An introduction to natural resources

Introduction
Types of natural resources
Distribution of natural resources
Natural resources in India
The Value of nature
Valuation of nature
Categories of uses
Environmental economics
Conclusion

Introduction

The ecosystems where people live affect every part of their lives. The goods and services that can be gotten from them, like drinking water, food, fish, wood and non-wood products, etc., are important parts of both local and national economies. They make a living for millions of people who live in or near ecosystems. Natural resources are things that come from nature and can be used by people to meet their needs. They include water, land, plants and animals, minerals and fossil fuels, wind and sunlight. People have used these in many ways to feed themselves and make a living. The characteristics of natural resources, the technology available to use them, and the social and political factors that affect access to the resources are all very important to humans. In recent years, the lifestyles of at least some people are causing natural resources to run out because they are used too much. For human development, it is important to make sure that natural resources are used in a way that is fair and sustainable.

Types of natural resources

In economic terms, natural resources are "stocks of materials that exist in the natural environment and can be used for production or consumption, either in their raw state or after a small amount of processing" (World Trade Report 2010). Most of the time, air and seawater are not counted as natural resources because they are not directly used to make things or to eat. But technology makes it possible to turn them into natural resources. For example, seawater can be turned into freshwater with the right technology. Because of this, we also think of seawater as a natural resource. You can also think of natural resources as natural capital, which is different from physical and human capital because it is not made by people.

Natural resources can be classified on the basis of their origin as biotic or non-biotic.

Biotic resources come from living and organic things that come from biology, like fish, food for animals, etc. Fossil fuels like coal and oil are also in this group because they are made from decaying organic matter.
Abiotic resources come from things that are not living and are not made of organic matter. Abiotic resources are things like water, metals and their ores, and so on.

Another useful way of classifying natural resources is renewable and non-renewable resources.

Renewable resource

A renewable resource is one that either gets more of itself or gets more of itself in a short amount of time. So, if the rate of resource extraction takes into account the resource's limited ability to reproduce, renewable resources can provide yields for an infinite amount of time. Water, sunlight, and grass are all examples of resources that can be used over and over again. The time frame for renewal must, of course, be relevant from an economic point of view, since some resources may be renewable in theory but not in practise. One example of a renewable resource is a forest. But it takes a long time for a forest to grow and mature, so in reality, it is not a renewable resource. A renewable resource can be one that can be used up or one that can't be used up (cannot be exhausted by excessive use). Sunlight is a renewable resource that can never run out. But too much fishing can kill all the fish in a wetland, so they need to be used in a certain way so they can grow back on their own.

Non-renewable resources

All resources that don't grow or change in some other way over time are called non-renewable resources. They only come in a limited amount, so every unit used today cuts down on the amount that can be used in the future. Fossil fuels and mineral deposits are two of the most common types of nonrenewable resources. All of these are resources that can run out, so they must be used wisely.

Depending on how far along they are in their development, natural resources can be:

Actual resources: Actual resources are those that have been investigated, had their amounts and qualities established, and are currently being utilised. For instance, surface water is an actual resource whose use is influenced by the available technology and the associated costs.
Potential resources: Resources that could be utilised in the future are those that already exist in a given area. For instance, although oil and natural gas are found in many places, they are still considered potential resources until they are actually extracted and used.
Reserve resources: Reserve resources are that portion of actual resources that can be profitably developed (or exploited) in the future.
Stock resources: Stock resources are those that have been examined but cannot currently be utilised owing to a lack of the necessary technologies. An example of a stock reserve is hydrogen. Since there was no technology to extract and use shale gas effectively, it was a stock resource for a long time.

Distribution of natural resources

Many of the world's natural resources are concentrated in a small number of nations, while supplies in other nations are scarce. Only 15 countries contain about 90% of the world's confirmed oil reserves (out of slightly more than 200 in the world today). The movement of these resources through international trade from areas of excess supply to areas of excess demand may also encourage the most effective use of these goods. Resource inequality can lead to conflict between resources of people and between countries, and it frequently does. Conflicts, especially small-scale ones, frequently arise from disagreements over natural resources. Neighbors frequently argue over who gets to utilise a water supply or who gets to draw the lines between their properties. Many conflicts start over natural resources and can turn into riots, widespread violence, or even war.

