Exploitation of natural resources

"Exploitable" and "Economic exploitation" redirect here. For other uses, see Exploitation (disambiguation).

The exploitation of natural resources describes using natural resources, often non-renewable or limited, for economic growth[1] or development.[2] Environmental degradation, human insecurity, and social conflict frequently accompany natural resource exploitation. The impacts of the depletion of natural resources include the decline of economic growth in local areas; however, the abundance of natural resources does not always correlate with a country's material prosperity. Many resource-rich countries, especially in the Global South, face distributional conflicts, where local bureaucracies mismanage or disagree on how resources should be utilized. Foreign industries also contribute to resource exploitation, where raw materials are outsourced from developing countries, with the local communities receiving little profit from the exchange.[3]

The exploitation of natural resources started to emerge on an industrial scale in the 19th century as the extraction and processing of raw materials (such as in mining, steam power, and machinery) expanded much further than it had in pre-industrial areas. During the 20th century, energy consumption rapidly increased. Today, about 80% of the world's energy consumption is sustained by the extraction of fossil fuels, which consists of oil, coal and natural gas.[4]

Another non-renewable resource humans exploit is subsoil minerals, such as precious metals, mainly used to produce industrial commodities. Intensive agriculture is an example of a mode of production that hinders many aspects of the natural environment, for example the degradation of forests in a terrestrial ecosystem and water pollution in an aquatic ecosystem.[5] As the world population rises and economic growth occurs, the depletion of natural resources influenced by the unsustainable extraction of raw materials becomes an increasing concern.[5] The continuous alteration of the environment through water, mineral, and forest exploitation poses increased risks of climate-based displacement and conflict stemming from scarcity, which threaten to perpetuate social inequities.[6]

Revenue from mineral exports makes up a large portion of the Democratic Republic of Congo's economy. While Congo is rich in mineral resources, these deposits require extensive manual labor to extract, often under life-threatening conditions. Mining of cobalt is tied to human rights abuses, such as unsafe worksites, child labor, and forced Congolese labor, in addition to environmental degradation.

Causes[edit]

  • Advancing technology: Increasing technology sophistication enables faster rates of natural resource extraction. For example, in the past, it could take a long time to log a small amount of trees using only saws. Due to better technology, the rates of deforestation have greatly increased.[7] Development of new technologies, such as electric vehicles and portable technologies, i.e, Smartphones, also heavily rely on cobalt mining, often leading to loss of green cover and detrimental health impacts for surrounding communities, often in developing countries like the D.R. of Congo where mining occurs.[8]
  • Population rise: The human population is increasing. According to the UN, the world population was 7.6 billion in 2017. This number is expected to rise to about 10 billion in 2050 and about 11 billion in 2100 due to shifting fertility and mortality rates around the world.[9] This results in higher demand for natural resource extraction to sustain more life.
  • Consumerism: Unsustainable consumption, driven by both population growth and materialistic ideologies, increases the demand for production and, thereby, the extraction of the natural resources needed to supply this demand.[10] For instance, the consumption of fine jewelry leads to increased mining of gold and diamonds. The extraction of precious metals like gold has degradation effects on the environment, such as loss of forestry during construction of the mining facilities, increased exposure to toxic materials, and disturbance of the nearby ecosystem.[11]
  • Management thinking: In relation to the previous point, companies have adopted the idea according to which the rarer the resource, the more it contributes to the company's competitive advantage. When it comes to natural resources, such an idea leads to natural resource exhaustion.[12]

Consequences of exploitation of resources[edit]

A group of people in blue shirts walking across a field with multiple piles of branches.
A deforestation in Nigeria team patrolling the deforestation site. Nigeria has experienced an increase in deforestation in part due to expansion of agriculture, lumbering, and urban growth. These land-use changes are driven by population increase and poverty.[13]

Natural resources are not limitless, and the following consequences can arise from the careless and excessive consumption of these resources:

