Course:ECON372/OK2019WT2/Topic21

Globalization and Natural Resources

Group #1

https://www.eco-business.com/opinion/globalisation-may-actually-be-better-for-the-environment/

Summary

This article comes from the eco-business only publication, it discusses how globalization could actually be beneficial for the environment in the long term. Noting the existing notion that globalization leads to the “race to the bottom hypothesis”. where gains from globalization are achieved at the expense of the environment. However the article argues that not only would deglobalisation be worse as most places would not have accessibility to many necessary natural resources. But also that the resulting inefficient allocations of resources in such a system would actually mean more natural resource use and a rise in emissions. The article then looks at how organizations like the world trade organization (WTO) have helped lower impacts on the environment with advances in globalization. This has been done by putting in place several trade related measures to take into account environmental protection and natural resource use.

Analysis

Though globalization has led to a large increase in resource use and GHG emissions it has also allowed for a global economic system in which specialization allows for more to be made with less. This result in more efficient natural resource use allows countries to provide what they are best at making and creates less waste. Countries therefore do not have to subsist on their own natural resources as they can benefit from others. This inturn has also helped in making the world more interdependent as countries rely on each other for natural resources and manufactured goods. This will not only lead to less conflict but also more international cooperation in combating environmental issues and achieving more sustainable resource use.

Category	Mark	Comments
Article Source (10)	10	Note that this is the same article as last group. Will let it pass this time.
Article Relevance (10)	10
Summary (20)	20
Course Related Analysis (30-50)	40	Note that there is also a free rider problem. No guarantee that we will get anywhere near efficiency.
Extended Analysis (0-20)
Presentation (10)	10
Total	90

Group #2

https://asiatimes.com/2020/04/china-seizes-covid-19-advantage-in-south-china-sea/

Summary:

The South China Sea is a hotbed of territorial disputes. With many countries claiming different parts, as well as an international set of laws (the UNCLOS) that is not strictly followed, this body of water has a lot of virgin oil deposits, as well as a wide range of other valuable sea resources. During the Wuhan coronavirus (COVID-19) pandemic, the People's Republic of China announced it has conducted many "commercially viable" activities in these disputed area. These actions include oil hydrates drilling, mineral extracting, and conducting military drills during February and March - months where the virus starts to spread in the Western sphere. Despite China's aggressive strategy to handle its nine-dash line claim, the other Southeast Asian claimants of Vietnam, Malaysia, and the Philippines do not have any counter-measures, as their resources are focused on dealing with the widespread disease. Even the United States Navy, which commonly acts as a semi-peacekeeping force in this Indo-Pacific region, are limited by the emergency situation back home. China's continuous military intervention and economic exploitation of the sea remains a topic of high scrutiny from many security and political experts.

Analysis:

This article of political analysis touched on the subject of natural resource sovereignty, especially in the context of sea contests. Even though UNCLOS delineated exclusive economic zones (EEZ) to each country of claimant, the PRC's opportunistic exploitation of these resources in disputed waters show that ownership does not mean direct control, as many political intents are behind them. In the short term, China may gain a permanent position in the disputes from capitalizing on the miseries of the coronavirus. Assuming this is the case, the undermining of international laws by China as it further its claims would have made the ambiguity of ownership and control even more conspicuous. The inaccessible resources may also keep commodity prices high for the remaining nations, hence minimizing their consumers' and producers' benefits. This trend, along with globalization, may result in even worse income disparity between the ASEAN parties and China. The conservation of these oil deposits, seafoods, and minerals can be worsened by their unclear proprietorships. If many other countries have the power to follow China's expansion, the sea will become a case of overdepletion from open-access resources, and hence overconsumes at a socially inefficient rate. With abundant non-renewable resources, "big powers" like China may not have a high incentive to reinvest these resource rents into renewable capitals, and the smaller nations are deprived of the means to do so in order to follow their sustainable restructure of the economy. Without any clear talks for multilateral trade deals, natural resource agreements, or non-intervention treaties, the case of the South China Sea remains a heated issue in the years to come.

