Natural resources play a very important role in ensuring the survival of human beings. However, the lack of proper natural resource management strategies could be very detrimental because it could lead to depletion of non-renewable resources. The purpose of this study is to put into a broader context what natural resource management entails and the challenges most developing countries such as Brazil face in their implementation of the natural resources management strategies. The paper will also look at some of the policies to be adopted to solve such issues. The research methodology that has been used to collect data used in the completion of this study is mainly from secondary sources. Several literature works have been used as references so as to provide a deeper comprehension of the research topic. Interviews have also been used as a method of data collection. They were carried through telephone and online. Evidence from the research has established the role of natural resource management in economic growth and environmental sustainability. It has uncovered some of the policy issues and challenges involved. The study has provided recommendations on how such problems can be solved. Although there have been some opinions to be contested from the literature works, the research has been conclusive and quite informative. The paper will come in educating the society about what they can do individually to conserve their natural resources and the environment as a whole. With the help of this research, the community will be keener on using recovery resources in order to avoid wastage of natural resources. This study contributes greatly in the field of natural economics. The reason is that through it improvements can be made where necessary. The paper contributes much to the field of economics of natural resources. There are new solutions that are given in the recommendations’ section. Brazil has never used these decisions to conserve there natural resources. Therefore, it will be critical in helping the country to come up with a solution on their environment.
Natural resources contribute a lot to the economic growth of a country if they are managed properly. However, in most cases, their some challenges that countries go through in an attempt to use their natural resources in the best way possible. The issues may be as a result of management policies.
Background Information on the Study
Natural resources are raw materials that we get from earth; and they are not man-made. They are classified either as renewable and non-renewable natural resources. Non-renewable resources exist in fixed amounts and cannot be regenerated re-grown or remade in the exact rate that is consumed (Vaughn 2007, p.13). Such resources include fossil fuels that although they can be renewed they can take millions of years to do so. Therefore, they are not considered as renewable.
The amount of natural resources that the country possesses most of the time determines the wealth of that state and its status in the world economic system. A proper use and management of natural resources in Brazil has had its environmental and economic benefits (Davidson 2012, p.10).
Firstly, more use of renewable natural resources as compared to non-renewable ones has contributed greatly to the decline of environmental pollution (Grebner, Bettinger & Siry 2013, p.7). Non-renewable energy sources such as fossil fuels that have been in use for a long time have greatly degraded the environment especially through air, water, and soil pollution. However, the application of renewable resources such the sun, wind, and water in generating energy has reduced significantly the levels of carbon dioxide and nitrous emissions into the environment.
Proper use and management of natural resources helps a country to have a stable supply of energy and be self-sufficient (Peacock 2008, p. 10). The state does not have to rely on depletable resources such as imported fossil fuels to generate energy. The need to meet the demand of non-renewable forces places the country at a risk. The reason is that most of its investments are used in the search for deposits of non-renewable energy sources.
Investing funds in the domestic production of energy from renewable resources such as the hydro, solar, and wind power enables the state to be independent. The reason is that they are a guarantee to a stable supply of energy throughout the years (Kothari 2005, p. 6). The use of renewable resources comes in handy especially in time of natural catastrophes such as hurricanes. They most of the time tend to destroy infrastructure necessary for the transfer of fossil fuels and natural gas.
Utilization of renewable resources assists in the regional development because it is more decentralized compared to non-renewable ones (Davidson 2012, p.18). Small areas can take an advantage of renewable resources available to promote the development. It has been previously enjoyed by regions with an access to infrastructure necessary to enable the exploitation of fossil fuels. Certain industries such as the tourism greatly rely on energy in order to keep afloat.
Unfortunately, most tourism regions are forced to import such energy that is very expensive. This fact forces them to make the tourists visits more expensive. It tends to lower the desirability of such regions. However, with the use of renewable resources such solar energy can greatly minimize tourism costs enticing more tourists to visit that particular district. Decentralized renewable resources also create jobs for the local people, which strengthen and grow the economy further.