India is a prime example of how access to and distribution of natural resources have social as well as political implications. When compared to marginal groups, dominant groups in the social hierarchy possess and have access to a greater variety of resources. Urban areas nowadays are claiming an increasing amount of land, water, and other resources through their political and economic supremacy, while rural areas have taken on a more submissive attitude.

Natural resources in India

Natural resources are abundant in India, however they are not dispersed equally. Certain resources are concentrated in some regions and are scarce in others as a result of the geology, geography, and environmental trends. For instance, places with low rainfall, like Rajasthan, have limited water sources, compared to those with high rainfall, like Kerala and Assam. Only a few places contain minerals, oil, and natural gas. Resources for plants and animals vary depending on the region's soil, forest kinds, and climate. India's nonrenewable resources are mapped out and evaluated for their economic value. The renewable resources are still being evaluated, though. Although millions of people depend on them for their lives, their immense economic value has long been ignored.

Only when resources become scarce and disputes over access and ownership of the resources start to occur do they become valuable. Rivers that cross both Tamil Nadu and Karnataka have caused disputes between the two states. Rural communities frequently see disputes over ownership of land, trees, pond fish, and other resources. Millions of people's livelihoods are under danger due to the scarcity of water brought on by overexploitation and indiscriminate consumption by a select few. Even the seas, which in theory had an abundance of fish that were renewable resources, are overfished, causing a "fish drought" in some areas of India. Understanding the true worth of India's natural resources and how crucial they are to the livelihoods of millions of its citizens is necessary for its growth.

The Value of nature

Everyone depends on nature, either directly or indirectly, for the things they need to do to stay alive. This dependence goes beyond just seeing nature as a source of goods and services in the form of natural resources and putting a price on it. The quality of the water we drink and use for different things, the air we breathe, and the soil in which our food grows are all affected by a wide range of plant and animal life, as well as the ecosystem to which each species is connected. People know that plants take in carbon dioxide and give off oxygen, but it's not as clear that fungi, small soil creatures, and even microbes are needed for plants to grow. After the monsoons, rivers in a natural forest still have water in them, and ants are important to life on earth. Before we start figuring out the value of forests based on how much timber, wood, and other resources we think are useful for human activities, we need to understand and appreciate these connections. Ecosystems and biodiversity are the results of a long process of evolution that led to an unimaginably large number of species with different genes and many different ecosystems where all living things, including humans, live. Understanding how important nature and its parts are helps us figure out how much we depend on them.

Valuation of nature

In recent years, people have tried to come up with ways to figure out how much nature is worth. More attention is paid to how much money it is worth. But people are also becoming more aware of the value of nature in other ways.

The worth of nature can be broken down into

Direct value, which is when people use materials from nature in a direct way (for example consuming fruits of a plant)
Indirect values that have nothing to do with direct use or even the possibility of using things from nature (protecting or saving a species)

Most often, people talk about use value and non-use value.

Use value is the value of a good or service that comes from how it is used.
A resource's non-use value is its value even if it hasn't been used and isn't likely to be used in the future.

Categories of uses

Consumptive use value

This is the non-market value of things like fruits, grasses, and other resources. These resources are used right away, without going through a market. Most of the time, their worth is not calculated (but is often approximated when required). People eat many different kinds of plants and animals. Grass is used to feed animals and to cover roofs. People gather wood to use as fuel. Plants have fibres that can be used to make clothes and ropes for personal use. In traditional ways of healing, many plants are used. People can use natural resources for free because they have access to them. So, people can get fuel wood, herbs, and fish right from their natural surroundings. But people who don't have access to these things have to find other ways to get them. For example, people who live in cities have to buy fruits, vegetables, and other food to meet their needs.

