Countries whose economies are affected to some extent by environmental rents are currently the subject of much debate and debate, both in scientific and political circles. The main question, to which there was no unequivocal answer, is the relationship between this concept and the improvement of indicators of the economic sector.
Does the wealth of the bowels of the land always give the state the status of a financially stable and independent power? The answer to this question is not unambiguous, since everything directly depends on the policy pursued by the government of the state.
For some countries, environmental rent has become a source of successful investment of budgetary funds in the development of the industrial sphere. And for others, this is the subject of enrichment of the oligarchic strata of the population and inappropriate expenditures on projects with low profitability.
Natural resource rent in Russia is very relevant, as the country is one of the largest exporters of the most important raw materials. This article will talk about the process of formation, appropriation and use of superprofits of this type.
What types of given income exist?
All types of natural rent are united by common signs and conditions. All of them have the following identical points characterizing this concept as a whole:
- Extra income, or excess profits.
- Natural rent is formed at the expense of labor or capital.
- Assigned for the use of natural resources with limited reserves.
Types of natural rent arise due to the allocation of a variety of classification features. The first is the type of natural components consumed by man. Depending on this factor, there are:
- Land type. He, in turn, is divided into two types, which are formed according to the locality. The land type may be agricultural or urban.
- Mountain type.
- Mineral type. In this case, oil-gas-bearing or mining basins will be exploited.
- Forest type.
- Water type.
- Fishery type.
- Transport type.
- Recreational type.
Regarding such a classification feature as a method of use, the following types of such a concept as natural rent are distinguished:
- Differential form. The source of its production is the exploitation of the most advantageous geographically deposits. Natural resources themselves are distinguished by increased quality. Due to its differential form, it is possible to fairly separate and distinguish natural components. This form is used for all types of sources.
- Absolute. It is used as payments for the operation of any nature management facilities in terms of quality and terrain.
- Monopoly form. In this case, the subject, in relation to which the natural annuity is formed, is not just a user, but an owner. A distinctive feature of the natural component in this case is uniqueness and uniqueness.
- Quasi-rent. It is a subspecies of the differential form. A characteristic feature of quasi-rent is that it arises in the process of exploiting natural resources using effective, modernized technologies. Due to this, the object should be enriched and become more productive. That is, oil and gas bearing strata should have greater returns, the degree of extraction of minerals will increase, and land will become more fertile.
The concept of natural rent is also differentiated on a territorial basis.Depending on it allocate additional profit of local, regional, national and world significance. This is determined by the scale of the market within which the extracted natural resource is sold.
What are the features of the formation of superprofits?
The essence of natural rent is that its implementation allows you to optimize the situation among competitors involved in the development and operation of natural resources. A feature of this concept is that rent is assigned not just to users of elements, but to its owners.
The value of this excess profit varies depending on the general situation on the world market. The fundamental and formative factor is the price ratio. At a time when there is a sharp decline or rise in the cost of goods or services, which include some of the natural resources, the economic natural rent changes both in volume and in norm.
The Government, through various regulatory acts, regulates rental relations in the state with respect to natural objects. It is formed depending on the form of ownership and gives the owner most of the additional profit when using resources.
What risks may arise regarding rental relationships?
The rent for the use of natural resources can both bring positive results for the country's economy, and only exacerbate the current situation. For states that are rich in such facilities, the temptation to simply raise additional funds is increasing. Moreover, no share is provided for the development of industries, stabilization of the process of social and financial development is not provided. In this case, there is not just a recession in all sectors, but also a general destabilization and restructuring of reproduction. The situation is developing in this way, because the expectations and plans that various strata of the population counted on are not met. There are not enough opportunities to implement the plan. As a result of this, a split in society often occurs with all the ensuing consequences.
Many experts agree that the market for natural resources is very specific. Rent, the method of its formation, appointment and accrual are largely determined by the political direction. That is, success is more characteristic of powers developed economically and socially, but poor in terms of the number of natural objects. States with rich, diverse and strategically important resources are more at risk.