Category	Mark	Comments
Article Source (10)	8	Strongly opinionated, anti-China
Article Relevance (10)	8	Some mention of resources, but not core of article.
Summary (20)	20
Course Related Analysis (30-50)	40	A different interpretation is that military power is being used to capture open access resources that are otherwise trying to be managed through international agreements. The latter are vulnerable to free riding. However, when the resource falls under the jurisdiction of a single nation, it can implement efficient management policies. The distributional issues - resources being captured by nations that are wealthy enough to have military power, over the opposition of poor nations that have a more urgent need for access but lack the resources to exert a claim - is a big issue.
Extended Analysis (0-20)
Presentation (10)	10
Total	86

Group #3

https://www.cnn.com/2020/03/09/business/oil-price-crash-explainer/index.html

Summary:

Due to the coronavirus pandemic, the demand of oil over the world has decline which would cause a decreased price of oil. Saudi Arabia has the strongest power on the world and wish to pretend a decreasing price on oil through an agreement with the oil allies. However, Russia did not agree with the agreement that reducing the production of oil to stabilize prices under current circumstance. Indeed, Saudi Arabia attempted fighting back for better market share by putting down the price of oil. The oil price was down 22% at $35.45 per barrel; US oil decline about 20% and traded at $33.15 per barrel.

China, the world's largest energy consumer, has severely reduced its energy demand on oil as most factories have ceased operations due to the severe epidemic. In the oil price war, China, India and Germany are more likely gain the benefit of decreased pricing. Although the production cost has been dropped because of the price war, the global growth has been slow down due to reducing demand on consumption. On the other hand, United State has faced losing the market shares and suffered in the price war. Other countries, such as Kuwait and the United Arab Emirates, the production cost of oil is $70 per barrel. As a result, the price war has absolutely affected the oil production and profits of various countries.

Analysis:

The decline in oil prices is undoubtedly a disadvantage for oil-producing countries. Since the world price of oil have fallen, profits from oil production have reduce or are recess. The price war may last for a certain period of time, but the future prices of oil will return to normal, and exporting countries can maintain normal profits of exporting oil. The United States is one of the world's major oil exporters. The United States may need to consider reducing production of oil and reduce the damages from price war. For Saudi Arabia, the cost of producing oil is much lower than other countries, and they can still make a profit by selling oil at a low price. Therefore, Saudi may be the biggest winner in this price war. China is one of the world's largest oil consumers. Therefore, China could consider reducing domestic production and buying oil from other countries. Since Saudi oil prices are lower than those produced locally in China. However, Russia's main oil importer signed a ten-year trade agreement, so China has won a lot of benefits in the price war. The oil price war has caused a lot of economic losses. In addition to the epidemic, people's purchases have fallen which lead to reduce demands in the economy. As a result, this has caused a decline in the world economy.

Category	Mark	Comments
Article Source (10)	10
Article Relevance (10)	10
Summary (20)	14
Course Related Analysis (30-50)	25	This is largely a repeat of the summary, not an analysis. Key issues we have talked about include volatility in international markets and vulnerability of nations that depend on resources. The overriding question is is this efficient? Is it better to have a successful cartel shorting the market and keeping prices high, or to have aggressive competition and low prices? How does this relate to the efficient extraction rate for the resource? What other factors may be at play - electrification, polices to fight climate change, ...?
Extended Analysis (0-20)
Presentation (10)	7
Total	66

Group #4

Is the world running out of sand? The truth behind stolen beaches and dredged islands

Summary:

In July 2018, Neil Tweedie writes for The Guardian an article highlighting the crucial importance of extracting sand sustainably and notes that the issue of illegal smuggling of the good is a global problem affecting everyone. The article begins with pointing out the gravity of the issue, and argues first of all that given that we area descendants of water-loving apes, we are hard-wired to seek out beaches. Furthermore, Tweedie reminds the reader that of all the natural resources we have, sand should ordinarily be thought of as an analogy for the infinite, a limitless resource. The number given in the article states there is about -7.5 x 10 to the 18^th power +/- the odd trillion. Although there is an incredibly high volume of sand in the world, our insatiable appetite for new buildings, roads, coastal defences, glass, fracking, and electronics threatens the places Tweedie claims we are designed by evolution to love most. Th author further claims humanity is consuming between 30 and 40bn tonnes of building aggregate a year, where half of that is sand. In fact, sand is second only to water as a natural material extracted by humans. The insatiable demands of China and India for housing and infrastructure is primarily given the blame for the fast growth of production in the last five years; however, the issue extends beyond just Asia but across the world.