Productive use value

This is the value that can be put on resources that can be sold or traded on the market. Fruits and fish are often brought to local markets to be sold. Adding value is often done on a small or large scale to make something more valuable or sellable. Raw fish is worth less than smoked or dried fish. Fruits can be turned into jams or pickles, which can then be sold. Plates made of Sal or Palash leaves are for sale. People gather tendu leaves to make bidis, which are local cigarettes. Plants and animals can be used to make things like paper from bamboo, leather from animal skins, and silk from silk worms. Non-Timber Forest Products (NTFP) like Mahua, honey, amla, hirda, behda, etc. that are traded fall into this group.

Social and Cultural Value

This is an indirect use value ascribed by the community as part of social or cultural beliefs. Plants such as Tulsi and Peepal are considered sacred and are associated with many myths and stories. Snake are a symbol of good in some cultures and evil in others. The Tiger is India’s national animal and lotus, the national flower. Springs, streams and rivers are considered as homes of deities and many rituals are performed by flowing water.

Ethical Values

These are indirect values that can't be used. Some cultures think that all forms of life deserve to be here. They give natural values to things in nature. People who hunt often think it is wrong to kill an animal that is pregnant or an animal that is nursing its young. Children learn not to hurt animals and to treat water sources with care. People think it's a great service to life to feed birds and give them water in the summer. These don't always have to do with a person's religious beliefs.

Aesthetic Values.

These are direct non-use values. A species, landscape, or ecosystem is said to have aesthetic value if it looks nice or gives non-consumptive pleasure. Most people like to look at nature to appreciate its beauty or calm their minds. It also gives people a chance to do fun things like watch birds, take pictures, etc. Tourism to beautiful natural places is growing all over the world. This shows that more and more people want to see and appreciate the beauty of nature in all its forms.

Ecological/Environmental Service Values.

These are the values that are attached to the environmental or ecological processes that are needed to keep people alive. Forests keep the air and water clean and cut down on carbon dioxide, which helps protect against global warming. Microbes in the soil help waste break down and keep nutrients cycling. Pollination is important for cultivation because it leads to fertilisation and seed production.

Option values.

This value doesn't do anything. It is the value of a resource that is not being used right now but might be useful in the future. There are a lot of plants and animals whose value isn't known yet, but they may have some value that hasn't been found yet. Even if wild plants aren't useful right now, they may have important genes for disease resistance that could be useful in the future. UNEP (1995) said that the value of an option is the resource's potential value for future (direct and indirect) use. Option value is sometimes based on how much someone is willing to pay to keep the right to use a service in the future. There are also other kinds of non-use values that have been written about. The bequest value is how much someone values knowing that others may benefit from a resource or service in the future. The existence value is how much someone values knowing that a resource or service exists.

Environmental economics

Environmental economists often make a difference between what ecosystems provide in terms of goods and services. Use value and non-use value are used to make this difference. So, goods that are good for the environment have use values, and services have non-use values. But most of the time, the things that people take from an ecosystem, like fruit or fish, are the result of services like biotic interactions, energy flow, and nutrient cycling. So, goods and services in an ecosystem are linked.

Problems of Economic valuation

It is very hard to figure out how much goods or services in an ecosystem are worth in terms of money. This is called economic valuation. But it has been tried many times to help with research and making decisions. For example, the value of a forest can be measured by the market value of the wood that can be cut from it, the market value of the minerals that can be mined from the area, or the value of the local economies that depend on the forest for their survival. This helps make a cost-benefit analysis, which can be used to figure out which options are best. This causes a lot of problems in the real world. Valuation techniques, especially when it comes to indirect use value and non-use value, involve the subjective value judgments of people living in modern urbanised societies. Trying to apply these kinds of value judgments to societies with very different social and economic structures is hard from a methodological and moral point of view. If it's true that many societies that depend on ecosystems for their subsistence are an important part of the ecosystem they live in, then people who don't share that culture and way of life tend to put a monetary value on a lifestyle and culture (Bawa and Gadgil, 1997)