That is, it can be said that in the absence of investments in the development of all life-supporting spheres, a situation of instability of the economic development of a certain state may form. The level and quality of life of the population, production potential will also leave much to be desired. This indicates poor growth in the financial sector. The risk of a situation in which the sectors of the national economy will develop heterogeneously also increases. The country as a whole will be subject to any fluctuations from outside, and the sharp jumps in prices for raw materials can easily bring it out of equilibrium.
Also, natural rent abroad has shown that other negative trends are also being traced. These include the phenomenon of corruption, aggravation of clashes and competition for spheres of influence and control over sources.
What is the situation in Russia?
The fact that such a negative situation is taking shape in the world cannot but worry domestic specialists. Natural resource rent in Russia has a significant impact on the economy and life in the country as a whole. A feature of Russian trends is that there is a clear dependence of the development and prosperity of the financial and social sector on natural resources.Moreover, these phenomena are formed against the background of a decrease in industrial activity in the region. Of course, natural rent arises and appears in the budget of the country in a completely different volume, depending on the current situation.
Also, many experts note that with the strengthening of the position and size of additional profit, some processes are taking place. For example, the percentage of profits from the sale of oil, its derivatives and natural gas reaches more than sixty in export earnings and twenty percent of gross domestic product. This cannot but affect the ruble exchange rate. It strengthens its position, and the cost of exchanging domestic currency increases. The dynamics of inflationary processes shows positive results, which means that this phenomenon is gradually disappearing. A positive point in this situation is the excess of exports over imports. This is made possible thanks to the high cost of energy in the global market. There is also a drop in labor productivity in industries such as manufacturing and mining.
What is the relation to the idea of complete withdrawal of rent?
At the moment, natural rent arises in industrial zones and cities, rent is withdrawn using various tools. This happens through fees and taxes that are more specific to the mining industry. Today, the possibility of a complete withdrawal of superprofits is being actively discussed. Regarding this issue, two opposing opinions have been formed.
According to the first position, natural rent in Russia for citizens should bear the corresponding benefit. That is, the people are the direct owners of the lands and all those objects that are within them. Thus, the additional profit should belong to people and be due to them in cash. All supporters of this idea want this type of annuity to be completely withdrawn and distributed in appropriate shares between the population. If we discuss this issue regarding the Russian situation, it turns out that this kind of income from the oil and gas complex is an impressive amount of funds. Plus, you can add fees for the violation of the ecological balance received from enterprises in the metallurgical industry and hydropower. As a result, the amount will vary in the region of fifty billion dollars per year.
But in this case it is worth noting that the rent on natural resources must be properly formed and withdrawn. That is, when determining its size, several important factors must be taken into account. These include the specifics of extractive industries. Different enterprises require resources in a completely different amount. That is, such production conditions as water supply, the availability of transport hubs, infrastructure and recreation in the regions are not at the same level. All this must be taken into account so that enterprises remain able to pay fees without facing the risk of bankruptcy. That is, it is nevertheless necessary to leave some kind of share in order to give an impetus to the dynamic development of the sphere. This takes into account not only security factors, but also the natural resources themselves. Before the appointment, it is necessary to assess the quality of the raw materials received, the environmental impact. So far, domestic specialists have failed to make these calculations as accurate and fair as possible.
What is the second position in this regard?
Another opinion of experts studying natural resource markets and economic rents suggests that it cannot be seized for a number of reasons. As for the enterprises of the extractive industry, we can say that excess profits in their case are not a source of enrichment, but a way of paying off costs. These include the following waste factors:
- operating costs;
- fare;
- state taxation (taxes on profit and property are added here);
- a tax on the extraction of raw materials such as oil and natural gas;
- export duty.
The last two points are highly dependent on world prices for these types of minerals, as they are strategically important, and any cost fluctuations have an impact on the entire market. In the end, after charging all the costs, the share of the mining company itself remains a mere penny. If we still talk about the seizure of natural annuity, then organizations simply will not have a budget for development, debt repayment and the implementation of new projects.
How is redistribution carried out?
