Ecological Economics - Essay Example

Ecological Economics   Lecturer: presented: Introduction Humans depend on the environment for food, energy, leisure, medicine and raw materials for factories among other uses. Any action that human beings are involved in affects the environment in one way or another. Economic uses of the environment are significant in the degradation of natural systems as well as endangering human life. When people discover natural resources that have economic value, they maximize their extraction regardless of the fragility of the environment. Companies are established to take advantage of the free resources and eventually competition results with each player trying as much as possible to maximize the economic gains. The people who have no power are denied access to the resources as large industries form cartels to control their extraction. In many cases, governments favor the wealthy companies that are a major source of revenue. The environment is exposed to degradation and the poor suffer from the impact. When they discover their rights, crisis between them and the owners of the companies result. The government is compelled to intervene to quell the crisis and this leads to more protests and loss of lives. This paper presents a case study of oil mining conflict in the Niger Delta, Nigeria. It discusses the social, economic and institutional dimensions of the environmental problem that has resulted from the oil mining and refining activities. The paper also evaluates the known and unknown facts regarding the issue as well as some possible options to address the problem. Relevant Human Dimensions of the Problem Economic Aspects Hanley et al. (1996) argues that it is only when people satisfy their financial needs that they remember the non-renewable characteristic of natural resources. The problem in the Niger Delta escalates as a result of humans focusing on the economic gains derived from exploitation of the oil reserves, disregarding the consequences on environment. The petro-business is a significant source of government revenue. Oil extraction largely affects the environment through oil spills from the high pressure pipelines that cross through the villages. The inhabitants of these villages are aware of the dangers posed to their health by the oil spills and also know that the companies involved reap huge benefits from the oil business (Ibeanu, 2000). They are aggrieved by the fact that they do not get a share of what they believe are their own resources. Environmental pollution and injuries on the community members result from the activities of the petroleum companies, which emphasize on their right to extract the resources without disturbance especially considering the industry’s contribution to government revenue. People use natural resources the way they do because of varied reasons especially if the goods serve the interests of more than one group. Unless there are rules to curtail the overuse of the resources, there is usually a high risk of depletion (Acheson et al. 2006). The owners of the oil companies believe that they have a right to extract oil because they contribute a great deal to the economy. Social Aspects Social aspects of the situation are based on the fact that when people have an opportunity to exploit a common good, there tends to be competition and rivalry, which leads to hatred and uncontrolled degradation of the resources (Gardner & Stern, 1996). The marginalized villagers view the government and the petroleum companies as the hindrance to the accomplishment of their financial needs. For this reason, problems originate from the communities such as the Ogoni and the Ijaw demanding their rights to a share of the resources, especially their farmlands for which ownership has been affected by the expansion of the oil fields. The result of conflict among the people involved in environmental degradation escalates the problem. An example is when the angry youth crash with government forces, the result is usually devastating to the environment. They destroy the pipelines in a bid to demonstrate their discontent. As a result, the oil spills and fires escalate environmental degradation. On the other hand, the villagers are rendered homeless as the security forces descend on their homes. In a bid to deal with uprising in a community, the security forces generate and promote hatred and mistrust among the members such as what happened among the MOSOP of the Ogoni. Moreover, ethnic hatred is also used to quell unrest in one community by the other. As members of one community fight among themselves, environmental issues are forgotten (Gardner & Stern, 1996). Institutional Aspects The theory behind the conflict in Nigeria over oil is the fact that natural resource management is broader than the natural resources alone. It involves a number of stakeholders, such as the community, the government and investors whereby each needs to be committed to a particular role in natural resource management. On the other hand, the distribution of economic resources is a critical determinant of the success in natural resource management. When one of the stakeholders feels marginalized, there is a likelihood of resistance and the eventual failure in natural resource management. The government is the key stakeholder especially in policy development. Good governance involves development of policies that do not favor one group at the expense of the other (Haas, 2006). In the case of Nigeria, the petroleum companies adversely affect policy decisions and virtually control the same power as the state government. The government on the other hand needs the natural resources to be utilized for it to acquire the finances needed for it to govern the nation. The community bears the brunt of the problems caused by the oil companies with government blessing. Known Facts regarding the Issue It is clearly known that the cause of the problem is from the oil companies trying to maximize profits at the expense of the environment and the public. The people’s reaction to the pressure by the companies is based on a wide range of issues such as denial of a share of what they believe is rightfully theirs. Environmental pollution and lack of basic resources such as water and injuries due to the constant fires are known to be genuine reasons for the discontentment of the villagers neighboring the oil fields. It is also well known that the impact of the oil companies on the environment is devastating, and that they are unlikely to leave the oil fields due to the profitability of the business. Axelrod (2004) argues that multinational companies may be powerful enough to the extent of influencing government policy decisions in some nation states. The government is aware that the lives of its people are endangered and that there are no appropriate regulations to protect them from the dangers they are exposed to, such as the mercury deposits that may get in to the human food chain through the fish however, it is known that the oil companies have great influence on the government due to the revenues collected. According to Deveer & Pierce (1997), such trends in policy development are a sign of decline of the nation state that is associated with globalization of powerful multinational corporations. Unknown Facts regarding the Issue It is not clear whether the people may stop resisting if they were given a share of the resources regardless of whether environmental pollution continued. The interests of the leaders of the resistance groups, CBOs and NGOs on the other hand seem not to represent the common people living in the villages since as Ibeanu (2000) observes, the MOUs that were intended to address