The valuation methods work well in economies where everyone has money and is well-informed about their choices. But the same can't be said about economies based on subsistence, multiple cultures, and different sets of values. This point is made clear by the example of rivers. Farmers want a river to be dammed because they are a valuable source of water for irrigation. On the other hand, fishermen may depend on the same river for their catch, so they would prefer a fast-moving body of water that supports a variety of fish. So, the actual and perceived costs and benefits of a resource will be different for different parts of society, and a simple valuation may not take into account these differences when putting a value on something.

There are still many benefits that are hard to put a price on. For example, people who live in the forest may use a variety of medicinal plants, but it's hard to figure out how effective they are as a health practise. The productivity of ecosystem goods, which are the foundation of economies based on subsistence, depends on how well ecosystems work. You can't really figure out how much fruit is worth if you don't also take into account how it is pollinated and spreads. There is no way to calculate the cultural, religious, and spiritual value of nature. The contribution of ecosystems to human knowledge is another hard thing to value. People's close experiences with nature are well known to have given them a lot of practical knowledge about it. Only by closely watching natural processes like pollination, selection, etc., could plant breeding techniques develop. Architects and artists have learned a lot from the way nature builds. This value can't be measured in terms of money.

Even so, environmental economists have tried to figure out the value of things in many different ways.

Trying to figure out how many people make a living from nature. Only in India, about 50 million people, or 5% of the total population, are thought to live in or near forests and get at least some of their income from forest products (NCHSE, 1987) In the Amazon region of Brazil, 15 million people, or 20% of the economically active population, get a large part of their income from extracting natural products (Browder, 1992) These numbers don't include the people who work to protect and sell forest-based products, or the people who work in industries that depend on forests. When both freshwater and marine ecosystems are taken into account, the number of people who live off of harvesting products from ecosystems could easily double in India and Brazil.
Prices on the market for crops, fish, etc. In the 1980s, the domestic and international rattan (cane) markets were worth $40 billion and $2.5 billion, respectively (Manokaran 1990). The tendu leaves bring in about US$160 million per year for the Indian state of Madhva Pradesh. The leaves are just one of hundreds of different kinds of non-wood forest products that are taken from India's forests.
Contribution of natural resources to cash income of households and the number of households that depend on them Indigenous people who live in and around the Biligiri Rangan Hills, a protected area in south India, get between 48 and 60% of their cash income from products from the environment (Hegde et al., 1996). In West Bengal, India, fuel wood and fodder, which come from young forests that are growing back, make up 22% of the cash income of village households in and around forests (Malhotra et al, 1991)
The total GDP comes from ecosystem goods. However, the GDP often doesn't take into account ecosystem services, so the numbers for ecosystem goods are also low. In India, Lai (1992) did a preliminary analysis of the annual rent from forests for both goods and services and found that it was more than 25% of the GDP. The official number for how much forestry adds to GDP is 12 percent. Lai's analysis shows that ecosystem products like fuel wood and fodder, which are the basis of subsistence economies, make up about 13% of the total value of forest goods and services.
In the case of ecosystems, this is the value of services per hectare. Chopra (1993) says that the value of non-timber forest products and services in India's dry deciduous forests is between US$ 5220 and US$ 8335 per hectare per year. This includes things like soil conservation, nutrient cycling, and tourism and recreation. Such numbers are often used by the government to get money from mining companies that cut down forests to make room for mines.

Conclusion

The above discussion shows how important natural resources are by looking at the different values people have given them and the recent attempts to calculate those values in economic terms. Valuing natural resources is a field of study and practise that is still changing, but it has been used in many ways to make decisions about how to protect and use natural resources. Still, it's important to remember that you can't measure all values in terms of money. For example, the cultural value of some places or species is based on feelings like love, respect, and pride, which can't be measured by money. To understand the economics of the environment, you need to know all the related values and how to measure things the right way.