Humboldt-Universität zu Berlin - Resource Economics

The question of which system of rules – together with the appropriate organisational forms for their practical implementation – should underlie the use, management and conservation of natural resources leads to a series of existential research questions. It is often the consequences of institutional failures which threaten people and their natural livelihoods: resource degradation such as soil erosion and desertification, pollution and loss of freshwater resources, loss of biodiversity and genetic resources, clearing of forests and fish population decline, climate change, exhaustion of fossil fuels and the related bioenergy problematic, in addition to poverty, hunger and under-development, as well as institutional upheaval in many, and not only post-socialist, countries. All of these are challenges which motivate a better understanding and better formation of an institutional resource economics and the institutions of sustainability. You can read more about the Problem Dimensions and the related research projects here

• Overview of the Problem Dimensions

You can read more about selected questions in institutional resource economics here: 

• Agriculture and environment 
• Resources and poverty
• Transition countries

Resource-overarching Dimensions:

Problems Caused by lacking of Institutions of Sustainability in a Broader Context

1.   Institutional Change and Governance Reform in Social-ecological Systems
2.   World Nutrition, Poverty, Social Exclusion, and Political Conflicts
3.   Issues of Economic Development and Developmental Cooperation
4.   Transformation Processes of Autocratic and Socialist Systems
5.   Adatpion Pressures from Globalization, Structural Change, Agricultural and Environmental Policy
6.   Environmental Impact of Agricultural Production and Different Cultivation Systems

Resource-specific Dimensions:

Problems Caused by lacking of Institutions of Sustainability in Single Problem Areas

7.   Soil Degradation und Desertification including Land Conversion
8.   Water Shortage and Contamination, Waste Water, and Sanitation
9.   Climate Change, Requirements for Mitigation and Adaptation
10.  Loss of Nature, Biodiversity, and Genetic Resources
11.  Interference with Fish Stocks, Wildlife, and Forests
12.  Depletion of Fossil Energy Stocks, and Provision of Renewable Energy

According to data provided by the „Intergovernmental Panel on Climate Change“, the global mean temperature has increased by 0.74 °C (± 0.18 °C) during the last century. The trend is increasing: the first decade of the third millennium has been warmer than the 1990s, which have been warmer than the 1980s (IPCC).

Most probably, the reason for this recent climate change can be found in an increase of the natural greenhouse effect due to human activities. The main causes are the combus-tion of fossil fuels, deforestation, intensive agriculture, and livestock production. Through these activities greenhouse gases – especially carbon dioxide, methane, and nitrous oxide – accumulate in the atmosphere. These gases reduce the heat radiation emissions into space and lead to a rise in temperature on earth. This increase in temperature causes a deglaciation of glaciers and the poles, resulting in rising sea levels. The temperature increase notably disturbs global water cycles and has a strong impact on climate.

Climate change poses several new challenges to humanity. A recent paper estimates that only in Germany climate change will cost about 800 billion Euros until the year 2050 (Kemfert). Countries in the tropics are even more severely affected. Agriculture in these countries will face tremendous drops in production. Adverse effects on health add to these problems, e.g. through heat waves or the accelerated spread of infectious diseases – especially in countries with a poor public health system (WHO).

Multiple adaptation and mitigation requirements arise from the negative consequences of climate change. In the next years, it will be crucial to develop appropriate strategies to cope, for instance, with floodings and droughts. At the same time, to combat further climate change, global greenhouse gas emissions will have to be reduced – e.g. by the ex-tensification of agriculture or the development of renewable energies.

The question as to who has to carry the burden of adaption to and mitigation of climate change will increasingly lead to conflicts between regions, countries, economic sectors, social strata, and generations. To develop adequate institutions and organizations will be crucial to resolve these conflicts. The Division of Resource Economics is actively engaged in international research projects in this field.

Agriculture has historically been the single largest user of fresh water resources. If limited in its temporal and spatial availability, water has at the same time been the most important obstacle to agricultural development. Water is a pivotal input to plant production and animal husbandry. Surface and subsurface water bodies are also important sinks for a number of agricultural wastes including organic manure, mineral fertilizers and pesticides. The local manifestations of the water cycle are a key determinant for a complex system of micro-climatic conditions faced by agricultural production.

Today a multitude of additional social and economic activities depend directly or indirectly on the reliable availability of water. Accordingly, water resources are used for numerous industrial purposes, such as in the cooling of combustion engines or as a solvent in chemical processes. Water further serves as a source for drinking, cooking, recreation and the removal and treatment of human wastes. This overall trend is catalyzed by global population growth and the rapid economic development of major transition countries such as China, India and Brazil.

As in agriculture also most other types of water use tend to rely on the resource’s capacity to simultaneously serve as a source and a sink. Differences, however, exist in terms of the qualities and quantities they require. Furthermore, water is frequently demanded at very different times and locations. The finiteness and the physical mobility of water add up to the problem by resulting in numerous complex interactions between water users across space and time. Water has consequentially become the object of increasing coordination problems and competition.