The problems with extracting too much sand brings a world of problems. One of the issues with extracting sand is that it needs to have a certain size, being correct gritty texture and purity, washed clean by running fresh water, in other words, it needs to be the “right kind of sand”. The article notes here the example of Burj Khalifa being built on primarily imported riverbed sand. Since sand accounts for 85% of the total weight of mined material in 2014, the article notes the issue of sustaining our consumption as sand is only replenished by rock erosion only over thousands of years. Given the high and growing demand, the estimated worth of the industry to be £50bn and scarcity makes it vulnerable to illegal exploitation, particularly in the developing world. The rise of criminal activity in sand mining is referred several times in the article to be conducted by Sand Mafias. Operating from Jamaica to morocco to India and Indonesia, these sand mafias ruins habitats, remove whole beaches by truck in a single night and pollute farmlands and fishing grounds, protected by means of corruption and intimidation. The article sites two cases in India where such threats or acts were carried out in a conflict with the sand mafias.

With regards to externalities, the article notes that international trade in sand is rising and causing destruction of habitats vital to fish, crocodiles, turtles and other forms of riverine and marine life. This in turn accompanies the destruction of sand barriers and coral reefs which are protecting coastal communities. Consequently, this will lower the water table, pollutes drinking water, and can foster deadly diseases in stagnant pools created by the extraction. The chain of effects and consequences are depicted in the example of Bhaskar Rao Patil who once lived comfortably off the fish of the Savitri River south of Mumbai. Since the sand dredger across the river started sucking up the sand the habit is ruined and Patil who once could support five families, can now only support two.

Finally, the article suggests some measures to sustain or at least maintain beaches and the natural sand. The first measure that is taken by some is “Beach nourishment”. Here Tweedie sites Andrew Cooper who claims this will not help but rather disrupt the natural movement of waves and sand along the shore. Creating more damage than it prevents long term. The second suggested measure is to use waste plastic in making concrete and replace 10% of the natural sand. Third solution requires a more intelligent design, Tweedie says. He argues a team at Cambridge University is using computer modelling to size concrete more efficiently and cut waste as many concrete structures are incorporating beams that are thicker than necessary. The article concludes with a brief statement from Aurora Torres warning that neither of those measure will eliminate the need for sand and that stricter monitoring and enforcement in the developing world are required.

Analysis:

Since early ages of industrialization, sand has always been a vital resource for humanity as a whole, producing brick, concrete, glass, paint, roads and water filtration among many other things. The world is running out of sand and has been reported on numerous times in the media the last few years. There are however no resource cartels like OPEC that specialize in the trade of sand. This could be due to the already vulnerable industry being exploited by criminals and the requirement of a very particular “right kind of sand”. For these reasons, it is difficult to imagine the creation of any Multi/bi-lateral agreement being implemented in the coming years. The issue of removing crime from extracting sand is directly connected with this issue of creating the necessary treaty and any agreement that will, as Torres recommend, implement stricter monitoring and enforcement in the developing world will only incentivize sand mafias to find new ways to operate as usual. The article mentions Singapore as one of the chief importers of illegal sand from Indonesia. Claiming Singapore reported only 3 out of the 133m tonnes of sand they received from Malaysia in 2008. Given Singapore’s larger economic growth and their strong political influence in the region, they are able to exploit a developing nation’s inability to conserve, extract or protect the vast sources of resources that could otherwise be used for production. It is therefore a not only a question of environmental stability but also of national sovereignty. Legally speaking Singapore, or at least the sand mafia, is directly violating this sovereignty by stealing sand but have never been charged with such allegations, only accused. Although the resource is used by Singapore to create more land area for their growing population and fostering economic growth, the method is not sustainable and the lack of international governance regulating the market allows the opportunity to regard growth first, sustainability second. As the article brings up similar examples in the UK, US, India, Jamaica, and Morocco it is clear that this issue is growing and have been for some while. As Torres marks at the end of Tweedie’s article “this is a hidden ecological disaster in the making. We will be hearing a lot more about sand in the coming years.”

