Marginal Concepts for Forests and Oil Preservation | Free Essay Example

Marginal Concepts for Forests and Oil Preservation

Words: 576
Topic: Business & Economics
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Circumstances that may Lead to the Opening up of Businesses to Exploit Europe’s Coal Mines Resources

Europe still has an abundance of coal reserves that can be mined. The process should be economically viable. The coal mining industry improved productivity in the past. Today, oil and gas prices are increasing rapidly. This is advancement in technology. It changes the connection linking the coal’s marginal prices and the subsidiary returns. There are circumstances that will make it worthwhile to mine coal once again (McElfish & Beier, 1990).

Due to the high inflation in the market rates, coal can act as an alternative energy source instead of the expensive oil and gas. The total revenue that will be gained from the sales of the coal will be more than the costs incurred from mining it. The profits and returns of the coal sales will be much more that the revenues made from the oil and gas markets. The labor and technology costs of mining coal is inexpensive than the oil and gas costs.

Coal is reasonably cheap to purchase in the European market due to the ample reserves and more accessibility to mine it. Coal has an uncomplicated mining process and thus it is the most economical fossil fuel to obtain. These circumstances make it more advantageous to revive the coal industry into the market (Richards, Palmer, & Barrat, 1993).

The Relevance of Marginal Concepts to the Destruction of the Rain Forests

Deforestation may arise due to the slash and burn strategy. It may also arise due to cutting down trees for energy or for industrial purposes. Marginal concepts are utilized in the analysis of the destruction of the rain forests (Rudel, 2005). The marginal revenue in the destruction of the rain forests is less than the marginal costs of destroying them (Greely, 2003). It will be more costly to deplete the rain forests for domestic or industrial purposes in the long run. This marginal concept in economics is relevant in viewing the connection between economics and the ecological significance of the rain forests (Vandermeer & Perfecto, 2005)

How Knowledge in Essential Marginal Concepts helps Develop Preservation Policies Instead of Depleting Crude Oil

According to the United States Government Accountability Office, marginal concepts entail solutions to the oil problems. The marginal gains of sustaining crude oil increase as the marginal costs of destroying it increases as well. The margin theory is very significant in making assessment. The assessment will rely on the marginal expenditure of mining the oil and the marginal proceeds attained from its transaction. The cost of mining in the oil sands is fairly high (2007).

The partition of the oil from the sand is very demanding and there should be plants that will process the oil into its constituents. Oil prices are established according to the rates in the international market. Presently, there is an existing abundance of oil. The issue lays in the capability of people to mine the oil and to refine it. Currently, there is no refinery that is capable to process the oil to sustain the escalating oil requirements.

This has led to the rapid increase of the oil prices. When the oil prices rise the marginal oil reserves are considered. These subsidiary oil reserves are rather costly to mine. Therefore, the marginal oil reserves incorporate the marginal concepts of mining oil. This essential knowledge of marginal concepts assists in developing preservation policies instead of depleting the crude oil (Krichene, 2005).

References

Greely, A. (2003). Fading forests: the destruction of our rainforests. New York: Power Kids Press.

Krichene, N. (2005). A simultaneous equations model for world crude oil and natural gas markets. Washington, DC: IMF.

McElfish, J. M., & Beier, A. E. (1990). Environmental regulation of coal mining: SMCRA’s second decade. Washington DC: Environmental Law Institute.

Richards, I. G., Palmer, J. P., & Barrat, P. A. (1993). The reclamation of former coal mines and steelworks. Amsterdam: Elsevier Publishers.

Rudel, T. K. (2005). Tropical forests: regional paths of destruction and regeneration in the late twentieth century. New York: Columbia University Press.

United States Government Accountability Office. (2007). Crude oil: uncertainty about future oil supply makes it important to develop a strategy for addressing a peak and decline in oil production. New York: Cosimo: Inc.

Vandermeer, J. H., & Perfecto, I. (2005). Breakfast of biodiversity: the political ecology of rainforest destruction. 2nd ed. Oakland, California: Food First Books.