Economic Resources and Mother Nature - Essay Example

With the advent of technological advances in information technology, communication and knowledge management the whole Globe has become very tiny world. The alarming rate at which NATURAL RESOURCES are consumed is a concern for all living beings as this may create ecological imbalances that adversely affect the GLOBAL VILLAGE. These eco imbalances ultimately result in economic imbalances that may result in hatred and enmity among living beings of various regions. Hence NATURAL RESOURCES EXHAUSTION is a GLOBAL CONCERN. It is necessary to understand the type/nature of resources, causes of exhaustion to device a price/market mechanism that may resolve the problem of APPROACHING EXHAUSTION of NON-RENEWABLE NATURAL RESOURCES. Mother NATURE has gifted abundant resources for the benefit of all living beings. The type, nature and quantity of these resources are formed and balanced by nature depending on the geographical and environmental conditions prevailed/ prevailing in a geographical region. The core resources of MOTHER NATURE are LAND, WATER and ATMOSPHERE which can be considered as LAND, CAPITAL and LABOUR in TERMS of ECONOMICS These core resources serve all living beings by producing a variety of useful goods and services. Few examples are food (produced by plants and other agriculture crops), medicinal plants, transportation media, breathing air, picturesque views, oils, minerals etc from earth's mantle etc. These NATURAL RESOURCES can be classified into APPROPRIABLE RESOURCES through which the owner can gain full economic value either by exchanging the outputs produced by using the resources or the resources E.g.: Owner can sell agricultural produces of the land or minerals/oils/gas or trees. These resources and their outputs would be allotted and priced effectively. IN-APPROPRIABLE RESOURCES that are used free of price and are costly to the society of living beings. They result in EXTERNINALITIES i.e. situations in which production or consumption imposes uncompensated benefits or costs on other living beings. E.g.: Usage of clean water by an upstream industry and dumping toxic water to downstream without compensation to provide clean water. Both appropriable and in-appropriable resources can be categorized into RENEWABLE NATURAL RESOURCES that can be replenished almost regularly and their outputs can be indefinitely used by effectively managing them. E.g.: Seasonal forest produces/fruits/vegetables, Agricultural land, River waters, Forests, Aquaculture, Honey etc. NON- RENEWABLE NATURAL RESOURCES whose quantity is almost definite/fixed in supply and regeneration is not quick enough to be economically relevant. E.g.: Fossil fuels, Natural gas, Minerals, Granite, Marble, Clay Sand etc. whose Formation took may be millions/billions of years. PRICE MECHANISM MECHANISM is a system of controlled interactions of various inputs to produce useful outputs. Mechanism, as applied to PRICE can be understood as a system of interactive processes between needs of prospective consumers and prevailing /possible future market trends. Price mechanism, also called market mechanism is the basis to decide/determine resource allocation, types, quantity, quality of goods and services to be produced. Human wants and desires do not have any boundaries, once their basic needs of FOOD, CLOTHING and SHELTER are fulfilled. Wants/desires appear to be needs depending on the living environment. They are continually dynamic without any limits and influence the trends of market supply and demand chain configurations. Prices are agreed expressions of the value of products/services for exchange and every society that allows exchanges has prices. Inter relation of individual prices results in the existence of a price system. A variety of economic forces bind the prices to form a price structure. Price mechanism is a means to organize an economic activity by meaningfully linking the decisions of consumers, producers and holders of productive resources across the globe. In the modern economy, it enables economic agents to meet the demands of each other. Price mechanism can be structured either to encourage or discourage the main functions, as mentioned below, of any economic activity. PRODUCT - QUANTITY & QUALITTY Choice of quantum and quality of products/services to be produced. E.g.: Food, clothing and shelter for all, education and