towards economy and
  development.
• 1./ BUT price fluctuation is considerable
• 2./ Price cant be arbitrary
• 3./ Contradictory response
• 4./ Difficult separation of cyclical and
  structural effects in consumption
• 5./ Separate discussion of fuels and non-fuels
• 6./ Real problem of scarcity
• 7./ Changing power relations (FE consumers
  suppliers, energy policy)
• 8./ Interdependency extent of
  internationalization
• STAGES OF INTERDEPENDENCIES

7
CHARACTERISTICS OF THE NEW ERA after 1973

• Increasing importance of the export of working
  capital and the TNCs
• Development of the new world economic era is
  accelerated by
• Political transformation of the previous Soviet
  Block.
• Possible emergence of a new world order in which
  global problems will be more effectively treated
  on the basis of more efficient international
  cooperation.
• Possibilities for diminishing military
  confrontation, to concentrate more effort on the
  solution of the pressing problems of the human
  existence.

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• Increasing interdependence and globalization
• Beginning of transformation of energy basis
• Deepening globalization
• Proliferation of issues requiring closer
  international cooperation
• Increasing 3rd W differentiation

9
Characteristics of the global problems

• 1. Unforseeable consequences of social and econ.
  technol. dev. or of negligence.
• 2. These are extreemly complex, the results of
• many different factors, appearing in large number
  of cs in one historical period.
• 3. The harms originating from them are already
  felt, the seriousness of these problems can be
  foreseen.

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• 4. The problems are so serious, that the mere
  existence of the mankind is endangered.
• 5. Global management is required
• Most of them are related to the future
  development of the world, and are related to
• Resources availability
• use
• needs
• Increasing rawmaterials interdependence

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Forced way of development based on the demogr.
explosion

• Closely related problems are
• agricultural prod.
• food supply. as well as
• critical situation in the ecological
  balance.
• There are two kinds of comprehensive approaches
  to reorient consumption of the natural resources
  and
• to reorganise world economy

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I. Concentrates on the international system
II. " " " existence of the sovereign
states.

• Two approaches within the first case too
• a./ Club of Rome It emphasized
• internat. global cooperation is needed to support
  the survival of the mankind.
• The most comprehensive Report was produced by
  the BRUNDTLAND Commission, ("Our Common Future)
• It is in favour of the sustainable dev. which is
  
  in harmony with the environment and
  resources use.
• b./ The supporters of the TNC model.
• II. Concept of NIEO

13
RAWMAT. INTERDEPENDENCE

• It has two main aspects
• 1. Consumption of nearly all essential minerals
  is still rising (although its rate of increase
  is on the decline). Western European cs
  (industrialised earliest), exhausted many of
  their domestic supplies of basic raw materials.
• 2. The known reserves of a number of minerals are
  highly concentrated in a few, mostly 3rd w.
  regions.

14
Rate of increase of raw mat. consumption and
world market demand for mineral res.

• It depends on the growth of industrial prod.,
  although raw-mat consumption is not proportional
  to the expansion of industrial output.
• REASONS
• 1./ STR has changed the composition of both
• --the
  consumption and
• --the
  production.
• 2./ Fuel and material efficient machinery ?and
  equipments decrease the amount of raw-material
  and energy per unit of output. (specific use)
• 3./ In addition, new artificial materials are
  invented regularly.

15
Ownership relations

• I./ At end of WWII. mining industry was entirely
  in private hands of private companies.
• Most of metals and many non-metallic minerals
  were produced by corporations owned by investors
  in the industrial cs
• In communist cs, only state ownership.
• Latin Am, Africa, S-E Asia were important mineral
  producers.

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• In 1950 their mining industries were almost
  entirely
• owned and operated by companies, controlled
  outside their boarders.
• II/ This situation changed rapidly in the 50s
  and 70s. (pol. Independence, nationalizm, control
  over natural resources)
• The ownership of most large corporations was
  transferred from foreign to domestic control.
  State corporations were established in most
  cases.

17
Explanation for the substandard operation of the
nationalized mineral companies

• 1. Failure of gov. officials to recognise the
  capital intensive nature of the mineral industry.
• 2. The profits of these firms were diverted to
  social needs of the nation
• 3. Corruption
• Exploration,
• development,
• maintenance of equipments was neglected.

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RETURN TO PRIVATE CAPITAL PARTICIPATION

• But there ARE considerable differences
• 1./ In 1950 individual mineral deposits in LDCs
  were exploited by a single corporation, based in
  one c.
• 2./ Tendency now in mining operation in LDCs it
  is owned and operated by consortia of
• several companies from
• several cap. exporting cs.

19
Mineral consumption in the post WW II period

• Two distinct stages of growth of consumption of
  minerals
• I. 1950-74 (time of unprecedented econ.
  expansion)
• II. 1975-90 (energy crises and other
  factors resulted in
• severe recessions and
• much slower world economic growth. )

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CONSUPTION

• 1950 - 73 1974 - 90
  1950 - 73 1974 - 90
• --------------------------------------------------
  --------------------------
• aluminium
  copper
• --------------------------------------------------
  --------------------------
• W-Europe 704 48
  239 16
• Japan 6758 85
  5052 79
• USA 523 -16
  86 7
• Can-AUS 708 34
  185 -18
• Socialist 983 14
  497 9
• 3rd W 3262 133
  350 198
• World tot 781 28
  242 30

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In summary

• 1./ Known reserves of major minerals continue to
  expand.
• 2./ World mineral industry will be largely in the
  hands of private enterprises.
• 3./ Investments in large scale overseas
  operations are likely to be controlled by
  multinational consortia.
• 4./ Host countries in most cases are afforded
  opportunities to acquire equity positions.

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• 5./ Some state-owned mining properties may remain
  in operation
• 6./ Consumption of minerals will continue to grow
  as population rises and world industry expands.
• 7./ Industrialised cs will experience moderate
  growth.
• 8./ LDCs will have greater gains as they work
  towards industrialisation improved living st.

23
Decline and rise of TNCs in metal mineral
industry