  • Deforestation: Removal of trees for use as resources, such as in agriculture or industry, can lead to large-scale destruction of forests. Around 40% of the Earth's original forest cover has been lost in the last 8000 years.[14]
  • Desertification: Human-led changes in land management practices lead to changes in the ecological characteristics of a region. Land mismanagement and climate change can lead to a loss of ecosystem services, such as through degradation of soil.[15] Together, these losses can result in desertification seen in arid and dry areas.
  • Decrease in natural resources: When resources are exploited faster than they can be replenished, it results in an overall decrease in natural resources in an area.[16]
  • Extinction of species: Processes involved in resource exploitation can directly or indirectly lead to the extinction of species.[17] Animals used for resources can be directly hunted, while destruction of environments, such as through harvesting timber, can also cause extinctions.
  • Forced migration
  • Soil erosion
  • Oil depletion[18]
  • Ozone depletion
  • Greenhouse gas increase
  • Water gasification
  • Natural hazard/Natural disaster
  • Metals and minerals depletion.

Economic consequences[edit]

Natural resources are vital for human survival, however, if their consumption surpasses their natural replenishment rate, the resources can become depleted.[19] According to the United Nations Food and Agriculture Organization, around 33% of the Earth's soils are presently classified as moderately to highly degraded, with projections indicating that more than 90% could face degradation by the year 2050 and thus cause significant economic consequences. With such rate of erosion of fertile soil, agricultural commodity prices tend to increase significantly.[20] The connection between the consumption rate and the supply rate of resources holds significant implications for long-term economic growth, as sustained high consumption rates of certain resources ultimately jeopardize economic sustainability.[21] For instance, in the case of extracting soil minerals, supply rate is exceedingly slow over geological time spans, inevitably leading to a consumption rate surpassing the supply rate. Such a scenario is evidently unsustainable in the long run. To ensure sustainability, the consumption rate must remain equal to or less than the supply rate.

There has been an ongoing debate among scholars and researchers on the economic implications of dependence on natural resources. Natural resources yield economic rents that can be allocated towards public welfare initiatives and other projects beneficial to local communities. However, in the long term, uncertainties linked to potentially unstable terms of trade for commodities might lead to decline in public finances and deter investment.[22] For instance, if oil prices decline, it may lead to fiscal unease in significant petroleum-producing countries such as Russia, Qatar, and Saudi Arabia. Resource abundance challenges the progress of political and governance institutions by nurturing a culture of rentierism.[23] For instance, revenues obtained from resources can be used for political manipulation. Additionally, extra capital from resources can dilute government accountability to both citizens and businesses by abandoning taxation completely, which leads to lack of government incentive to support economic growth through innovation. At the same time, citizens may lack the motives to advocate for better governance and transparency.[24]

Because of environmental pollution, cities whose economies rely on natural resources face difficulties in attracting technology-driven businesses and skilled labor, posing significant challenges to their economic transformation and advancement.[25] These resource-centric cities face disadvantages in the competition among local governments striving for environmental quality. Analyzing panel data spanning from 2005 to 2017 for 30 coal-mining cities, it’s been discovered that environmental regulations offer a new approach to potentially reversing the adverse effects of resource dependence, and thus fueling greener sustainable development in coal-mining regions.[26]

Despite the inevitability of environmental contamination associated with resource extraction because of current mining technologies, this pollution delays residents' engagement in agricultural and aqua cultural activities, which are negatively influenced by environmental conditions. As a result, these cities tend to rely heavily on a singular economic development model centered around resource exploitation, making them ill-equipped to address environmental crises effectively.[27] Economic gains from natural resources are mostly beneficial when directed towards initiatives such as job creation, skill enhancement, capacity building, and pursuit of long-term developmental objectives. Thus, reliance on one or more natural resources holds financial risk when aiming for a stable economic growth.[28]

Effects on local communities[edit]

The Global South[edit]

Human Resources Macon, Georgia, 1909

When a mining company enters a developing country in the global south to extract raw materials, advocating the advantages of the industry's presence and minimizing the potential negative effects gain the cooperation of the local people. Advantageous factors are primarily in economic development establishments, such as health centers, police departments, and schools, that the government may not provide.[29] However, these advantages are not always distributed evenly among local populations, and the income generated from extracting natural resources can result in internal conflict within the developing country.[30] In addition to unequal distribution, the adaption of consumerist values also results in conflict over resources within local communities.[31]

