Notes from RGS Batch'13 – A parting gift from your dear ...



NATURAL RESOURCESEssential Question: Is the supply of natural resources sufficient to meet the demands of development as desired by global economies?Enduring Understanding: Resources must be effectively and efficiently exploited and managed to ensure its sustainability in order to achieve the goals of development.Macro-concept (Change): The meaning, use, distribution and importance of resources changes over time in relation to its supply and the ever-changing needs of society.Content KnowledgeRenewable vs non-renewableResource endowment and spatial distributionEconomics (demand and supply) of natural resources (esp energy) importance, rate of exploitable, impact and challengesEnergy crisis and sustainability implications of resource utilizationAlternative energy resources types, pros and cons, constraints and challengesDefinitions:Natural Resources: - Resources occur naturally within environments that exist relatively undisturbed and valued by mankind, in a natural form, whether renewable or non-renewable.Availability - Presence of natural resources for the country's usageExploitation - Harvesting of resources to its maximum in exchange for human benefitsOverexploitation - Unsustainable usage of natural resources resulting in negative repercussions on environmentAccessibility - Accessibility can be viewed as the "ability to access" and benefit from some system or entity.Renewable: can replenish with the passage of time, either through biological reproduction or other naturally recurring processesNon-renewable: does not renew itself at a sufficient rate for sustainable economic extraction in meaningful human timeframesResource Endowment and Spatial DistributionTheory: Abundance of natural resources should accelerate economic development as it increases exports so more capital goods can be imported to build up the economy and also because the natural resource rents (surplus revenue) can be used to boost capital investment. Reality (when is natural resources not a blessing?)Resource Poor CountriesResource Rich CountriesMore likely to foster developmental political states that possess both the autonomy to pursue coherent policies and the aim of raising welfare of the entire populationMore likely to rely on primary product exports, breeding predatory governments and delaying competitive industrialization- Government can win immediate support after capturing rents (profits) and using them to create employment in protected industry or government service (labour and capital used inefficiently)Diversify earlier into competitive manufacturing which brings about high efficient investment- Accelerates urbanization and speeds up the demographic cycle, slowing population growth, decreasing the number of dependents so saving and investment increases their share of GDP- Exposure to global competition sustains efficiency of investment.- Labour-intensive manufacturing absorbs surplus rural labour so causing wages to rise due to labour shortages, helping them maintain a floor below their wages and maintain relatively equitable income distribution encouraging economic diversification into more skill intensive and capital intensive industries that can afford to pay for an increasingly productive and expensive workforce. Economic diversification also strengthens the economy’s resilience in difficult times. Retards urbanization and the demographic cycle so each worker must support more number of dependents and saving increases slower. - Investment efficiency fails, as the government must squeeze more and more rent from farms and mines to support the protected industry and bureaucracy. - Absence of labour-intensive manufacturing for export causes surplus rural labour to exist and causing wages to be depressed, increasing income inequality and social tensions. Resource abundant economy is locked in staple traps where parasitic industry and bureaucracy siphon revenue, causing competitiveness and relative importance of primary industry to wane as government policies blunt incentives. - Encourages over-reliance on one product (very susceptible to market demands)- Results in growth collapseFollows the competitive industrialization model:- Limited scope to expand export of primary products which causes them to embark on competitive industrialization at a low GDP per capita, triggering virtuous interlocking economic and social circles that sustain rapid and equitable economic growth- Limited rents causes government to have stronger incentives to generate wealth by promoting efficient economic growth rather than abusing its power to capture natural resource rents. All of this, together with early urbanization and passage through the demographic cycle accelerates the build up of social capital (institutions that foster trust), further boosting investment efficiency. Greed-driven conflict follows a pattern where rival groups initially fight with each other to establish a local monopoly of power that permits desired level of resource looting. - Unstable investments, energy spent fighting rather than to produce discourage predatory political states so coherent economic policies can be pursued that sustains rising income and curbs environmental damage. Examples: Singapore investment in value-added services and re exports, ranks 18th upon 185 states on the Human ?Development Index, thanks to its good governance and strategic economic policies. Hong Kong ranks 13th upon 185 states on the Human Development Index, although it has ?very few resources. 96% of Hong Kong’s exports are made up of re-?