The Values of Natural Resources and The Benefit of Economic Goods

Study about the efficiency of natural resources such as the net benefit of forest, quality of fresh water, quality of air, quality of land, and the benefit of fossil fuel and other renewable energy resources in terms of natural resource economics is more complicated than study about the efficiency of other economic goods although both of them are the same purpose, efficiency. Study in economic goods is considered only a value based on whether it should produce or not at that time by using the market mechanism. Its system is relied upon the significant cost called opportunity cost. In other word, a production of economic goods will happen whether or not depended upon opportunity cost. Therefore, Efficiency of economic goods relies on both an economic value and an opportunity cost at that period of time.

Regarding to natural resources, although they use the same tool, opportunity cost, to consider efficiency, a form of its consideration is different from a form of economic goods as the benefit happened in natural resources did not have only a value at that time. When you consider the value of natural resources, you have to consider various aspects. As a result, you can categorize the value of natural resources into three vital groups. As follow:

1.Use Value: it is the consideration of a tangible value of the natural resource benefit. It can divide into two kinds of benefits: direct use(the benefit is directly to use such a natural resources) and indirect use(the indirect benefit from the use of natural resources)

2.Nonuse value: it is the consideration of a benefit from good feeling when you knew that natural resources is well even though you didn’t receive both a direct benefit and a indirect benefit at that time. You can group into two groups: existence value(the benefit of people who aware that natural resource is well.) and bequest value(the benefit of people when you aware that they are well enough to put aside for next generations.)

3.Option value: it is the consideration of a value which didn’t happen right now both use value and nonuse value, but it is likely to use such a resources in the foreseeable future.

In sum, the consideration of entire benefit of natural resources in term of natural resource economics is a combination among use value, nonuse value, and option value. Pertaining to entire cost of natural resources, you have to consider the whole opportunity cost from each of value mentioned above.

Total Benefit(Total Willingness to Pay) = Use Value+Nonuse Value+Option Value

CCS: Carbon Capture and Storage Technology

Today I searched for information of policy act in Department of Environmental Protection, WV State of Government. I found idea of CCS technology that this department will comprise it to be one of the projects in “Clean Coal Plan”. This project funds from the state government budget about $37 million of dollar. However, only the CCS development plan is approximately 40% of the whole project budget.

Therefore, I think that CCS technology in WV energy industries such as coal industry, oil industry, and other renewable energy industries is more vital importance. Studying of CCS technology is necessary for entrepreneur related to those sectors to prepare themselves with changing circumstances.

First of all, I will explain concept of CCS technology. Actually CCS technology has been a role in energy sector for two decades. Since people around the world have paid attention to aftermath of a climate change and a global warming problem, intellectuals have tried to devise new technology to militate this problem continuously. One of the important technologies is CCS model. CCS technology is a mean of mitigating the contribution of fossil fuel emission to global warming, based on capturing carbon dioxide from large point sources such as fossil fuel power plants, and storing it away from the atmosphere by different means.(World Coal Institute)
CCS technology is directly relevant to geo-engineering. I didn’t study in this field at all. However, this paper would like to explain the concept of CCS. The key point of this technology is the method to capture carbon dioxide during production process. At this time we have three methods to capture it and one methods operating to develop. First method is post-combustion capture, the method that carbon dioxide is removed after combustion of the fossil-fuel and this method is well understood and is currently used in other kinds of energy industrial applications even though not the same scale as might be required in a commercial scale power station.

Second, pre-combustion capture applied in fertilizer, chemical, gas fuel, and power production. Its result of this method is that carbon dioxide can be captured from a relatively pure exhaust stream. The hydrogen dioxide can now be used as fuel and the carbon dioxide is removed before combustion takes place. Third, oxy-fuel combustion is burned in oxygen instead of in air. The carbon dioxide stored is not a fraction removed from the flue gas steam but the flue gas stream itself. Moreover, a certain fraction of the carbon dioxide generated during combustion will inevitably end up in the condensed water called zero emission. However, this method has to use advanced knowledge of chemical elements for understanding and studying it. Another method that is operating and developing called chemical-looping combustion, this method uses a metal oxide as a solid oxygen carrier to support burning fuel production. All of them are the fundamental concept of CCS technology. Next time I will explain the importance of this technology in term of energy economics.