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The International Politics of Energy And Resource Extraction

  • KIPS CSS Admin
  • July, 2019
  • 208
  • Global Energy Politics

DESPITE CONCERNS OVER THE ENVIRONMENTAL IMPACT OF INDUSTRIAL MINING AND THE CONTRIBUTION THAT FOSSIL FUELS MAKE TO GLOBAL WARMING, RESOURCE EXTRACTION CONTINUES TO BE A MAJOR SOURCE OF REVENUE FOR BOTH DEVELOPING COUNTRIES AND WEALTHIER NATIONS ALIKE.

In fact, new data show that the amount of resources being pulled from the earth has tripled since 1970, though the global population has only doubled in that time.

Despite global efforts to reduce carbon emissions as part of climate change diplomacy, fossil fuels remain among the most prized extractives, for a simple reason: Global demand combined with the wealth they generate continues to give some countries, including members of the Organization of the Petroleum Exporting Countries, outsized global influence.

The lucrative contracts associated with the extractive sector help to explain why resource extraction remains central to many developing countries’ strategy to grow their economies. But the windfalls don’t come without risks, most prominent among them being the “resource curse” that can plague countries that fail to diversify their economies to generate alternate sources of revenue. Corruption can also thrive, especially when government institutions are weak. And when the wealth generated from resource extraction isn’t fairly distributed, it can entrench a permanent elite, as in Saudi Arabia, or fuel persistent conflicts, as in the Democratic Republic of Congo.

The environmental impact of fossil fuels is driving some changes, in particular a push to develop renewable energy sources, such as wind and solar. But the transition to renewable energy sources is slow to develop, even as its long-term financial viability remains uncertain. A broad range of issues regarding energy and resource extraction, and key questions about future developments lie at the heart of this debate. Will renewable energy sources eventually overtake fossil fuels? Or, as countries begin to transition away from more heavily criticized energy sources, like coal, will they replace them with other fossil fuels, like natural gas? What can countries do to avoid the resource curse? Following considerations play a key role in the ongoing struggle for international energy flows:

1. RESOURCE-BASED DEVELOPMENT

Many developing countries see resource extraction as a path to growing the economy and improving livelihoods. But experts argue that extraction must be part of a broader plan for how and where to invest resources, bolstered by transparent reporting and governance systems, if it is to be an effective development strategy. Redistribution of profits from natural resource extraction could be key to solidifying peace in the Central African Republic. In that regard The Central African Republic’s new peace deal is a small step in the right direction.

2. THE RESOURCE CURSE

Resource extraction can go from a blessing to a curse when it fuels corruption or entrenches an elite, robbing citizens of the financial benefits while causing environmental damage. Countries that fail to diversify their revenue sources also risk an economic collapse and social unrest when the resource becomes scarce or global prices drop. Guyana’s pending oil revenues might end up in the hands of a patronage network, in Guyana’s Pending Oil Boom-Or Bust

3. ILLEGAL MINING

Globally, illegal mining has become a major social and environmental concern. In the Amazon, researchers describe illegal mining for gold as an “epidemic,” encroaching on indigenous communities and destroying vast swathes of the rainforest. The efforts are often funded by organized crime or major industries, who recruit local workers but do not offer them the training or protection formal mining industries do.

4. THE HUMAN AND ENVIRONMENTAL COSTS

The wealth produced by the extractive industries comes at great cost, both to local communities and the environment. Despite initiatives to boost transparency, involve affected communities in planning and minimize environmental impact, mining projects continue to drive social conflict and cause serious injustices. Illustrating that is the lack of oversight that led to a fatal mining dam collapse in Brazil, that claimed scores of lives and wreaked havoc on nearby infrastructure.

Moreover, the environmental impact of China’s pursuit of West Africa’s resource wealth, and mineral rush is great cause for concern for environmentalists. They fear that due to alack of rule of law in most African nations and lucrative infrastructural investments that China offers to these nations, Chinese hunger for African resources will leave a trail of environmental catastrophe behind.

5. INFRASTRUCTURE AND THE GLOBAL ENERGY MARKET

In addition to ge...

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