Экономические науки
/ 15. Государственное регулирование экономики
Levkovska L., Mandzyk V., Cherednichenko I.
Public institution “Institute of environmental economics and sustainable
development of national academy of sciences of Ukraine”, Ukraine
Economic nature of the water
rent and particularities its evaluation in the market environment
According
to the conventional definition, the resource rent (natural resource rent) is a
share of profit from the use of natural resources in the production process. The
water rent as a variant of natural resource rent originated around the third
millennium BC, when the first civilizations based in the river valleys (Nile,
Tigris and Euphrates; Indus and Ganges; Yangtze and Huang He), made enormous
profits (in kind and in value form) from the use of water resources in
irrigation systems and from the agricultural trade surplus. In the twentieth
century with the rapid development of science and technology the water rent was
supplemented by the water and power potential.
Most
research undertaken by the scientists identify three forms of natural resource
rent: absolute, differential and monopolistic
[1, 2]. The differential natural
resource rent is determined by different quality and productivity of
natural resources used in the production process. This is differential rent I
which is associated with different productivity of agricultural land, various
stock quantity, seam thickness and other mining and geological conditions of
minerals mining, their natural quality, varietal composition of forests,
geographical location of natural resources, their remoteness from markets,
transportation lines availability, etc.
Demand for water is constantly increasing, which requires economic
development of new sources that are distinguished by technical properties
(water quality, distance from the consumer, etc contributes to the differential
rent I). Withdrawal of differential
rent I by the owner of natural resources creates equal competitive conditions
for business entities. Differential rent II expresses surplus profit resulting
from more efficient use of natural resources through the use of modern
technology. Increase in additional
costs for material and labor resources to improve the quality of water
facilities and to reduce water losses, etc contributes to differential rent II. This profit is the entrepreneurs’ reward
for their innovative activity. B.N. Kuzyk and Y.V. Yakovets also distinguish
differential rent III, which they call inter-product or inter-branch rent. It
expresses the surplus profit received by the producers due to more efficient
products in comparison with interchangeable products that satisfy the same
demand. This economic category is the most obvious at the market of energy.
The absolute natural resource rent is received by the owners of all
natural resources, even with worse quality, since it is not worth for an
entrepreneur to start any business activity without this profit.
The monopolistic natural resource rent occurs when the owner of unique
natural resources increases prices to a level that allows to appropriate
monopoly profit beyond differential and absolute rent. In such cases, the state seeks to remove this monopoly price
markup.
There
are several peculiarities to determine the water rent that cause problems in
its calculation. Therefore, the sections of one rive located from each other at
a distance of five percent of its total length (and sometimes even less) should
be treated as different water bodies in terms of rent formation. One can only
imagine a set of such water bodies of the Dnieper River (length 2201 km)
or
the Dniester River (1362 km).
The
attention should also be paid to the fundamental complication in calculating
the water rent, compared to mineral deposits:
water bodies are inseparably connected with actively functioning
ecological systems. This circumstance is very difficult to be economically
accounted for (or even to understand) and is one of the reasons why the rent
for the use of water resources is relatively rare discussed. It should be noted
that the problem of identification and evaluation of adverse effects upon water
bodies is so complex that out of all these impacts for analysis only the
simplest ones in this respect – wastewater
discharge – is selected.
Among
other impacts are for example the erosion of the coast line by ship waves,
worsening of the conditions for spawning during the construction and operation
of hydraulic facilities, movement of vessels etc. that result in the reduction
if not the death of fish or cause it to migrate, flooding of populated areas in
the event of rise in the level in the water reservoir or its dehydrogenation in
case of significant water intake. Thus, the problem of
regulation of other impacts of this kind is shifted, at least partially, on the
rental payment system (of course, if the are in place) [3]. Water resources and
water sources are not sold in the market, and if sometimes they become an
object of sale they cannot be recognized as mass phenomena (as opposed to trade
in land). However, the price assumes the properties that correspond to the
theoretical postulates, but in mass transactions. In individual agreements the
price is subject to strong and almost invisible influence of random and unique
events and circumstances and does do not have the averaged values, stability
and thus representativity. According V. Danylov-Danylyzn, market is a weak aide
in determining the rent, which is conditional to the operation of wells or
water body, although the issue of its calculation that refers to certain economic
conditions should be treated just as market conditions. Therefore, the right to
determine, identify and remove the water rent shall belong exclusively to the
state.
The
economic science dealt much and successfully with the rent (first with the land
rent, then in a more general setting with the natural resource rent), namely
the issues related to its creation, distribution and redistribution. Much more
modest results feature the methods of calculation of the value of rent, and no
wonder: it is not a consequence of any defects but it determined by the essence
of the phenomenon. It is hard to
calculate the value of the natural resource rent with any reasonable accuracy,
but in fact it is not necessary because an intent to withdraw it from the
producers of raw products that are sold will lead to stagnation (at least - a
significant deterioration in the economic condition) of industries that depend
on raw materials. One can only imagine the consequences caused by overstatement
and understatement of payments for natural resources, if you try to
"consolidate the natural resource rent within budget" in this way.
The
natural resource rent has always been unevenly distributed between the
companies in the course of which activities it is formed: some had more of it,
others - less (not only in absolute but also in relative terms). Subject to
equal terms the first will have bigger profit (at least, specific) that
others. Therefore, the main function of
charges for the use of natural resources, and thus water resources shall be the
encouragement of their efficient use and resource saving.
References:
1. Кузык Б. Россия —
2050: стратегия инновационного прорыва / Б. Кузык, Ю. Яковец – М.: ЗАО «Издательство «Экономика», 2005. — 624 с.
2. Природно-ресурсна сфера України: проблеми сталого розвитку та трансформацій / Під загальною редакцією чл.-кор. НАН України Б. Данилишина. – К.: ЗАТ Нічлава, 2006. – 704 с.
3. Данилов-Данильян В. Природная рента и управление использованием природных ресурсов [Электронный ресурс] / В. Данилов-Данильян // Экономика и математические методы – 2004. – Т.40. – № 3 – Режим доступу – http://www.iwp.ru/monograf/renta/renta1.shtml