Advanced Search
MyIDEAS: Login

Natural Resource use Conflict: Gold Mining in Tropical Rainforest in Ghana

Contents:

Author Info

  • Akpalu, Wisdom

    ()
    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Parks, Peter J.

    ()
    (Department of Agricultural Economics and Marketing, Cook College,)

Abstract

Gold is frequently mined in rainforests that can provide either gold or forest benefits, but not both. This conflict in resource use occurs in Ghana, a developing country in the tropics where the capital needed for mining is obtained from foreign direct investment (FDI). We use a dynamic model to show that an ad valorem severance tax on gross revenue can be used to internalize environmental opportunity costs. The optimal tax must equal the ratio of marginal benefits from forest use to marginal benefits from gold extraction. Over time, this tax must change at a rate equal to the difference between the discount rate and the rate of change in the price of gold. Empirical results suggest that the 3 percent tax rate currently used in Ghana is too low to fully represent the external cost of extraction (i.e., lost forest benefits).

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/2077/2739
Download Restriction: no

Bibliographic Info

Paper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 182.

as in new window
Length: 37 pages
Date of creation: 28 Oct 2005
Date of revision:
Publication status: Published as Akpalu, Wisdom and Peter J. Parks, 'Natural Resource use Conflict: Gold Mining in Tropical Rainforest in Ghana' in Environment and Development Economics, 2007, pages 55-72.
Handle: RePEc:hhs:gunwpe:0182

Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
More information through EDIRC

Related research

Keywords: Optimal taxation; Efficiency; Externality; Dynamic analysis; Firm behaviour;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. James Benhin & Edward Barbier, 2004. "Structural Adjustment Programme, Deforestation and Biodiversity Loss in Ghana," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 27(3), pages 337-366, March.
  2. Simpson, R David & Sedjo, Roger A & Reid, John W, 1996. "Valuing Biodiversity for Use in Pharmaceutical Research," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 163-85, February.
  3. Fraser, Rob W., 1999. "An analysis of the Western Australian gold royalty," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(1), March.
  4. Ehui, Simeon K. & Hertel, Thomas W. & Preckel, Paul V., 1990. "Forest resource depletion, soil dynamics, and agricultural productivity in the tropics," Journal of Environmental Economics and Management, Elsevier, vol. 18(2), pages 136-154, March.
  5. Jeffrey A. Krautkraemer, 1988. "The Cut-Off Grade and the Theory of Extraction," Canadian Journal of Economics, Canadian Economics Association, vol. 21(1), pages 146-60, February.
  6. Tsikata, Fui S., 1997. "The vicissitudes of mineral policy in Ghana," Resources Policy, Elsevier, vol. 23(1-2), pages 9-14, June.
  7. Camille Bann, 1997. "An Economic Analysis of Tropical Forest Land Use Options, Ratanakiri Province, Cambodia," EEPSEA Research Report rr1997112, Economy and Environment Program for Southeast Asia (EEPSEA), revised Nov 1997.
  8. Doherty, Neil A & Posey, Lisa Lipowski, 1997. "Availability Crises in Insurance Markets: Optimal Contracts with Asymmetric Information and Capacity Constraints," Journal of Risk and Uncertainty, Springer, vol. 15(1), pages 55-80, October.
  9. Addy, Samuel N, 1998. "Ghana: revival of the mineral sector," Resources Policy, Elsevier, vol. 24(4), pages 229-239, December.
  10. Löfgren, Åsa, 2003. "Habit Formation in the Environmental Quality: Dynamic Optimal Environmental Taxation," Working Papers in Economics 92, University of Gothenburg, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Ousman Gajigo & Emelly Mutambatsere & Guirane Samba Ndiaye, 2012. "Working Paper 147 - Gold Mining in Africa-Maximizing Economic Returns for Countries," Working Paper Series 378, African Development Bank.
  2. Akpalu, Wisdom & Vondolia, Godwin K., 2011. "Bioeconomic model of spatial fishery management in developing countries," Working Papers in Economics 490, University of Gothenburg, Department of Economics.
  3. Akpalu, Wisdom & Anders, Ekbom, 2010. "Bio-economics of Conservation Agriculture and Soil Carbon Sequestration in Developing Countries," Working Papers in Economics 431, University of Gothenburg, Department of Economics.
  4. Elaine Lawson & Gloria Bentil, 2014. "Shifting sands: changes in community perceptions of mining in Ghana," Environment, Development and Sustainability, Springer, vol. 16(1), pages 217-238, February.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:gunwpe:0182. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie Andersson).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.