The theoretical concepts developed by the Division of Resource Economics serve to further extend our analytic capacities for examining existing systems of rules and actors that take part in today’s struggle over water. The quest to analyze how nature-related institutions evolve, how they interact with other sets of social rules and how those institutions determine the allocation of costs and benefits from water use, represents a pivotal step towards facilitating the increasingly important need for coordination of water related conflicts.

This problem dimension has been addressed in the following research projects:

• INTRO-Organic Farming
  Institutions and Transaction Costs in Organic Farming
  • INTRO - Institutional Success Factors
  • INTRO - Costs of Acieving Environmental Quality Objectives

• LABOR
  Labour Organization and the Adoption of Integrated Pest Management

• SIAG
  FG 986: Structural Change in Agriculture - Sub-project 11: Cooperative and Hierarchical Forms of Institutional Change (SIAG)

Fish, forest and wildlife resources and their habitats play a major role in global carbon cycle and preservation of biodiversity. These resources are under massive exploitation pressure because of their extractive characteristics constituting common pool goods. Research in the field of institutional economics indicates sustainable appropriation, use and conservation not only by central government control but also by variety and complexity of multilevel formal and informal institutions of manifold governance structures (Gibson et al. 2000; Ostrom 1999, 2005; Hagedorn 2002, 2008; Bromley 2009).

Nevertheless, world´s fish, forest and wildlife resources are currently experiencing deep degradation. Up to 25% of deep sea fish species suffer from a high level of depletion and 52% are almost below an acceptable level (FAO 2007). Furthermore, up to 80% of fish species of economic interest are overfished (FAO 2007). In inland waters, one of the most serious threats for wild freshwater species are user demand driven stocking measures with hatchery-bred fish potentially resulting in irreversible repercussions for aquatic biodiversity (Eby 2006).

Forest resources are experiencing great challenges due to deforestation and forest degradation. The conversion of tropical forest into agricultural land is a major driver of forest loss (FAO 2010). National and international efforts within the last few decades to reduce forest loss –while having some impact – have however failed to substantially slow down the loss of the world´s forests (Pfaff et al. 2010). Around 13 million hectares of forest were converted to other uses or disappeared through natural causes each year in the last decade (FAO 2010).

In the European area, game is strongly influenced by habitat conditions shaped through heterogeneous user demands and preferences, causing simultaneously wildlife damage. In Germany, the so-called hunting associations manage the problem of this negative external effect (Rauchenecker 2010). In many parts of Africa and Asia, the most immediate threat to wildlife are unsustainable hunting and trading in wildlife and wildlife products, and human-wildlife conflict (FAO 2007). A challenge for policy-makers is to balance conservation of wildlife resources with the livelihood requirements of local populations (FAO 2007). Because of growing human access to wildlife habitat, game changes social and reproduction behaviour. These factors influence degree and level of wildlife damage.
 

This problem dimension has been addressed in the following research projects:

• VIETNAM
  Devolution of Forest Management in Vietnam
• ADAPTFISH-2
  Adaptive Dynamics and Management of Coupled Social-Ecological Systems Exemplified by Recreational Fisheries

Literature:

Bromley, Daniel W. (2009). Abdicating Responsibility: the Deceits of Fisheries Policy. Fisheries 34 (6):280-290.

Eby, L. A.; Roach W. J.; Crowder, L. B.; Stanford, J. A. (2006) Effects of Stocking-Up Freshwater Food Webs. Trends in Ecology and Evolution 21(10):576-584.

FAO (2007). The State of World Fisheries and Aquaculture 2006. Food and Agricultural Organization of the United Nations, Rome.

FAO (2007). State of the World`s Forests. Food and Agricultural Organization of the United Nations, Rome.

FAO (2010). Global Forest Resources Assessment 2010, Main Report. FAO Forestry Paper 163. Rome.

Gibson, C., McKean, M., Ostrom, E. (2000). People and Forest: Communities, Institutions and Forest. Massachusetts, USA. Massachusetts Institute of Technology.

Global Witness (2007). Independent Forest Monitoring in Nicaragua: Second Summary Report of Activities. Washington DC, USA. Global Witness Publishing Inc.

Hagedorn, Konrad (2008). Particular Requirements for Institutional Analysis in Nature-Related Sectors. European Review of Agricultural Economics 35 (3), 357-384.

Hagedorn, Konrad; Arzt, Katja and Peters, Ursula (2002). Institutional Arrangements for En¬vironmental Co-operatives: A conceptual Framework. Environmental and Institutional Change. In: Hagedorn, Konrad (ed.). Environmental Cooperation and Institutional Change. Theories and Policies for European Agriculture. Cheltenham: Edward Elgar, 3 25.

Ostrom, Elinor. (2000). Reformulating the Commons. Swiss Political Science Review 6(1), 29-52.

Ostrom, Elinor (2005). Understanding Institutional Diversity. Princeton, NJ: Princeton University Press.