Natural resources that are being discovered and exploited for the first time are referred to as virgin ones (McHarg et al. 2010, p.23). Such ones require a lot of financial and time investment. They lead to an increase in pollution. Continuous exploitation of virgin resources can lead to their exhaustion and depletion. In order to conserve the natural resources, their recovery is recommended. This practice involves processing already use up materials such as glass, paper, and metal. Therefore, they can be reused. Recovered resources also help in maintaining the earth’s biodiversity by protecting the wildlife and natural ecosystems.
Despite the numerous economic and environmental benefits that natural resources have, most developing countries like Brazil are not able to enjoy them (Menzies 2006, p. 20). There are various challenges and problems in policy issues in natural resource management. They make the proper utilization of resources difficult. Such policy issues that make proper natural resource management hard include; unclear property rights, market imperfections, the lack of information, empowerment and poor investment decisions by the concerned state departments.
Statement of the Problem
Proper natural resource management and use are necessary because it contributes to the growth of an economy. However, challenges related to the management and inefficient utilization of natural resources have led to a decline in the economic growth in Brazil. These risks are mostly policy issues which if handled in a right manner can improve with time and proper implementation.
The purpose of this study is to investigate and identify the policy problems associated with natural resource management in Brazil and come up with the ways to improve such situations. The research will also help in understanding the role that proper natural resources management plays in enhancing the economic growth in Brazil.
1. To determine and understand how natural resource management contributes to environmental sustainability and economic growth in Brazil;
2. To investigate the challenges and problems in policy issues related to natural resource management in Brazil;
3. To find out what policy options the Brazilian state agencies should put in place in order to achieve proper natural resource management.
1. How does natural resource management contribute to environmental sustainability and economic growth in Brazil?
2. What are the challenges or problems in policy issues related to natural resource management in Brazil?
3. What policies should the Brazilian state agencies put in place in order to solve the policy problems related to natural resource management in Brazil?
This survey will cover the role of natural resources management in economic growth and environmental sustainability. The research will as well cover the challenges and policy issues related to natural resource management and the policy options available to achieve proper natural resource management.
Economic Growth and Environmental Sustainability
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Initially most classical economists like Karl Marx with his theory of Marxism, John Nash with the Nash equilibrium, and John Keynes with his Keynesian economics, have attributed a country’s economic growth and ability to maintain the human welfare with its accumulation of human and physical capital. However, economics has evolved gradually. More economists are more acceptable to the fact that the economic growth is also dependent on the state’s natural resources that are commonly referred to as natural capital.
Despite this fact, debates have emerged on whether such sources lead to environmental degradation and a high level of poverty. Hence, there might be existing rent-seeking behaviors among some powerful people in the society who try to control the resources in order to benefit themselves. Such acts have been a major cause of conflicts among people with extreme cases leading to unrest and civil wars in some countries. Such incidences have occurred in Liberia where blood diamonds were a common source of civil war and environmental degradation. Another reason is the competitiveness and productivity in the secondary sector brought by an increase of exchange rates in the primary sector. These causes have led to misconceptions and failure by people to understand if managed properly. Natural resources can lead to tremendous wealth and economic growth as indicated in developed countries.
In order for economic growth sustainability to be achieved, natural resource management must go hand in hand with poverty alleviation (Claitor’s law books and publishing division 2014). Therefore, an incidence where well-being today leads to consequences that lower the well-being of tomorrow needs to be avoided. Economic growth and development are only achieved when it ensures that the present generation does not leave the future generation worse off. The future generation should have some access and the same, if not better, economic opportunities for the present generation. Some economists have emphasized this point by stating that the per capita welfare should not decline over time. State agencies must adopt better natural resources management nowadays in order to improve and enhance opportunities for the economic development in future.
However, many economics agree that the economic development of any country result to environmental degradation of natural resources, they are still debating on this issue. Therefore, they have different opinions about them. These contrasting views are presented in two sustainability points; weak and strong ones.
The initial opinion has argued that sustainability will be achieved as long as the used capital is replaced by physical and human capital. Contrary to the weak sustainability view, the strong one states that the compensation of deplete natural resources in the future may prove quite difficult. It is especially the case due to the environmental values may place on the depleted and scarce natural resources. The view suggests that instead of depleting natural resources available in present to be compensated later, more should be done to protect such resources. Therefore, they do not become depleted.
