exploit natural resources tend to capture most or all of whatever rent is generated. This might result
in resource use that is inefficient from an eco- nomic viewpoint when it encourages the diversion
of investment funds into the industry until all available rent has been appropriated or dissi-
pated. However, inefficiency does not arise from who captures the rent; for example, a sole owner
would be likely to operate an efficient fishery. Rather, it is the way in which the property rights
are specified, rather than their allocation, that offers a solution to inefficiency. Conversely, the
way in which rents are captured is generally in- equitable, resulting in a low or zero return to the
owners of the resource, the wider community, and it is likely to lead to overexploitation of the
resource in question. Alaska provides some con- trast to the normal situation. The government
there captures some of the rent via a fisheries landing tax and through license fees for oil pro-
duction, both of which are economic instruments, and distributes this share directly to all taxpayers
each year, similar to the payment of dividends to company shareholders. This is clear recognition of
community ownership of the state’s natural re- sources. If governments were, alternatively, to
collect resource rentals and re-distribute those through the provision of community services, par-
ticularly to those areas and sectors most in need, then distribution and equity problems would
again be addressed. Additionally, resources might be used in a more sustainable fashion if the
incentive to overexploit them and dissipate the rent was reduced by an appropriate allocation of
the rent. This requires proper management of resources to ensure that rent is produced and
clear, and transparent policy strategies designed to return a proportion of the rent to the true
resource owners.
5. Sustainability
There has been much comment in recent years on the nature of sustainable development and, in
particular, on the internal contradictions implicit in this term for example, Common, 1995; Pi-
rages, 1996. While it is generally accepted that sustainable use of natural resources means that
their exploitation by one generation should not diminish their value for succeeding generations,
application of this concept remains elusive and is the subject of much debate.
Kirkegaard and Gartside 1998 suggested that a practical time-scale for sustainability for natural
resource management broadly equates to 80 – 100 years. After that time, it would be difficult for
people to imagine what society might be like. Even making predictions of what constitutes sus-
tainability within that time period will be difficult because of natural changes beyond human control
and changes to the way humans use natural re- sources. They considered that it was important to
question what resource managers are trying to conserve, noting that ecosystems change in com-
position over time. They pointed out, for exam- ple, that the composition of fisheries, even those
presently
characterized as
‘sustainable’, has
changed substantially over the period during which they have been exploited.
These issues become more focused when con- sidering different forms of property rights, includ-
ing those involving exploitation for commercial gain, as in fisheries. In this case, a minimum
expectation is that those exploiting the resources would seek commercial returns on capital invested
in acquiring access, and in harvesting and devel- oping the resources. As already outlined, open
access and some forms of common property own- ership result in overexploitation and collapse of
resources, rather than in sustainable biological and social outcomes.
This is not sufficient reason to argue that re- newable natural resources should be maintained
in government ownership and commercial ex- ploitation prohibited. In reality, natural resources
treated in this manner assume no value to the community, other than their intrinsic ecological
and existence values. These resources are even more likely to be degraded or lost. An example of
this case is provided by the American alligator, which faced extinction before its management in-
cluded a regulated harvest program, thus placing a direct value on its continued survival and on
maintenance of its habitat.
Even the responsibility of maintaining a com- mercially
exploited marine
natural resource,
whether a reef or a fishery, in its present condition over the course of just one human generation may
be too onerous for the custodiansowners of that resource because of natural variation and diffuse
external influences in marine systems that are beyond the owner’s control. The issue of how
commercial exploitation of natural resources can be reconciled with the need for sustainability in
variable environments remains a challenging one for economic policy development and manage-
ment, particularly in marine settings. But it is clear that EIs, used in tandem with regulation and
more fully specified property rights, will become increasingly attractive to management agencies
seeking to achieve sustainable use of natural resources.
6. Conclusions