Category	Mark	Comments
Article Source (10)	10
Article Relevance (10)	10
Summary (20)	20
Course Related Analysis (30-50)	30	More of a repeat of the summary than an analysis. Sand is a finite resource. How should it be managed for efficiency? There are clearly externalities. What does that say about the efficient extraction rate? Is it an open access resource? Why yes or no?
Extended Analysis (0-20)
Presentation (10)	10
Total	80

Group #5

https://www.theguardian.com/world/2019/mar/01/canada-boreal-forest-toilet-paper-us-climate-change-impact-report

Summary:

Globally, people have become more aware of the dangers of the use of plastics and fast fashion. However, major brands have been adamant about using sustainable materials in their production of goods and services, thus hurting the forests and climate. There have been many talks and discussions regarding sustainability, but one single product has been left out: toilet paper. Countries such as America have heavy use of toilet paper, especially the pillowy and soft kind. According to reports of two environmental groups, Stand.earth and Natural Resources Defense Council, their massive consumption of toilet paper seems to worsen climate change leading to an irreversible toll on the Canadian boreal forest. America accounts for 20% consumption of toilet paper worldwide; ironically, their population is slightly over 4%; this statement means that a four-person household consumes over 100lb of tissue.

Boreal forest covers approximately 60% of Canada and serves as a home to 600 indigenous communities. The vast forest cover absorbs a significant amount of Carbon dioxide from the atmosphere, which translates to annual emissions of 24 cars. In the search for the virgin pulp, about 28 million acres of the Canadian boreal forest have been cleared since 1996. In addition to that, the virgin pulp accounts for twenty-three percent of forest product exports in Canada. Most brands refuse to use sustainable materials because Americans are more concerned about the texture of tissue paper. Their marketing strategies on tissue paper bases on softness, unlike the rest of the world. Fortunately, many companies such as Natural Value and Seventh Generation are resorting to recycled materials to produce environmentally friendly products commonly used at the office and airports. However, big brands such as Kirkland, Angel Soft, Signature, and Charmin Ultra Soft are yet to follow this trend.

Analysis:

The news article that was found to be related to the topic on Natural Resource Economics is the one that was written by Sam Wolfson and published in The Guardian online newspaper in March 2019. The title of the article is “Wiped out: America's love of luxury toilet paper is destroying Canadian forests”, and it illustrates how major brands in North America have refused to make use of the sustainable materials to manufacture products such as the toilet paper, and have thus caused a devastating impact on the Canadian forests and climate. In the article, Wolfson (2019) argues that the heavy use of the pillowy soft toilet paper by Americans has already taken a histrionic and irreversible toll on the boreal forest in Canada, thus worsening climate change. According to the author’s research, boreal forest covers at least 60 percent of the entire Canadian land, and gives home to more than 600 indigenous communities. Moreover, the author also adds that due to its enormous size, the forest has the ability to absorb huge amounts of carbon dioxide equivalent to the emissions from 24 million cars per year. Americans have been found to be the leading destroyers of that forest cover because of refusing to use sustainable materials. Also, they tend to use luxury toilet paper because they are too concerned about having an ideal texture of toilet paper because of decades of marketing that surrounds the softness of the toilet paper. The paper is directly connected to Natural Resource Economics, especially in the part that talks about globalization and trade in natural resources. In this case, the trade in the natural resources is between Canada and the U.S. and due to various factors that are lightly touched upon in the course material, there has been constant depletion of the resources for the sake of income earned.