For the economic growth and environmental sustainability to be achieved other factors must also be taken into consideration. They include output consumption and technology. These factors are determined endogenously in the economy. For instance, the technology is determined by state agencies that rely on specifically suitable policies. The composition of output is also determined by other factors such as resource endowment, tastes, preferences, and demand during certain periods. Although growth may be dependent on the availability of natural resources, other factors should also be taken into account to ensure that the economy grows as a whole (McHarg et al. 2010, p.35). It is important to consider this fact in order to ensure that certain industries are not left behind as the economy grows in other sectors.
Challenges and Problems in Policy Issues Related to Natural Resource Management
Most developing countries are economically backward because of the lack of proper natural resources management strategies. The following ones are some problems and policy issues that make it difficult to achieve the proper sustainable economic development.
The lack of proper property rights being exclusive, complete and transferable contributes greatly to an inefficient utilization of natural resources. Most of them are full of weaknesses and loopholes that can easily be taken as an advantage of by rent-seeking people. Therefore, it becomes easier to over-exploit natural resources. Therefore, it has been a problem especially in many reforestation programs leading to deforestation. The reason is that some people take benefits of the weaknesses and overprice reforestation subsidies. They also lead to social inequalities in that the poor ones always get a smaller pie than what they rightfully deserve for. Meanwhile some few rich individuals benefit from the natural resources.
Nevertheless, if policymakers put the proper measures in place, then this problem can be successfully dealt with it easily. For example, there is a need for clarity in property rights where they are obscure or do not exist at all. Policy makers should also focus on poverty alleviation as an area of interest when altering the property rights distribution. Moreover, those property rights should be compatible with poverty alleviation in order for them to function.
Natural resource management strategies should be compatible with poverty alleviation. However, most of the time, it is not possible. The reason is that poverty itself hinders natural resource management. The land is the biggest natural richness that humans have an access to on the earth. In order to survive, it has been used all over by farmers in food production. Unfortunately, most of such people are poor; and they lack knowledge, skills, and technology necessary to improve food production. These factors limit the capability of farmers to adopt new response options available for resource utilization. The result in such cases is an increase in the environmental degradation and resource impoverishment.
Once the technology options and other local possibilities have been exhausted, poor people become unwilling destroyers on their means of survival. For example, in an effort to increase their production and have no knowledge and technology to do so, most poor farmers opt to clear forests in order to create space for farming (Hackett 2011,p.25). However, it may solve the issue in a short run, but in a long one, they become victims of environmental degradation with less production. This process further impoverishes the poor curtailing their ability to adopt efficient and sustainable management policies. In order to achieve poverty alleviation, it must be taken into account when coming up with poverty alleviation strategies especially in degrading areas.
Market Failures and Policy
New strategies for management of natural resources can be adopted if their return is better than the one in place. Environmental degradation provides a high risk of the future crop failure. However, most poor farmers are not willing to invest money in technologies. Therefore, it means that the technology that is adopted leads to the expected future returns. Such choices are usually determined by public policies and other biophysical factors. In Brazil, markets are embedded with imperfections that lead to mispricing of value added products. Such ones are processed from natural resources. The result is that social and private prices differ makes the markets distorted or incomplete. Once it happens, efficient utilization of natural resources becomes difficult. The situation is worsened by the society’s elite taking an advantage to control and manipulate market incentives in order to benefit them. The existence of monopoly arrangements and market power also hinders the adoption of natural resource management strategies in such countries taking an advantage of their market power to sell products they obtain from natural resources at exorbitant prices. There is the reduced total welfare especially for the poor people in the society. However, with few alterations in the market system by policy makers, this problem can be reduced considerably. Some of the steps that policy makers can put in place will include regulation of other externalities. They bring about market imperfections introduce taxes or fees on user charges to complement market signals.
