Availability of environmental resources and the
conditions in which we find them depends up on:
1.
The Environment where the resources occur
2.
Attitudes of people towards them, and…
3.
How the resources are controlled and managed.
Human factors that are important in Resource
exploitation and management include:
1.
The type of ownership arrangements,
2.
The political climate – democracy, socialism,
3.
The legal framework
4.
Other Social Institutions (family, kinship arrangements, religion) involved in the management, exploitation and allocation
of resources.
Fundamental questions in Resource
Exploitation answered by Social Institutions:-
1.
Should resources be regarded merely as commodities that are bought and sold or
something more
than that?
2.
Should resources be regarded as an inheritance passed down to generations or
something in which
all humans have a
share?
3.
Should the resources available to the whole community be owned privately or
collectively?
4.
How should resource ownership be transferred from one person to another?
Economic Systems:
An
economic system refers to structures in society within which we make decisions
about:-
(a) What to produce (goods & services)
(b) How to produce the goods and services,
(c) Where to produce them, and…
(d) How to allocate and distribute the goods and
services to meet demands.
The Four main kinds of Economic Systems are:-
1. Traditional (subsistence) Systems,
2. Market or Commercial Systems
3. Centrally Planned Systems, and…
4. Mixed Economic Systems
1)
Subsistence Economic Systems:
An economic system under which people produce just
enough goods to feed their households with very little left for sale or for exchange
in the market.
Characteristics
of Subsistence Economic Systems:
a)
Production is geared towards subsistence (the family) and basic survival.
b)
Trade is mainly by a barter system (direct exchange of goods and services).
c)
Market and money are of little importance
d)
Custom and traditions are major influences on what is produced and how products
are allocated.
2) Market
(Capitalist) Economic Systems:
Under
capitalist economic systems, decisions about what, how, and where to produce a
particular good are determined by market conditions such as supply, demand and
price.
Characteristics:
a)
Production is large-scale and geared toward markets
b)
The market (price) determines allocation and use of society’s resources
c)
The price mechanism determines supply and demand of goods and services
d)
Competition among producers works to ensure stable and lower prices for
consumers
Drawbacks
of the Market System:
a)
Since market does not exist for some resources, only some environmental
resources might be used
and exchanged in
the society.
b)
The long cycle of production of some crops (e.g. timber and tree crops) does
not allow for rapid
adjustment of
demand and supply so gluts and shortages often follow in succession.
c)
Market forces do not relieve resource problems when price decreases spur on
demand but
shortages of the
commodity fail to stimulate immediate increase in supply.
d)
Strong demand and high prices may encourage supply to the point that a resource
would be
depleted beyond
its critical limit.
e)
Externalities or environmental side effects (i.e. air and water pollution)
result from market
operations.
f) Part of the cost of production is borne by
society and not the businesses
g)
Cartels and Monopolies manipulate supply to influence prices (and hence
allocation of resources).
h)
The market system separates consumers of a good (e.g. oil) from its producers
and from the
production site
hence responsibility for consequences of production is weakened.
i)
Businesses are pre-occupied with profit
making so the environment is often sacrificed.
3)
Socialist or Centrally Planned Systems:
Under
centrally planned economies, decisions regarding what commodity to produce, how
and where to produce and how to distribute the products are made by government
rather than the market.
Characteristics:
a)
Central government takes over decisions about production and marketing of
goods.
b)
Price controls keep prices low but discourage production
c)
Attempts are made to allocate goods and services according to the needs of
individuals???
d)
Private ownership of resources is restricted
e)
The role of the market in determining prices, allocation of goods etc. is
limited
a) Government
control creates little incentive to work hard or produce goods and services
b)
Serious resource problems including severe hunger and famine are rampant
c)
There can be extensive environmental damage.
d)
There is the question of who will guard the government if something goes wrong.
e) Individual initiatives are discouraged and the
people look up to the government for the solution to
their problems
4)
Mixed Economic Systems:
Mixed economic systems combine elements of market
and command economies. It is currently the most common economic system.
Characteristics:
Most mixed systems are capitalist in character but
are generally a mixture of market and centrally planned economies. Governments
often intervene to modify the market economy (prevent monopolies, influence
prices, and offer incentives to increase production).
Intervention in resource management by the Government
1. The state as an arbiter, adjudicates between
different claims, pressures, concerns and needs arising within society.
2. The state and capitalism are inextricably linked
for the state promotes the interests of capitalism
Reasons for Government Intervention
a) There are no markets for public goods (e.g. clean
air and water, scenery and wildlife). These
amenity resources are often wasted.
b) Externalities
are passed on to others and society as a whole.
c) The market
may encourage over-exploitation of resources owned by individuals and companies
beyond critical limits.
d) The desire
to promote social justice and equity in a country by providing sufficient
access to
resources.
e) To protect
groups (e.g. farmers) whose production are essential but may not be able to
compete
and survive the market when left alone.
f) Considerations
for national security (e.g. food production under war conditions).