Despite being rich in natural resources, the Democratic Republic of Congo is one country in the global south suffering from the effects of the resource curse. Its valuable copper and cobalt mineral deposits make Congo vulnerable to local and international conflict over the distribution of resources. These conflicts, along with the environmental degradation effects of mining, exacerbate high poverty rates, which approximately 64% of the Congolese population live under.[3] Natural resource extraction and climate change are intertwined in Congo, as mining for copper and cobalt creates a biodiversity loss as green covers are cleared for constructing artisanal mines and roadways.[32] Conflict over resources, poverty, and environmental degradation leaves a large number of the Congolese population vulnerable to internal displacement, lacking resources to adapt to climate change. Beyond climate impacts, mineral mining has also been linked with adverse health impacts, such as high levels of cobalt in urine and blood samples in populations located on or near industrial mines. Mining ores pose health risks long after mining has ceased, as wastelands generate toxic metal-rich dust.[33] The injustice perpetrated by unsafe mining ores is not exclusive to the adult and child laborers. Instead, it impacts the whole country as low wages for high-risk mining worsen poverty rates, exacerbating negative social impacts such as conflict, higher crime rates, and child mortality.

The effects of the exploitation of natural resources in the local community of a developing country are also exhibited in the impacts from the Ok Tedi Mine. After BHP entered into Papua New Guinea to exploit copper and gold, the economy of the indigenous peoples boomed. Although their quality of life has improved, initially disputes were common among the locals in terms of land rights and who should be getting the benefits from the mining project.[34] The consequences of the Ok Tedi environmental disaster illustrate the potential negative effects from the exploitation of natural resources. The resulting mining pollution includes toxic contamination of the natural water supply for communities along the Ok Tedi River, causing widespread killing of aquatic life. When a mining company ends a project after extracting the raw materials from an area of a developing country, the local people are left to manage with the environmental damage done to their community and the long run sustainability of the economic benefits stimulated by the mining company's presence becomes a concern.[35]

See also[edit]

References[edit]