‐exports. The lack of resources has been a blessing in disguise to Japan, as it has forced them to think ?of new, innovative products to sell and export, resulting in them spearheading creations and innovations, especially in the world of technology.Examples: Angola Angolan oil reserves at 5.4 billion and 11% of world’s diamonds produced in 2000, oil rents natured predatory state which enriched the elite and impoverished the vast majority Rebels took over 90% of diamond production, but when global community tightened surveillance of diamond exports, rebels became vulnerable due to over-relianceThe African continent is very rich in resources, yet its level of development is low. This is due to poor management and inefficient government regulations. Also, other countries exploit Africa’s natural resources, causing most of the value and money from Africa’s natural resources to go to the West, instead of Africa itself.Exploited by MEDCs Lack of skills to use resources Large population size Ineffective government Other reasons for low development? (Income gap, etc.) Development of industries due to resources Revenue earned channeled to improving standard of living Lack of resources for industrial development Lack of capital earned from economy for developmentGood governance Investment in Human Resource Prime location e.g. Singapore Positioning itself as a trading hub Rely heavily on international relationships The supply and availability of natural resources does have an effect on the pace and level of development of a country, but this also depends on how the country chooses to use the resources. The impact of resource endowment on a country’s level of development is determined by the country’s capability to exploit the resources. Also, there is an increasing demand for resources, but a depleting supply. The distribution of resources is uneven, and the richer countries have control over much of the world’s resources. (Core-?‐periphery theory, which suggests that as MEDCs expand in economic prosperity, they engulf LEDCs-?‐ Core, expands into periphery)3+4. ECONOMICS of natural resources: ?(Demand and supply; accessibility, availability, affordability)ENERGY: importance, rate of exploitation, impact and challenges- Evaluate implications of high rates of resource utilization and exploitation- How to ensure sustainability of natural resourcesResource Management: “The environmental impact of a community or of humankind as a whole (output- eg. impact on environment) depends both on population and impact per person (stakeholders), which in turn depends in complex ways on what resources are being used, (management) whether or not those resources are renewable, (nature/type of resources) and the scale of the human activity (process) relative to the carrying capacity of the ecosystems involved (Spatial-temporal?) . Careful resource management can be applied at many scales, from economic sectors like agriculture, manufacturing and industry, to work organizations, the consumption patterns of households and individuals and to the resource demands of individual goods and services.” ?→ Sustainable Resource management requires concerted effort from different levels- across nations and sectors; different stakeholders and factors affect the input--> which determines process e.g. the management of resources -->output diff :)In terms of macro concept:Different spatial/temporal specifics affect the type of input available → management of natural resources by different stakeholders e.g. industries, individuals constitutes the process → different outputs in terms of amount of usage as well as impact on environment*Balance between environmental, social and economic remains crucial to resource management --> in the long term, sustainability is still key, as econ and social aspect is dependant on the environmental aspectWhat is overexploitation? - The use, by humans, of a natural resource so much so that it is not sustainable- The rate of replenishment is not able to meet the rate of which it is exhaustedOverexploitation vs Optimization (unsustainable vs sustainable) - Optimizing use of?natural resources = sustainable management/ extraction of natural resourcesImplications of High Rates of Resource Utilization and Exploitation (IMPACTS)- Destruction of environment e.g. timber reduces forest cover- Natural resources are the backbone of some economies - overexploitation and unsustainable usage leaves fewer resources for future generations. Especially bad for countries that cannot afford more renewable forms of energy and rely on non-renewable ones. - Global warming e.g. reducing forest cover, burning of fossil fuels- Ecosystem affected e.g. when you overexploit fishes, species risk becoming extinct- An increased dependency on natural resources? Means less focus on tertiary industries, more focus on primary and manufacturing - less diversified economies- A rise in prices when you deplete natural resources e.g. fossil fuels, food prices will riseWhy does this occur? (CAUSES)- When poor people/countries have little other alternative than to use resources unsustainably e.g. cannot afford renewable energy resources → countries are constantly looking at what’s best for them in terms of AAA, as their priorities are Econ and Socially PROFITS driven- Rapidly increasing population in some countries requires needs to be met asap e.g. energy- Regulations/disincentives fail to stop destructive use of natural resources e.g. environmental taxes, quotas OR there is a lack of them- Rarity of a resource can affect exploitation too (see below for examples) - have a high unit value- Overconsumption by rich countriesIs problematic when:- Individuals grow slowly (trees)- Mature after many years (fossil fuels, trees, fishes)Examples of High Value Resources that are being Exploited: Gold from Peru - when global gold prices rose, led to destructive exploitation of the gold mines which degraded the environment around the areaMahogany Trees - valuable hardwood from Latin America and Caribbean. Single large tree produces more than $100,000 of lumber. Mahogany sold in US creates $100 million dollar market. Most large trees inside parks and protected land.Bluefin tuna - valuable, one fish sold for $180,000 on the Japanese market. Schooling behavior - large, multiple catches are typicalShark fin - properties ascribed to the shark’s fin have deep roots in Chinese tradition. The United Nations Food and Agriculture Organization deduces that 856,000 tons of shark and fellow species, including rays and skates, were caught in 2003 — triple the quantity of five decades earlier. Shark fin soup can be purchased for as much as $100 per bowl in Hong Kong, and up to $200 in the U.S. The Amazon Rainforest - forests are cleared to provide timber. ?>20% of Amazonian land cleared and used for livestock. At this rate, Amazon will be reduced by 40% by 2030. Amazon Rainforest accounts for 50% of the world’s forests.Millenium Ecosystem Assessment + Other ExamplesFish Exploitation Numbers:500,000 tons of fish are taken from the Mekong river in S.E. Asia 210,000 tons of fish are taken from the Zaire river in Africa210,000 tons of fish are taken from the Amazon river in S. America- Water withdrawals from lakes and rivers for human use have doubled in the past 40 years and a third of the world's population lives within ecosystems that contain less than 10 percent of the global freshwater supply.