An Institutional Framework for a More Efficient Use of Natural Resources

Abstract

The importance of natural resources is recognized by its constitutional protection. A strategy to lower the impact of availability and cost of materials will have positive externalities, lessening exporting jobs abroad. A robust policy framework will improve eco‐efficient resource use and promote sustainable production and consumption. An Institutional Framework for Resource Management incorporating an international panel, would help to decouple natural resources use from its environmental impacts, monitor global material and energy flows balance and guide the design of policies and measures. Additionally, it would coordinate constituencies and generate information and knowledge, within the framework of existing environmental institutionalism. Humans change ecosystems to meet their respective needs. Their unfathomable ingenuity and drive needs a strong legal framework to provide order and deter predatory free market practices, thus limiting environmental degradation and depletion of natural resources throughout the global economy. The world economy is based on abundant fossil fuels reserves, and their use as fuels to supply energy and transport have the undesirable side‐effects of air pollution and global warming. Energy consumption is likely to expand with economic growth and prosperity; ‘business as usual’ needs to be checked with innovation playing a crucial role in reducing CO₂ emissions and creating alternatives to satisfy societal needs, but also in devising new laws. Market enthusiasm alone without strong guidance could lead to disorder, like the optimistic biofuels boom, compared with a more organized and orderly evolution provided by laws such as the German feed‐in law or Danish container law. Better organization based on a robust legal framework, innovation, information and incentives, within a market context, will create conditions to develop core competences and attitudes for achieving efficiency. Incentives, economic and fiscal, will help counterbalance the increasing importance of gas and coal and promote life cycle thinking, ecoefficiency and ecoplanning of cities. While the paper gives an overview of these aspects, the main thesis of this paper is as follows: Raw materials supply could be secured by forging strategic alliances with reserve rich stable countries like Peru with 12 metals exhibiting 10 decades of constant growth. Methodologically, this paper follows the New Institutional Economics. The paper outlines a few suggestions for an international institutional arrangement. It is neither an ex‐post analysis of international regimes nor does it contain a modelling of players involved.

*. Revised version. I wish to thank Professor Dr. Raimund Bleischwitz for his valuable comments.

Notes

*. Revised version. I wish to thank Professor Dr. Raimund Bleischwitz for his valuable comments.

1. Universidad Nacional Mayor de San Marcos and Instituto Andino, Lima Peru.

2. Institutional Economics originated in 1896, its original proponent Thornstein Veblen criticized the market mechanisms and highlighted the role and value of institutions.

3. New Institutional Economics. The role of institutions was revisited after 1960 by, inter alia, Douglass North and Ronald Coase. This view of economics also highlights the role and value of institutions, but incorporates market mechanisms and individuals.

4. Kenneth P Jameson. 2006. Has Institutionalism Won the Development Debate? Journal of Economic Issues. Lincoln: Jun 2006.Vol.40, Iss. 2; p. 369, 7 pp.

5. Environmental Economics is a subfield of economics concerned with environmental issues. In using standard methods of neo‐classical economics, it is distinguished from green economics or ecological economics which include the non‐standard approaches to environmental problems, environmental science/environmental studies.

6. Unwanted burden placed on society or the environment by production or use of natural resources

7. Introducing into the total costs the effects of clean‐up or remediation of damages or pollution avoidance

8. (PricewaterhouseCoopers 2005 Mining Report)

9. (see European Comission com2000‐664)

10. Citing only Perú as an example. Cases such as: Tambogrande, Tintaya, Cerro Quilish are recent, the last four or five years since 2001.

11. The global mining industry, as a contribution to the 2002 Earth Summit, published the landmark ‘Minerals Mining & Sustainable Development’ (MMSD) report to argue their case for ‘sustainable mining’.

12. A platform for dissemination and information of up‐to‐date knowledge and RTD activities on mining and mineral processing, supported by the 5th Framework Program.

13. (see www.mem.gob.pe, www.proinversion.gob.pe, www.pwc.com)

14. Frosch, Robert A. and Nicholas E. Gallopoulos. 1989. Strategies for Manufacturing. Scientific American August 1989, p. 94.

15. Metabolism understood as continuous exchange of materials and energy with the environment which includes the full life‐cycle of the resource.

16. (see the References section and more updated literature in www.ConAccount.net and www.materialflows.net).

17. Includes waste: liquid, solid or gases and heat.

18. This concept refers to the total amount of environmental resources that mankind can use without impairing the access of future generations to the same amount.

19. The 6th EAP European Union: Thematic Strategy on the Sustainable Use of Natural Resources highlights the importance of better resource efficiency and resource and waste management to bring about more sustainable production and consumption patterns, thereby decoupling the use of resources and the generation of waste from the rate of economic growth and aiming to ensure that the consumption of renewable and non‐renewable resources does not exceed the carrying capacity of the environment.

20. Typical discussions include government officials, parliamentarians, industry leaders and the investment community, occasionally academics but very little civil society participation being very relevant players to contend with.

21. UNDP Human Development Report, Oxford University Press 2003.

22. UN Millennium Development Goals

23. Recognizing the problem of potential global climate change, the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP) established the Intergovernmental Panel on Climate Change (IPCC) in 1988. The role of the IPCC is to assess on a comprehensive, objective, open and transparent basis the scientific, technical and socio‐economic information relevant to understanding the scientific basis of risk of human‐induced climate change, its potential impacts and options for adaptation and mitigation. The IPCC does not carry out research nor does it monitor climate related data or other relevant parameters. It bases its assessment mainly on peer reviewed and published scientific/technical literature.

24. This refers to the current experience in Peru.

25. UK Department for International Development

26. UK Department of Food and Rural Affairs

27. Forest Stewardship Council (FSC) is a non‐profit organization devoted to encouraging the responsible management of the world's forests.

28. This initiative called Business Partners for Development was set up to study, support and promote strategic examples of partnerships involving business, civil society and government working together for the development of communities around the world.

29. (Kuller, E, 2006 www.austrade.gov.au).

30. In November 2006, the city of New Castle petitioned the Federal Government to limit the exports of coal from its port, based on climate change concerns.

31. Ratified by Peru, pending ratification by the US Senate.

32. Public Private Partneship