Category	Mark	Comments
Article Source (10)	10
Article Relevance (10)	10
Summary (20)	20
Course Related Analysis (30-50)	30	More of a summary than an analysis. Global trade increases demand for pulp relative to not having trade. This increase in demand for pulp from Canada increases production, harming the forest. Is it efficient? The described externalities suggest it is not. What can be done? Tax exports? Other possibilities?
Extended Analysis (0-20)
Presentation (10)	10
Total	80

Group #6

https://www.lsuagcenter.com/profiles/lbenedict/articles/page1528314293696

Summary:

This article explores the impact of population growth and globalization on sustainable agricultural systems. The article first explored arable land, farm size, and yields in the United States and globally. Farm productivity is the key to sustainable agriculture. Under the research of LSU AgCenter and other organizations, the growth rate of agricultural productivity in the United States is faster than in many other countries. Globally, as populations continue to increase, the total output of several significant crops will need to increase significantly by 2050. At current production rates, global production is expected to be insufficient. Global agricultural production will grow by an average of 1.5% annually over the next decade. Although the production of major cereals in the United States has increased significantly, another agricultural output has declined. If the current production volume is not changed, the increase in output will have a negative impact on the use, natural resource management, and overall profitability. Although the United States is in the lead, some countries with productivity improvements of more than 100% have similar trends. Due to the different farming methods in various countries, some countries can effectively use resources, but others cannot. In some developing countries, production is growing at an alarming rate, and productive arable land may also face competition from other sectors. The Food and Agriculture Organization of the United Nations (FAO) estimates that global food production must increase by 70% to meet the needs of nine countries. So it's essential to put it into practical use and increase productivity per acre. The second part of the article explores international trade and sustainable food systems. Trade is an indispensable way to meet the food needs of various countries. Only a small number of states can achieve the self-sufficiency of FAO. Most countries need to rely on trade to maintain their national food systems. Trade between countries is the key to a sustainable food system. The article concludes with a discussion of agricultural systems and natural ecosystems. The production of food and fiber that meets human needs can put tremendous pressure on natural resources and negatively impact biodiversity and ecosystem services provided by the natural environment. Sustainable agricultural systems require careful consideration of natural water resources, as approximately 600 million acres of land worldwide are irrigated. The United States and several other countries have implemented programs to protect and conserve soil. Countries need policies and technologies to increase resource efficiency and implement government mechanisms that can provide alternatives.

Analysis:

Sustainable agriculture refers to an agricultural system that adopts a certain rational use and maintenance of natural resources, implements technological changes and institutional reforms to ensure that the demand for agricultural products by contemporary humans and their descendants can be sustained. Sustainable agriculture is a kind of agriculture that can continuously meet the needs of contemporary humans for the quantity and quality of agricultural products without damaging the interests of future generations through management, protection and sustainable use of natural resources, adjusting farming systems and technologies, and maintaining and protecting The rational use of land, water, animal and plant resources will not cause environmental degradation, and it is technically feasible, economically viable, and widely accepted by society.

Make rational use of the international market. Based on domestic resources and environment carrying capacity, production potential and agricultural product demand, determine reasonable self-sufficiency target and agricultural product import priority, arrange the types and quantity of imports reasonably, grasp the import rhythm, maintain stability in the domestic market, and alleviate pressure on domestic resources and environment. Strengthen inspection and quarantine and quality supervision of imported agricultural products, improve the risk assessment mechanism for agricultural industry damage, and actively participate in the formulation of international and regional agricultural policies and international agricultural standards. Improve the quality of opening up. Guide enterprises to invest in overseas agriculture and increase their international influence. Cultivate large-scale enterprises such as grain, cotton, and oil with international competitiveness, support overseas agricultural production and trade cooperation with neighbouring countries, and improve the relevant policy support system.

Category	Mark	Comments
Article Source (10)	10
Article Relevance (10)	10
Summary (20)	20
Course Related Analysis (30-50)	25	More of a summary rehash and editorial comment than analysis using class concepts. Soil conservation was a topic in the agriculture chapter. Is globalization a problem for this? Can policies that support soil conservation exist with the increased demand from globalization? Article and summary notes that many countries cannot meet food requirements without trade. Is this a good or bad thing for the efficient use of resources?
Extended Analysis (0-20)
Presentation (10)	8
Total	73

Group #7

[1]

Summary:

In a March 24th (2020) article titled, "Western supply chains buckle as Coronavirus spreads" the Globe and Mails Jonathan Saul explains that even though the economy in China is starting to slowly recuperate, supply chains around the world are backing up due to the Covid-19 pandemic. This includes the supply line of medical and health related items to the most effected areas around the glob such as Italy, which are in dire need of aid. Saul states that the main problematic areas are with supply lines encompass transport logistics in this time of global lockdown. Air cargo, sea freight and truck transportation are all being hit hard by the global virus, with air transport being impacted the most as more airports shut down services. Border lockdowns are also impacting goods being transported such as getting goods to the United States from Europe. To get around this, companies are first sending their goods through Canada and Mexico, however this adds both time and costs to the transportation route. Alternatively the costs of directly sending goods to the US are ten fold, due to the limited space and storage. Amongst this, finding truck drivers who are willing to transport goods around Europe is becoming more difficult and also costly, as 'risk' wages are increasing and the drivers willingness to work in highly infected areas is decreasing. Moreover, transporters are having to pay 2 way freight charges for one way deliveries as many sectors who previously would have paid the return freight with goods of there own are out of production

Group #8

http://theconversation.com/globalization-may-actually-be-better-for-the-environment-95406

Summary:

Is globalization detrimental to the environment? An article from The Conversation titled "Globalization may actually be better for the environment" argues that the positive environmental effects of internationally integrated economies may outweigh the consequences of globalization. Some environmentalists argue that increased globalization causes a higher aggregate demand and therefore greater exploitation of the world's natural resources. The article analyses this claim by questioning whether the opposite, deglobalization, would result in less harm done to the environment.

To demonstrate recent anti-globalization trends in the world, the article uses the examples of Brexit, the Belgian opposition to the European Union/Canada trade agreement, and the United States trade war with China. The article next investigates whether the race-to-the-bottom hypothesis holds merit by studying deglobalization environmental impacts. This hypothesis argues that "increased gains from globalization are achieved at the expense of the environment because more open economies adopt looser environmental standards." The authors found that deglobalization may reduce emissions because environmentally friendly technologies, practices, and know-how are often passed on to pollution havens during international trade. Trade also allows countries to specialize in their comparative advantage, so through deglobalization there could be unnecessary duplication of production for many goods which would cause increased local emissions. Iran had this happen after it began refining its own crude oil rather that trading. this was harmful to the environment because their oil contained 10 times more pollutants than the oil it had previously improted.

The World Trade Organization (WTO) as well as many regional trade agreements (RTAs) stipulate environmentally friendly trade policies and impact assessments that countries must adhere to when trading internationally. An example of this is China's "tremendous gains in reducing their emissions" as they become a bigger player in the world economy. On the contrary, the United States has developed more anti-globalization inclinations. The country pulled out of the Paris Agreement and increased its use of fossil fuels and coal. The article suggests that deglobalization may shift countries from "sustainable development practices towards industrial policies" at the expense of the environment.

Analysis:

One of the benefits of globalization that both this article and chapter 21 of the Natural Resource Economics textbook touch on, is the allowance of international governance of natural resource trade. The World Trade Organization is the overarching governing body that encourages the "conserving of natural resources." The article also mentions regional trade agreements. These fall under the category of multilateral agreements which the textbook defines as "agreements among groups or countries with the objective of managing an important resource." Engaging in these trade agreements is beneficial for the environment because it promotes environmental cooperation. This supports the articles claim that globalization may be better for the environment.

Since natural resources are not distributed evenly among countries, it becomes more efficient to trade for the required resources. The textbook states that about one third of the total commodities traded and natural resources. Globalization and international trade allow countries to focus more of their energy on the extraction of the local natural resources that they have a comparative advantage in and trade for the relatively more difficult to acquire resources. This strategy can be more energy efficient and produce less negative environmental externalities than if the country operated as an autarky and had to produce everything it needed. We see an example of this when the article describes Iran's situation when it refined its own oil and released 10 times more pollution that the oil it used to import. Without trade, this was a necessary action which resulted in harmful consequences for the environment.

Category	Mark	Comments
Article Source (10)	10	Note, this is the same article as another group. Will let it pass this last time.
Article Relevance (10)	10
Summary (20)	20
Course Related Analysis (30-50)	40	Note that there can be a free rider problem in international negotiations. No guarantee that the outcome will be efficient.
Extended Analysis (0-20)
Presentation (10)	10
Total	90