Poor Investment Decisions by State Agencies
Most developing countries that depend on non-renewable resources for economic growth and sustainability are overexploiting these resources. It occurs without investing in physical and human capital to sustain the economy for future generations (Bjørndal et al. 2010, p.13). The result is that their genuine savings rate greatly reduces. It is insufficient for future investments and economic development. Over-exploitation of this non-renewable resources leads to exhaustion and depletion of them. It poses another great economic problem because once the resources become depleted; they are forced to spend a lot on the importation of non-renewable sources in order to meet the growing demand for them. The situation is worsened by corruption and rent-seeking behaviors by elite powerful groups in the economy. They take an advantage of loopholes present for their self-benefit. However, if the state agencies concerned were to invest more in renewable natural resources, fewer expenses would be incurred. More of them would be used in the country’s development.
When the economy is at its boom, there is the tendency for state agencies to boost consumption and subsidies expenditure. Such decisions are very difficult to reverse especially when the economy is in recession leading to a lot of government debts, deficits, and eventually high rates of inflation. The latter ones hinder economic growth and development. Proper natural resource management requires that state agencies make investment decisions and policies able to buffer revenues. Those which match the economy’s absorptive capacity of investments are productive.
Population growth in the developing countries like Brazil affects the adoption of natural resource management policy. A rapid increase in population forces a drastic measure to be made to ensure the survival of citizens. Such means includes deforestation where forests are cleared to create space for housing and for land to promote farming and food production. Population growth accelerates the use of natural resources in terms of inputs necessary to make value added products and the waste produced after the production phase. If these situations are not managed properly, the higher occurrence of natural sources depletion and environmental degradation will ensue. The application of advanced technology can help counter this issue. The reason is that it lowers the amount of natural resources required to produce certain output despite the population growth.
Lack of Information and Empowerment
The lack of proper natural resource management occurs as a result of missing the proper information and empowerment of the public on what steps to take in order to achieve efficient utilization of natural resources (Sato 2013, p.30). Information disclosure and encouraging public participation in this process is a key because it helps to make the work of policy makers easier in the implementation of environment conservation. The public needs to be empowered in a way they feel the fruits that natural resource management bears. Therefore, policy makers need to put in place incentives that help them gain the confidence of people. Therefore, they can freely volunteer in community resource management. The public should also be educated and trained on how to use natural resources they have sustainably.
In this part, the description of different sources of data and methods of data collection will be explained.
The interview has been among the method used to collect data for the research. It has been done through phone calls whereby the local and authoritative figures have been interviewed about the natural resources in their country. They have been questioned to get their feelings on how natural resources of their country are managed.
Data are also available from the government about the natural resources in Brazil. The information includes different policies that are put in place in order to prevent the exploitation of these resources. The data have been critical for this research paper. The government information has been available in a form of tax records, surveys, and other statistical reports.
There are many scholars who have written information about the natural resources in Brazil. The published data that I have used for the study include the information from newspapers, magazines, books, and periodicals. The majority of the cited sources are available in libraries and archives.
Other reserves of information for this research paper have been electronic data such as television programs, documentaries, and movies.
The information for this study is also online. Books, articles, news, and reports about the natural resources in Brazil are available on the Internet. The benefits of the web are that the data have been available faster than from other sources. The most recent sources about the natural resources in Brazil have been accessible as well online.
Discussion of Findings
The research has been carried out using the methodology stated above. This part of the paper will discuss the findings from the study. It will also answer to the questions based on objectives.
Findings on the Background Information
The research has identified that natural resources consist of all vital things that human beings depend on for their survival. They are naturally happening and cannot be made by man. Human beings can only make value added products from natural materials to help enhance their total welfare.
The research has also identified that the general classification of natural resources depends on the following fact. It is an issue whether they can be regenerated or not (renewable and non-renewable natural resources). Initial ones can be generated. However, the rate of regeneration should go hand in hand with their rate of consumption. Non-renewable sources, on the other hand, cannot be regenerated; and they exist in fixed amounts. The use of renewable natural resources reduces the impact of environmental degradation than the use of non-renewable ones. They are at a higher risk of being depleted. It has been also discovered that the value of the country’s wealth depends on its natural resources endowment.
