Natural resources and growth. Although, natural resources influence economic growth, but the relation between prosperity and countries with abundant resources is not as easy to predict.

Lan Phuong Tran

Economic Geography (Online)

Spring 12

Air, wood, coal, petroleum, diamonds, solar and wind energy are some examples of the Earth’s natural resources. These sources occurred naturally within the environment. Many of these resources are essential for our continued existence while others are used for gratifying our wants.

As mentioned in the video, countries can boost their economical growth if these natural resources if they are to be used efficiently. Along with economical gain comes along with an increase international of political and military power. In addition, the video indicated that Europe was the first group of countries that went industrialized due to their growth of coal and iron industries. This in turn has gained them military advantages that allowed the European colonization of Africa, South American and Asia. During this time, the exploitation of these colonized nations’ natural resources had gain a tremendous amount of wealth to European countries.

Although, natural resources influence economic growth, but the relation between prosperity and countries with abundant resources is not as easy to predict. For instances, the video listed the Organization of Petroleum Exporting Countries (OPEC) nations in the Middle East have gained great wealth and political voice since the cartel, a group of sellers who join together to limit supply, formed in the 1960s. Cartel members united to enjoy the increase the price since so many other economies depended on of their product. On the contrary, continent with an abundance of natural resources such as Africa tend to have a lesser amount of economic growth and worse development outcomes than countries with fewer natural resources due to the consequences of specialization, conflicts within societies as different groups and tribal fight for their share or the tug of war between people and government. The film listed Angola as one of the countries that is currently struggling through these issues.

Possible solution for issue such as specialization of natural resources in Africa is the idea of diversifying the country economic into other sectors in order to stimulate growth. However, this would not be accomplished easily due to the political status in Africa. Other solutions that mentioned in the video are energy conservation, nuclear energy, and solar energy.

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Energy conservation is a vital part of reducing climate change. Energy conservation refers to the attempt made in order to reduce energy consumption. This can be achieved through increased proficient energy use, in combination with decreased energy consumption. Through out the world, energy conservation facilitates the alternate of non-renewable resources with renewable energy. Energy conservation is often the most cost-effective resolution to energy shortages. According to Ministry of Economy Trade and Industry, The Energy Conservation Center promotes energy efficiency in every aspect of country such as Japan. According Building Britain’s Future magazine, the Low Carbon Transition Plan launched by the British government in 2009 intends at thirty percent of renewable and of forty percent of low carbon dioxide content fuels in electricity generation by 2020. In country such as Iceland, about eighty one percent of total primary energy supply is obtained from domestically produced renewable energy sources (Renewable energy in Iceland, 2009). The United States have incentives to encourage its citizens to get involve in energy conservation. Some of these programs are The Energy Policy Act of 2005 which provide a tax credit of thirty percent of the cost of the new item with a limit of $500. The plan supposed to expire at the end of 2007 but was prolonged to 2010 and the collective limit increased to $1,500 by the Energy Improvement and Extension Act of 2008 and The American Recovery and Reinvestment Act of 2009 (Database of State Incentive for Renewable and Efficiency, 2010).

In my opinion, the challenge to become energy independent is a national and economic security issue. Similar to any other economic motion, the fundamentals of supply and demand implied here. The fact is that oil prices are gradually climbing to be above $100 for the past few months, despite strong political pressure to lower them. We can put blame the OPEC policies, and the oilmen, or politicians will not solving the problem. We can not turn back the clock, but we can take serious steps towards employing promising, abundant, and clean energy sources such as Solar and Wind. We do not need the government to tell us how to do it. However, we need government incentives for as long as needed to propel our country through this development stages. Just think of the role of the government in energy independence as a provider of the materials to build a bridge. We do not expect the government to build the bridge, and we do not ask them to provide more material than what is needed to build that bridge. But we need reliable, stable and high quality material that we can count on to build a solid bridge to energy independence. That means Congress needs to pass an energy bill that extends tax credits for wind and solar as soon as possible. They also need to extend the credits not on an annual basis but provide confidence by extending it for ten years, or more. In addition, I think the Congress can add provisions to the bill to generate an annual analysis to review the bill and readjust the incentives to ensure proficient execution of the plan. So stop stalling, and act as if the future of our country, and possibly the world depends on it.

Resources:

Database of State Incentive for Renewable and Efficiency. Retreived from: http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US43F

Building Britain’s Future. (2009). The UK Low Carbon Transition Plan: National Strategy for Climate and Energy. Retreived from http://www.decc.gov.uk/assets/decc/White%20Papers/UK%20Low%20Carbon%20Transition%20Plan%20WP09/1_20090724153238_e_@@_lowcarbontransitionplan.pdf

Ministry of Economy Trade and Industry, http://www.meti.go.jp/english/press/2011/1122_01.html

Renewable energy in Iceland (2009). Retreived from

http://www.res.is/is/page/energy_in_iceland