Pfaff, A.; Sills, E.; Amacher, G.; Coren, M.; Lawlor, K.; Streck., C. (2010). Policy Impacts on Deforestation. Lessons Learned from Past Experiences to Inform New Initiatives. Nicholas Institute Report, Duke University. NI R 10-02

Katharina Rauchenecker (2010). Institutioneller Wandel im Bereich Jagd und Wildtiermanagement – Das Beispiel der Jagdgenossenschaften. Institutional Change in Agricultural and Natural Resources, Vol. 42. Aachen: Shaker.

The question of which system of rules – together with the appropriate organisational forms for their practical implementation – should underlie the use, management and conservation of natural resources leads to a series of existential research questions. It is often the consequences of institutional failures which threaten people and their natural livelihoods: resource degradation such as soil erosion and desertification, pollution and loss of freshwater resources, loss of biodiversity and genetic resources, clearing of forests and fish population decline, climate change, exhaustion of fossil fuels and the related bioenergy problematic, in addition to poverty, hunger and under-development, as well as institutional upheaval in many, and not only post-socialist, countries. All of these are challenges which motivate a better understanding and better formation of an institutional resource economics and the institutions of sustainability. You can read more about the Problem Dimensions and the related research projects here

• Overview of the Problem Dimensions 

You can read more about selected questions in institutional resource economics here: 

• Agriculture and environment 
• Resources and poverty
• Transition countries

Resource-overarching Dimensions:

Problems Caused by lacking of Institutions of Sustainability in a Broader Context

1.                World Nutrition, Poverty, Social Exclusion, and Political Conflicts
2.                Issues of Economic Development and Developmental Cooperation
3.                Transformation Processes of Autocratic and Socialist Systems
4.                Adatpion Pressures from Globalization, Structural Change, Agricultural and Environmental Policy
5.                Rivalry and Coexistence of Different Cultivation Systems
6.                Environmental Consequences of Intensive Agricultural Production Practices

Resource-specific Dimensions:

Problems Caused by lacking of Institutions of Sustainability in Single Problem Areas

7.                Soil Degradation und Desertification including Land Conversion
8.                Water Shortage and Contamination, Waste Water, and Sanitation
9.                Climate Change, Requirements for Mitigation and Adaptation
10.              Loss of Nature, Biodiversity, and Genetic Resources
11.              Interference with Fish Stocks, Wildlife, and Forests
12.              Depletion of Fossil Energy Stocks, and Provision of Renewable Energy

The exploitation of the stocks of fossil based resources is at dangerously high levels now. As far as crude oil is concerned, the maximum point of extraction i.e. the so-called peak oil has already been exceeded (Energie Watch Group 2008) and the security of supply appears to be a serious worry (IEA 2009). At the same time the capacity of the earth’s atmosphere to absorb greenhouse gases is limited, and any excess will stretch the impacts of climate change beyond manageable limits (IPCC 2007). In the recent past, renewable energy has emerged as an important option to mitigate supply problems and also simultaneously aid economic development.

In the academic and policy debates, issues related to the demand for energy, renewable re-sources, changing lifestyles, consumption patterns and the interactions among these, have only now gained popularity, thereby also bringing to light the conflicting dimensions contained within these. Such complex issues range from the conflicting patterns of competitiveness between the factors of production for solar, wind, earth, geothermal and bio-energy use up to their displacement and risk effects. For example, biomass cultivation für energy production shares the same production factors as agricultural food production (e.g. land and water) leading to land use tradeoffs. Biomass production also requires intensive agricultural practic-es, thus increasing the use of pesticides and fertilizers. Moreover, by distorting agricultural price incentives, they can potentially lead to income inequalities. These interdependencies arise due to the particular nature of transactions and need to be regularized through appro-priate sets of rules, i.e. institutions.

Although energy efficiency and increased share of renewable energy are considered im-portant so as to restrict climate change, there is still no concrete evidence that a shift to bio-mass production indeed has a positive mitigating impact. There are opportunity costs in terms of reduced food supply due to the diversion of common factors of production. On the contrary, the demand gap due to reduced food production may lead to further aggressive use of other greenhouse gas intensive production techniques, leading to a net increase in the quantum of such gases. Therefore, considering the current world food situation, a further question arises whether the production of bio-energy needs to be subjected to certain norms so that it not only serves the purpose of checking climate change but also does not prove detrimental to global food supply?

The work of the Department of Resource Economics focuses its research on such dilemmas as well the subsequent development of formal and informal rules needed to resolve or govern them on a sustained basis.

This problem dimension has been addressed in the following research projects:

• MEGACITY 2
  Climate and Energy in a Complex Transition Process Towards Sustainable Hyderabad. Mitigation and adaptation strategies by changing institutions, governance structures, life styles and consumption patterns

Human behavior and in particular economic choices depend crucially on what social constructions actors and societies have developed over time and how these in turn have shaped their reasoning and visioning. This ubiquitous interdependence between structure and agency has found its expression in how traditions and religions, norms and rules, languages and discourses, trust and commitment, mental models and believes emerge, are practiced and change.

This problem dimension has been addressed in the following research projects:

• PINE (Transcoop)
  Promotion of Institutions for Natural Resource and Environmental Management in Central and Eastern Europe

• Bahro-Archive
  Reworking the Scientific Bequest of Rudolf Bahro