  1. ^ Cronin, Hemang . (2011). "Natural Resources and the Development-Environment Dilemma Archived 2016-03-05 at the Wayback Machine." Exploiting Natural Resources. The Henry L. Stimson Centre. p. 63.
  2. ^ Cronin, Richard; Pandya, Amit (2009). "Exploiting Natural Resources: Growth, Instability, and Conflict in the Middle East and Asia" (PDF). STIMSON Pragmatic Steps for Global Security.
  3. ^ a b "Climate and Environmental Security in the Democratic Republic of Congo | DGAP". dgap.org. Retrieved 2024-04-23.
  4. ^ Planas, Florent. "The Exploitation of Natural Resources". Un An Pour La Planete. Archived from the original on 12 November 2012. Retrieved 22 March 2012.
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  7. ^ Sabogal, Cesar; Nasi, Robert (2005). Restoring Overlogged Tropical Forests. In: Forest Restoration in Landscapes. Springer, New York, NY. pp. 361–369. doi:10.1007/0-387-29112-1_52. ISBN 978-0-387-29112-3.
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  16. ^ Mittal, Ishwar; Gupta, Ravi Kumar (30 September 2015). "Natural Resources Depletion and Economic Growth in Present Era". SOCH- Mastnath Journal of Science & Technology (BMU, Rohtak) (ISSN: 0976-7312). 10 (3). Rochester, NY. SSRN 2920080 – via SSRN.
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  20. ^ Ul-Durar, Shajara; Arshed, Noman; Anwar, Awais; Sharif, Arshian; Liu, Wei (October 2023). "How does economic complexity affect natural resource extraction in resource rich countries?". Resources Policy. 86: 104214. doi:10.1016/j.resourpol.2023.104214. ISSN 0301-4207.
  21. ^ Jowsey, Ernie (2009-10-12). "Economic aspects of natural resource exploitation". International Journal of Sustainable Development & World Ecology. 16 (5): 303–307. doi:10.1080/13504500903204934. ISSN 1350-4509.
  22. ^ Frankel, Jeffrey (March 2010). The Natural Resource Curse: A Survey (Report). Cambridge, MA: National Bureau of Economic Research. doi:10.3386/w15836.
  23. ^ Lashitew, Addisu A.; Werker, Eric (October 2020). "Do natural resources help or hinder development? Resource abundance, dependence, and the role of institutions". Resource and Energy Economics. 61: 101183. doi:10.1016/j.reseneeco.2020.101183. ISSN 0928-7655.
  24. ^ Lampert, Adam (2019-03-29). "Over-exploitation of natural resources is followed by inevitable declines in economic growth and discount rate". Nature Communications. 10 (1): 1419. doi:10.1038/s41467-019-09246-2. ISSN 2041-1723. PMC 6440997. PMID 30926790.
  25. ^ Zhou, Jing (2023). "A Double-Edged Sword or a Blessing: Chinese Oversea Direct Investment in Latin America". dx.doi.org. Retrieved 2024-04-28.
  26. ^ Qian, Xiangyan; Wang, Di; Wang, Jia; Chen, Sai (December 2021). "Resource curse, environmental regulation and transformation of coal-mining cities in China". Resources Policy. 74: 101447. doi:10.1016/j.resourpol.2019.101447. ISSN 0301-4207.
  27. ^ Zarach, Zuzanna Helena; Parteka, Aleksandra (September 2023). "Export diversification and dependence on natural resources". Economic Modelling. 126: 106436. doi:10.1016/j.econmod.2023.106436. ISSN 0264-9993.
  28. ^ Ahmad, Mahmood; Ahmed, Zahoor; Yang, Xiyue; Can, Muhlis (June 2023). "Natural Resources Depletion, Financial Risk, and Human Well-Being: What is the Role of Green Innovation and Economic Globalization?". Social Indicators Research. 167 (1–3): 269–288. doi:10.1007/s11205-023-03106-9. ISSN 0303-8300. PMC 10078065. PMID 37304457.
  29. ^ Pedro, Antonio M.A. (2004). Mainstreaming Mineral Wealth in Growth and Poverty Reduction Strategies. Economic Commission for Africa. pp. 5–6. ISBN 9789211250978. Retrieved 20 March 2012.
  30. ^ Pegg, Scott (January 2006). "Mining and poverty reduction: Transforming rhetoric into reality". Journal of Cleaner Production. 14 (3–4): 376–387. doi:10.1016/j.jclepro.2004.06.006.
  31. ^ Weber-Fahr, M.; Strongman, J.; Kunanayagam, R.; McMahon, G.; Sheldon, C. (2001). "Mining and Poverty Reduction". Noord Internationaal WB PRSP Sourcebook. pp. 4–6. Retrieved 20 March 2012.
  32. ^ Timsina, Shrabya; Hardy, Nora G.; Woodbury, David J.; Ashton, Mark S.; Cook-Patton, Susan C.; Pasternack, Rachel; Martin, Meredith P. (December 2022). "Tropical surface gold mining: A review of ecological impacts and restoration strategies". Land Degradation & Development. 33 (18): 3661–3674. Bibcode:2022LDeDe..33.3661T. doi:10.1002/ldr.4430. ISSN 1085-3278.
  33. ^ Banza Lubaba Nkulu, Célestin; Casas, Lidia; Haufroid, Vincent; De Putter, Thierry; Saenen, Nelly D.; Kayembe-Kitenge, Tony; Musa Obadia, Paul; Kyanika Wa Mukoma, Daniel; Lunda Ilunga, Jean-Marie; Nawrot, Tim S.; Luboya Numbi, Oscar; Smolders, Erik; Nemery, Benoit (September 2018). "Sustainability of artisanal mining of cobalt in DR Congo". Nature Sustainability. 1 (9): 495–504. Bibcode:2018NatSu...1..495B. doi:10.1038/s41893-018-0139-4. ISSN 2398-9629. PMC 6166862. PMID 30288453.
  34. ^ Bray, John (2003). "Attracting Reputable Companies to Risky Environments: Petroleum and Mining Companies". Natural Resources and Conflict: Options and Actions. World Bank Publications. pp. 287–347. ISBN 9780821355039. Retrieved 2012-03-12.
  35. ^ Brereton, D.; Forbes, P. (2004). Monitoring the Impact of Mining on Local Communities: A Hunter Valley Case Study (PDF). CSRM. pp. 12–13. Archived from the original (PDF) on 2018-05-17. Retrieved 2012-03-22.
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