Three Essays on Economic Development in the Natural Resources Sector

This thesis examines two ongoing development projects that received financial support from international development organizations, and an alternative mining tax proposed by the academia. Chapter 2 explores the impact of commoditization of coffee on its export price in Ethiopia. The first part of the chapter traces how the Ethiopian’s current coffee trade system and commoditization come to be. Using regression analysis, the second part tests and confirms the hypothesis that commoditization has led to a reduction in coffee export price. Chapter 3 conducts a cost-benefit analysis on a controversial, liquefied natural gas export project in Peru that sought to export one-third of the country’s proven natural gas reserves. While the country can receive royalty and corporate income tax in the short and medium term, these benefits are dwarfed by the future costs of paying for alternative energy after gas depletion. The conclusion is robust for a variety of future energy-price and energy-demand scenarios. Chapter 4 quantifies through simulation the economic distortions of two common mining taxes, the royalty and ad-valorem tax, vis-à-vis the resource rent tax. The latter is put forward as a better mining tax instrument on account of its non-distortionary nature. The rent tax, however, necessitates additional administrative burdens and induces tax-avoidance behavior, both leading to a net loss of tax revenue. By quantifying the distortions of royalty and the ad-valorem tax, one can establish the maximum loss that can be incurred by the rent tax. Simulation results indicate that the distortion of the ad-valorem tax is quite modest. If implemented, the rent tax is likely to result in a greater loss. While the subject matters may appear diverse, they are united by one theme. These initiatives were endorsed and supported by authorities and development agencies in the aim of furthering economic development and efficiency, but they are unlikely to fulfill the goal. Lessons for international development can be learnt from successful stories as well as from unsuccessful ones.

Flammability Standards – A Major Role in Flame Retardant Exposure? Televisions as a case study.

Flame retardants (FRs) are added to materials to enhance the fire safety level of readily combustible polymers. Although they have been purported to aid in preventing fires in some cases, they have also become a significant cause for concern given the vast data on environmental persistence and human and animal adverse health effects. Evidence since the 1980s has shown that Canadian, American and Europeans have detectable levels of FRs in their bodies. North Americans in particular have high levels of these chemicals due to stringent flammability standards and the higher use of polybrominated diphenyl ethers (PBDEs) in North America as opposed to Europe. FRs have been detected in household dust and some evidence suggests that TVs could be a significant source of exposure to FRs. It is imperative to re-visit the flammability standard (UL94V) that allows for FR use in TVs plastic materials by providing a risk versus benefit analysis to determine if this standard provides a fire safety benefit and if it plays a major role in FR exposure. This report first examined the history of televisions and the progression to the UL94V flammability test standard to understand why FRs were first added to polymers used in the manufacturing of TVs. It has been demonstrated to be due to fire hazards resulting from the use of plastic materials in cathode-ray tube (CRT) TVs that had an “instant-on” feature and high voltage and operating temperatures. In providing a risk versus benefit analysis, this paper presents the argument that 1) by providing a market survey the current flammability test standard (UL94V) is outdated and lacks relevance to current technology as flat, thin, energy efficient Liquid Crystal Displays (LCDs) dominate over traditionally used heavy, bulky and energy-intensive CRTs; 2) FRs do not impart fire safety benefits considering that there is a lack of valid fire safety concern, such as reduced internal and external ignition and fire hazard, and a lack of valid fire data and hazard for television fires in general and finally; 3) the standard is overly stringent as it does not consider the risk due to exposure to FRs in household dust due to the proliferation and greater use of televisions in households. Therefore, this report argues that the UL94V standard has become trapped in history and needs to be updated as it may play a major role in FR exposure.