- The flow of nitrogen into the oceans has doubled since 1860 and at least 25 percent of marine fish stocks are overexploited (Ecosystems affected)The accelerated and sustained resource exploitation of the past 50 years has opened the door to new diseases, widespread water pollution, coastal dead zones and the likely collapse of some global fisheries, the report concludes.Two services, capture fisheries and fresh water, are now well beyond levels that can sustain current, much less future, demands and the report concludes these problems will substantially diminish the benefits for future generations.Increased resource exploitation and changing land use over the past century has resulted in a substantial and largely irreversible loss in biodiversity, the report concludes.Some 10 to 30 percent of the mammal, bird and amphibian species are currently threatened with extinction.Many regions facing severe ecosystem degradation - such as sub-Saharan Africa, Central Asia and parts of Latin America and South Asia - also face problems of severe poverty and projected population growth, according to the study. ENERGY: Natural resources (mainly fossil fuels) are depleting even quicker than before and this is because: Increase in the sophistication of technology enabling natural resources to be extracted quickly and efficiently. E.g., in the past, it could take long hours just to cut down one tree only using saws. Due to increased technology, rates of deforestation have greatly increased.A rapid increase in population. This leads to greater demand for natural resources.Cultures of consumerism and rising affluence. Materialistic views lead to the mining of gold and diamonds to produce jewelry, unnecessary commodities for human life or advancement. Excessive demand often leads to conflicts due to intense competition. Organizations such as Global Witness and the United Nations have documented the connection.Non-equitable distribution of resources. Implications: (IMPACT ON WORLD ECONOMY, WHICH AFFECTS SOCIAL ASPECTS OF COUNTRIES)1) ECONOMIC + SOCIAL: Depletion of finite resources such as oil, gas, useable water or minerals is likely to impact on world GDP well before the worst impacts of global warming. ?(SOCIAL) The two together are likely to constrain world food production seriously, particularly in countries with high population densities or insufficient fertile lands. ?Food security in these countries is behind the huge “land and water grab” by foreign nationals that is now occurring across the developing world2) ECONOMIC: ?It seems that while the IEA expects a steady increase in available oil, recent, more believable, evaluations of the decline in oil from the major giant oil fields that are already in the phase of depletion (e.g. Cantarell in Mexico and the North Sea province etc) suggests that Peak Oil arrived in 2008 and that by 2030 the production from fields currently on stream could have decreased by over 50 per cent (Hook 2009). The probable effect will be high prices flowing on into every walk of life, especially the cost of food with its huge embedded fossil fuel energy costs. This will inevitably increase financial instability and produce more recessions.Significance:About 80% of the world’s energy consumption is sustained by the extraction of fossil fuels, which consists of oil, coal and gas. As the population grows towards nine billion people over the next 50 years, the world’s energy demands are going to increase By the year 2020, the world’s energy consumption is projected to increase by 50%Coal produces 10 times more carbon emissions than renewable sources of energy.Burning of fossil fuels emit 3?4 of the world’s greenhouse gas emissionsNot enough energy to sustain our current consumption rates and lifestylesRate of consumption > rate of replenishmentTraditional fossil fuels are non-renewable and are diminishing in suppliesApproximately only 4% of fossil fuels left on earth5. Alternative energy resources types, pros and cons, constraints and challengesWhy is there a need for alternative energy?Industrialization- a shift from more labour-intensive to machine-intensive industriesTechnology- advanced transport services such as space shuttles take up energy Modernization- increased use of electricity with fridges, televisions, etc.Population growth- more resources have to be consumed to cater to a 6bn population in terms of food, etc.Fossil fuels are running out, forcing prices to increase to about US$100 per oil barrel.Energy resource depletion, oil might run out between 2025 and 2070.Singapore tries to go nuclear!Groups InvolvedReasons forReasons Against1. Member of Nature SocietyDecrease in CO2 emissionsInitial development of infrastructure: environmentally destructive.Management of radioactive waste: safety & security threatLand constraints2. Agriculturalists(output of nuclear energy affects input to agriculture)Nuclear waste contaminates H2O. Fish’s living environment quality, quality of agricultural produce decreased.Encroachment onto farming landSoil fertility affected due to contamination3. Industrialists (producers of NE and consumers)Cheaper source of energy, lowered operational costs maximized profit margins(Cheaper generation costs, 1.87 US cents per kWh, while oil costs 10.26 US cents per kWh)- Encroachment onto industrial land, rent of land increased operational cost increased. - Processing methods have to be edited to accommodate restrictions4. ResidentsLowered cost of electricitySafety concernsCost of living increased due to limited residential space, property prices jerked upHigh density in limited spaces, human and traffic congestion increased, stress levels sky high5. Government Clean energy in terms of carbon emissions.Increase in self-sufficiency, minimum uranium max energy (76% of our energy is from natural gas, while 80% of the gas is imported from Malaysia & Indonesia)Land constraints relocation of people and land use social unhappiness political support compromised instabilityPolitical boundaries: situation of plant can trigger/upset diplomatic ties ................
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