Sustainabledevelopment is defined as the attribute of utilizing the naturalresources in a prudent manner to empower the future generation withadequate capacity to meet their resource demand (Fisher,2011).The concept of equity in the access to resources is not limited tothe intergeneration aspect as the intra-generation is equallyimportant, which is based on equality within the present generation.
Sustainabledevelopment integrates natural and environmental resources with theproduction of-of goods in an economy through provision of mechanismsthat can be utilized as means of ensuring that the stock within theenvironment is consumed in a judicious manner. Sustainabledevelopment seeks to assess the quantity of the available resourcestock, which is used as the basis for developing a viable mechanismof goods production.
Theapproach of sustainability is linked to the measurement of naturalresource scarcity through the evaluation the consumption patterns toassess the causative factors of the scarcity or even the patternslikely to be experienced in the future. Additionally, the methodsused in the utilization of the natural resources act as the benchmarkto evaluate its influence on the current scarcity.
Theexistence of a steady-state level consumption requires the employmentof consistent strategies in the sourcing of natural resources. Themethodologies employed in the extraction of the resources should bebased on allowing the environmental resources to replenish.Therefore, it infers that the output and input should be directlyproportional to enhance the maintenance of optimal level in theconsumption of the resources.
Theindicators of natural resource scarcity include the decline in thefinancial income from the utilization of the natural resources. Thedecrease in the income patterns infers that the stability within thefundamental aspects has been negatively altered (Fisher,2011).Therefore, the level scarcity can be used as an indicator of theavailability of the particular resource. As such, the unit cost usedincurred in deriving the natural resource acts as a viable platformto assess the level of unavailability in a given resource. The higherthe unit cost, the greater the scarcity due to the existence of adifference in supply and demand. Further, rent can be used as aconcept of measuring the level scarcity as it based on the priceincurred to ensure that the extraction of a given resource ismaintained at an optimal level. The responses to these shortagesinclude coping with the new prices or opting for alternativemechanisms as means of responding to changes.
QuestionTwo (Environment Factors)
Theterm externality is defined as the effects brought about through theutilization of a given resources and are born by the third partywithout being reflected in the production of goods and services.Therefore, the approach is based on the aspect of the consequenceendured by a third party due to the difference in the methods used byanother entity to extract a given natural resource. For instance, asteel company in the upstream of a river and hotel resort in thedownstream is an example of an externality. The steel companypollution endeavors are bound to affect the ability of the hotel toprovide adequate services.
Thetools for responding to externalities in the exploitation of naturalresources include negotiation on a compromise between the affectedparties. Within this methodology, the involved parties deliberate onthe different elements that can be compromised as means of ensuringthat the derived benefits are optimal (Fisher,2011).Further, elimination of entities affected is another tool that isbound to contain the existence of an externality. Additionally,increase in the taxation due to pollution can be means of ensuringthat the level of externality is maintained at an optimal level andthe impacts adequately controlled. Further, imposing pollutioncontrol provision is a viable tool for ensuring that the effects aremonitored, and the benefits of the resources are maximized.
Question3 (Nonrenewable Resources)
Thefactors that determine the pace and mode of natural extractioninclude the steady demand in the market. The prevalence of the demanddetermines the speed of extraction as the elevation of demand willreciprocate to the high pace of extraction as opposed to lower demand(Fisher,2011).The existence of government regulation regarding the environmentinfluences the methodologies used in the extraction of the resources.The existence of rules and laws act as governing components andrestrict or allow the undertaking of various activities.
Eventhough natural resources such as petroleum are elastic, the cartelshave the ability to control prices as the determination of costs isan attribute that is influenced by the availability of the oil.Moreover, the level of replacement with other energy componentsincluding the renewable energy is not yet well mainstreamed. Hence,oil becomes an integral provider of energy, which implies that theoil cartels have the necessary capability to set trends of newprices.
Thesubstitutes determine the rate through the amount of replacementbeing injected into a grid or other area of energy consumption. Thevolume of the supernumerary option being utilized influences theprice of the primary resources as it brings about new dynamicsregarding the trends acceptable. For instance, the increased use ofsolar energy as opposed electricity in water heating is bound toreduce the costs since solar power extraction is relatively cheap.
Fisher,A. (2011). Resourceand Environmental Economics (1sted.). Cambridge, GBR: Cambridge University Press.
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