the adversity faced by the communities ended up benefiting the elite and the wealthy who inhabit the townships. The conditions are still the same for the villagers and the youths who are only mobilized by the CBOs and the NGOs when the leaders are discontented with the government or the oil companies. These groups that are still marginalized are not sure whether they have benefited from the MOUs. Abel (2001) observes that dealing with environmental issues is hampered by the disconnect that exists among the stakeholders. The oil companies and the government lack information regarding the grass roots and the needs of the majority villagers and the unemployed youths who are misrepresented by the NGOs and CBOs. Addressing the Problem Policies that bring the stakeholders together can enhance community satisfaction as well as environmental protection while sustainably exploiting the natural resources. Chapman (1999) observes that conflicts over environmental, economic and social issues can be minimized through strong government policies. Albeit the government benefits from the revenue collected from the oil companies, the question that arises is whom the revenue benefits if the people it intends to assist are impoverished and their lives endangered by the investors. It is therefore necessary to ensure that there is a clear definition of who the stakeholders are in the problem, their contribution to the alleviation of environmental degradation, their needs as well as how they can be effectively represented in the integrated environmental management (Haas, 2006). For example, the government, being the key stakeholder should encourage the villagers to raise their views though reliable community leaders rather than the CBOs, and NGOs, which are likely to be formed to take advantage of the promising change of attitude by the oil companies. The oil companies on the other hand need to develop strategies for corporate social responsibility, which as Esty (2009) observes is significant for the maintenance of stakeholder support in efforts towards environmental protection. The oil companies can also support community tree planting whereby the villagers can produce seedlings for which they are compensated after planting. Moreover, the companies need to ensure that they comply with international standards regarding environmental pollution and ensure that the people whose health has evidently been affected by the oil extraction and refining activities are compensated. The government also needs to ensure that the revenue gained from the oil is used to improve the standards of living for the locals by providing employment for the youth as well as provision of public services in the rural communities (Axelrod et al. 2004). Benefits and Limitations The benefits of the involvement of stakeholders in natural resource management are wide ranging. Troeh (2003) observes that when the community members are integrated in environmental conservation, they own the objectives and always strive to accomplish a shared vision. They benefit from the incentives offered for activities such as tree planting and cleaning of the environment thereby improving their standards of living. They are motivated to participate in natural resources management. On the other hand, the companies establish strong rapport with the people, which would help in dealing with the constant conflicts that lead to losses when the discontented villagers vandalize the companies’ infrastructure. The people would benefit from provision of public resources by the government, while on the other hand the expenditures incurred in quelling the clashes would be reduced. Moreover, the government would comply with international standards, which is important in avoiding international condemnation (Haas, 2006). On the other hand, there are many limitations in regard to the usage of resources and the benefits that each stakeholder gains from the involvement. For example, the oil companies are not ready to sacrifice much of their profits through corporate social responsibility. Their focus is to maximize profits with the least expenses. On the other hand, as Ibeanu (2000) observes, the policy making process is misinformed regarding the cause of the problem. It is believed that the disturbances among the people are as a result of their quest for money that they have not worked for. This misconception can not allow good policy decisions to be made. Moreover, the government depends on the revenue from oil companies and therefore it is not possible for it to consider the possibilities of the opportunity cost of favoring the villagers over the fulfillment of the investors’ interests. The oil and environment are public and common pool goods. The companies are focused on reaping as much profits from oil extraction. The villagers want a share of the resources as they believe that they have a right and that they should no be denied access (Acheson, 2006). The government is focused on maintaining enough security for the companies to ensure that there is maximum revenue collection. All these point towards the tragedy of the commons whereby each person wants to maximize the output of the common oil reserves (Dietz et al. 2003). The natural resources belong to all, and the community is aware that the people’s lives are at risk due to pollution. The community does not follow particular rules but holds a common belief that the local people are entitled to a share of the resources, compensation for health problem caused by the oil extraction and as well as the right to live in a clean environment. The government has no strong rule to oversee effective utilization of the resources. The formal rules regarding prohibition of the community from rioting against denial of their rights is a major source of discontentment. Further more, the rule that denies compensation of accidents from oil products exposed to the people through sabotage makes it difficult for genuinely hurt people to get compensation as they are assumed to be among those who sabotage the oil infrastructure. Conclusion The problem in the Niger Delta is escalated by the interests of humans to maximize their gains from the natural resources. This results in high levels of environmental degradation and conflict between the locals and the oil companies. Natural resource management needs to incorporate people, institutions and all the stakeholders who are associated with the resources in one way or the other. Institutions should be strong enough to establish strong rules that enhance protection of natural resources especially because they are exposed to degradation when there is uncontrolled extraction. Strong government policies can enhance stakeholder involvement in environmental protection. Companies need to be encouraged to practice corporate social responsibility for sustainable environmental protection and utilization of natural resources. References Abel, D. 2001. Environmental Issues: Measuring, Analyzing, Evaluating, Prentice Hall Acheson, J. M. 2006. “Institutional Failure in Resource Management”. Annual Review of Anthropology, Vol. 35 pp 117-134 Axelrod, R., Downie, D. L. & Vig, N. 2004. The Global Environment: Institutions, Law, and Policy, 2nd Edition, Washington, DC: CQ Press Chapman, D.  1999. Environmental Economics: Theory, Application, and Policy, Prentice Hall Dietz, T., Ostrom, E. & Stern, P. C. 2003. “The Struggle to Govern the Commons: Tragedy of the Commons?” Science, Vol. 302, pp 1907-1910 Deveer, D. V. & Pierce, C. 1997. Environmental Ethics and Policy Book: Philosophy, Ecology, Economics, 2nd edition, Belmont: Wadsworth Publishing Company Esty, D. 2009. 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