employment, Machinery, Weapons, Tools, Raw Materials & Food Products for Export Etc. The LAW OF DEMAND may not hold good every time as a universal law in dynamic social life in which consumers' fancies are influenced by their relative wants/desires in proportion to their earnings and offered prices. PRODUCTION Decide ways and means of producing the choice products/services The ways and means finalized must be to achieve effective use of resources for optimized productivity. E.g.: Locally available raw materials and workforce. Training local workforce to meet the technical skills needed. Price in relation to Product's functionality & useful life etc. DISTRIBUTION Individuals earn wealth by investing their resources (natural/inherited/acquired skills). The earnings are governed by the amount of resources used by them. Hence both personal ability and wealth influence distribution of income, goods and services. All the above economic functions are precise subtle when a price mechanism functions reasonably well. USAGE OF NON-RENEWABLE RESOURCES-CHALLENGES Population growth, increasing affluence, technological competitions, urbanization, industrialization, etc. are contributing their might towards the rapid consumption of Non-renewable natural resources both by developed and developing countries. The consumption rate is almost exponential resulting in many unforeseen EXTERNALITIES that cannot be controlled by price mechanism. These externalities are pollution of core resources of Mother Nature resulting in global environmental problems like GREENHOUSE GASES, OZONE LAYER DEPLITION ETC. LEDING TO HARMFUL GLOBAL CLIMATI CHANGE that may adversely effect the future generations. They also lead to an imbalance of ecosystems resulting in unprecedented/uncontrollable floods, earthquakes. Forest fires, droughts, desert formations, new diseases and other natural disasters like tsunamis etc. MOTHER EARTH may be using oil & natural gas, for example, as SHOCK ABSORBERS and other minerals to counter balance the forces of solar system for well being of all living organisms. Mother earth can only bear this unscrupulous consumption of non-renewable resources until its eco balance is no longer controlled by itself. Once that movement approached, without any prior warning the living beings may pay a heavy penalty of being extinguished. WHAT CAN BE DONE Governments, irrespective of developed developing or under developed nations should unit to decide and evolve a mechanism to utilize non-renewable resources in controlled manner to (i) Ensure and assure basic essential needs viz. FOOD, CLOTHING and SHELTER suiting the geographical conditions of the region, irrespective of cast, creed, religion and other political enmities which are human created. (ii) Promote and implement products/services that are based on locally available renewable resources that promote contended and happy life to live adjusting with MOTHER NATURE. . (iii) Commit for co-operation, coordination, communication and convergence of energies for a healthy and peace loving human beings that help each other by sharing. REMEMBER HEALTH is WEALTH and A HEALTHY MIND GENERATES CONSTRUCIVE IDEAS. (iv) Discourage migrations across nations for gains of wealth. (v) Encourage and promote recycled resources/byproducts than virgin resources. (vi) Implement education that imbibes a happy co-existence with MOTHER NATURE by using natural renewable resources. (vii) Inculcate humanitarian approach, though slow, which conquers millions of hearts across the globe. Remember A MORSEL OF FOOD IS WORTH THAN MILLIONS OF CURRENCY PEACE and FRIENDLY APPROACH IS, in along run, THE SURE WINNER THAN PUNISHMENT Bibliography Web sites http://www.britannica.com/nobel/macro/5001_98_11.html http://www.mayin.org/ajayshah/MEDIA/1998/pricediscovery.html http://www.alaskaneconomy.uaa.alaska.edu/nonrenew/nonrenew.htm http://66.102.7.104/searchq=cache:jcBDkjTyILAJ:www.epa.gov/epaoswer/osw/kids/quest/pdf/03factsh.pdf+non-renewable+natural+resource&hl=en http://www.antiwar.com/blog/comments.phpid=P1570_0_1_0 http://cjc-online.ca/viewarticle.phpid=360&layout=html http://www-personal.umich.edu/alandear/glossary/p.htm Book referred SAMUELSON NORDHAUS ECONOMICS SIXTEENTH EDITION AUTHORS: PAUK A.SAMUELSON, Institute Professor Emeritus Massachusetts Institute of Technology WILLAM D.NORDHAUS A. Whitney Griswold Professor of Economics Yale University Read More