A specific feature of the problem of redistribution of additional profit in Russia is its openly politicized character. Many people aspiring to power, on the eve of the election, make promises that they will give natural rent to pensioners, that it is this that is the key to prosperity and a good life. But, essentially, the purpose of such discussions is nothing more than redistribution. That is, how to take away finances from some and give to others. The fact that natural rents will be given to retirees has been said repeatedly, but, in fact, the division occurs according to the same scheme. In Russia, super-profit is divided into fifty to fifty. World practice shows that it is realistic to take only a third of the income. The situation on the domestic market makes it possible to expand the tax framework, albeit in a small range.
The one thing that both adherents of one and supporters of another opinion are united in is that natural rent has the right to exist. The only thing that is the subject of a fierce debate is the mechanism of its accrual and the proportion of division.
In business practice, this process is as follows. To begin with, Russian law defines the very concept of environmental management objects. In the entire definition, which is fixed by state regulatory legal acts, the main thing is that all the bowels of the earth are the property of Russia. But what is withdrawn from these very bowels can have various forms of ownership. This suggests that the owners of the extracted are both private owners and the country itself.
Then it is necessary to explain the very mechanism of determining the owner or form of ownership. If you follow the logic, the moment of transfer of resources from the control of the state to the ownership of a private enterprise is determined by their location and degree of development. That is, when they are already mined, natural objects pass into the ownership of enterprises. For such a right, the organization is obliged to pay the corresponding taxes to the treasury. For them, the owner, one might say, acquires minerals, which he disposes for his own purposes. Mostly this implies subsequent marketing and profit. But no state regulatory legal acts fix this fact of transfer as a purchase and sale transaction or any other way of alienating property. This suggests that there is a mismatch between the actual procedure and the information fixed by law. From the legal side, this process is unlawful and has no power. It turns out that private owners are unreasonably enriched.
What are the methods of rent extraction?
When natural rent arises in the agricultural sector or in any other sphere, it will certainly cause a rather controversial problem to remove it. On the one hand, the interests of various segments of the population must be satisfied (so that there is no split in society), but it is also necessary to implement this only within the framework of the current legislation. Various tools exist to resolve these issues. They are divided into two large groups:
- tax system optimization;
- establishing links between the government and the owners of the extracted and developed resources.
What applies to tax system optimization methods?
This group of instruments of influence and regulation may include such a method as the introduction of a tax on mining. It should not be fixed, and its calculation must be made, referring to the profitability of the field during the year. This will make the tax system more flexible. The implementation of this mechanism is necessary for such superprofits as natural rent, since its size also cannot be constant due to the specifics of the operation of such enterprises.
The second type of tax is the recovery of two-thirds of the additional profit of users of natural objects.
In relation to the Russian Federation, these instruments may not bring the expected result. The effectiveness of tax methods is reduced due to dishonesty of individual private entrepreneurs. This is confirmed by the fact that the bookkeeping of some organizations is incredibly unprofitable, and additional penalties will only lead to bankruptcy. Owners of natural objects, in order to somehow circumvent the tax system, indicate increased costs and cost of work. It follows from this that if theoretically there is no superprofit, then there will be nothing to withdraw.
What about non-tax methods?
Other tools include the possibility of concluding a lease agreement between the state and private entrepreneur. The fee in this case must be set as a percentage. This practice has been introduced in Yakutia and is beneficial to both parties. But the problem is that, according to the legislation, such a method can be applied only to things that do not lose their natural properties during their operation. The essence of this is that the developed subsoil has other physicochemical characteristics and is not returned to the lessor in its original form.
The second proposal is the allocation of an amount of a certain size, which will cover all the costs of the enterprise and will be sufficient to maintain the profitability of the organization at the proper level. In this case, the balance will be sent to the state treasury, and it will be equal to the difference in market price and the amount of economic value. This method is good if it is carried out on a competitive basis. In this case, it is possible to identify the lowest production price at which profitability indicators will remain.
All these methods to one degree or another deserve attention, but there is no one and the right among them. All tools require refinement in order to redistribute additional profit in accordance with the interests of both citizens and the state. So success will only have a competent integrated approach.