Overexploitation of natural resources can cause environmental degradation. It is, therefore, very important that state agents invest in resource recovery. The reason is that it minimizes the number of virgin resources that need to be exploited to meet the demand (Ojha et al. 2007, p.23). Protecting the earth’s biodiversity is important as wildlife species and other natural ecosystems are also very important in ensuring the human survival. The application of recovered resources also helps in ensuring that natural reserves are not wasted, but reused or recycled.
Findings on the Research Questions
Role of Natural Resource Management on the Economic Growth
Natural research management strategies need to be compatible with poverty alleviation. The strategies must not only consider the welfare of the present generation but also of the future one. State agencies should avoid policies that leave the offspring worse off than the present generation.
Cause of Natural Resources Exploitation
Weak policies of natural resource management in Brazil have enabled people to take an advantage of loopholes and overexploit natural resources (Rasband, Salzman & Squillace 2009, p.20). Corruption is also another challenge that Brazil is facing when it comes to the management of natural resources. Some powerful people who are in charge of protecting them might receive bribes to their overexploitation.
Poverty among citizens has also played a major role in natural resources exploitation in Brazil. Poor farmers may cut down trees in order to expand their land for cultivation. They do not have sufficient money to apply modern methods of production.
Conflicts within the Existing Literature
Some classical economists such as Karl Marx, John Nash, and John Keynes have been of the opinion that natural resources in some countries are a hindrance to economic development. They have felt that exploitation of them was a major cause of conflicts and civil war in some countries. Other economists have considered that the risk of the present generation depleting the available natural resources worked against economic sustainability. Others such Adam Smith and David Ricardo have stated that natural resource management strategies should incorporate compensation rules in terms of the irreversible depletion of natural resources to ensure long-term sustainability. These different opinions have led to the emergence of two sustainability views (weak and strong).
All the mentioned literature works have been in agreement that proper resource management strategies contribute greatly to economic growth and development. They also have shared the opinions of some few policy issues presenting a hindrance to natural resource management. One of policy issues coming out strongly in almost all the literature reviews has been that of unclear and non-exclusive property rights.
Limitations and Implications of the Study
Only few limitations that the research has have been:
- Lack of enough material to collect enough data in order to make the study more conclusive and detailed.
- There have been also incidences of conflicting opinions in different literature works being available on the specific topics of natural resource management.
- The language barrier during phone calls as many Brazilian do not understand spoken English.
- Scarce resources, the research has required money especially during the data collection.
- Time constraint has been another problem because the time allocated for the research was not enough.
Having carried out the study has determined the policy issues and challenges to natural research management. There are some of recommendations that can help solve those problems and improve natural research management in Brazil.
- Incomplete and unclear property rights not only cause difficulties in implementation of natural resources management strategies, but also discourage investments. The reason is that the property rights lack non-exclusion, farmers, for instance, are discouraged from investing in flood control schemes. There is a likelihood that other farmers will benefit without paying. This problem can be solved by having clarity in property rights. It involves clearly stipulating the regulations concerning the spatial and temporal extent of an activity. Penalties also need to be included in the property rights’ instruments on what action should be taken.
- Technological regulation needs to be put in place so that firms are left with a little chance of using substandard technology to exploit natural resources. More efficient technological equipment should also be adopted especially in the fisheries industry.
- Performance regulations should be put in place so that there are quotas on the amount of natural resources can harvest. The limitation given will also help in controlling the cost of the scarce product and eliminate rent-seeking behaviors by some individuals.
- The public should be empowered and motivated to participate in natural resource management. It can be done through certification and green labeling. In order to save forests, consumers should be sensitized so that they buy certified forest products.
Natural resources are a source of wealth for countries; and proper management should be put in place in order to prevent overexploitation. Poverty is a major contributor of over-exploitation of natural resources in Brazil. Mostly, farmers who do not have enough of them to apply the modern means of production cut down trees to increase the size of cultivation land. Some classical economists have thought that natural resources were the hindrance of economic growth of the country. Meanwhile others suppose that natural resources can improve the wealth of countries if they are managed well. The area that needs to have a further research is the one that is related to the rate that the natural resources are depleted in Brazil.