Abstract Natural resources are essential for human survival. Human beings utilize the resources to obtain food, shelter, and energy. With the recent upsurge in human population, debates have emerged on way of enhancing efficiency in natural resources allocation. This paper evaluates the current state of four vital natural resources and how they are allocated. These resources are land, water, forests, and agriculture. From the analysis, it is apparent that the current allocation strategies of these resources are biased. As a result, there is a probability that these resources will be scarce in the future. Moreover, this paper pint out that the current market oriented-allocation of natural resources compromises their ability in the future. In this regard, the paper offers an inclusive suggestion on ways of improving the current allocation framework for these resources to enhance efficiency and sustainability. The current allocation strategies used to allocate land, water, agriculture, and forests biased and require revision to enhance efficiency.

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The survival of human life depends on the availability of natural resources. Human beings utilize the resources to obtain food, shelter, and energy. As the global human population increases, the demand for natural resources also rises. Currently, there is increasing pressure on the existing natural resources such as water, land, and forests. The symbiotic relationship that existed between the humans and nature has now turned exploitive. The rise in human population has led to the overexploitation of certain natural resources for basic and economic gains leading to their scarcity. On the other hand, natural resources are not distributed evenly. Some areas face natural scarcity of certain natural resources. For instance, deserts face water scarcity while marshy areas have an excess of it. The society has tried to address this natural bias through several strategies including policies. Despite these efforts, the current economic allocation of natural resources illustrates inefficiencies that need to be addressed to maximize natural resources utilization while ensuring sustainability.

Water is an essential element of life on Earth. Both animal and plant life depends on the availability of water. Despite the fact that water covers most parts of the earth, it is among the scarce resources. According to Tietenberg and Lewis (2010), only 0.01% of all water on earth is available for human and ecosystem use. However, this water is not equally available to all parts of the globe. As Tietenberg and Lewis (2010) point out, some parts of the world are experiencing an acute shortage of water. Moreover, there is an increasing demand for water due to the expanding human population and industrial activities. According to Rasul and Sharma (2016), the expanding human population has not only increased pressure on water sources but also accelerated the rates of water pollution. In this regard, water is currently facing both quantity and quality issues.

Currently, the rate of water use is on the rise. According to Tietenberg and Lewis (2010), the daily water withdrawal rates in the United States alone in 2001 was 262 billion gallons. Globally, The United Nations Educational, Scientific and Cultural Organization (UNESCO), predicts that annual water withdrawal will increases by 10 to 12% every ten years (Tietenberg & Lewis, 2010). Economically, future scarcity of water depends on the rates of withdrawal and ability to allocate the resource among competing users. For surface water, future supplies depend on natural phenomenon such as the amount of precipitation.

Consequently, Tietenberg and Lewis (2010) point out that efficient groundwater allocation must attain balance among several competing users and provide acceptable ways of dealing with the annual fluctuations in surface water flow. To ensure a balance among users, water needs to be allocated in a manner that marginal net benefit is leveled for all users. For groundwater, future scarcity depends on the rate of water withdrawal and recharge. From an economic perspective, groundwater becomes scarce when the marginal cost of pumping is either greater than the marginal benefit of the water or greater than the marginal cost of acquiring water from other sources (Tietenberg & Lewis, 2010). In this respect, it is vital to allocate water efficiently to avert future scarcity.

Currently, all the water resources belong to the state. The state governments regulate the way water resources are utilized by both the public and private investors. According to Tietenberg and Lewis (2010), the state intervened after the failure of the initial riparian and prior appropriation doctrines. However, this current allocation strategy is inefficient as it places restrictions on water transfer, discourage instream use of water, and fails to cover user cost in groundwater (Tietenberg & Lewis, 2010). In order to address these inadequacies, the government needs to reduce restrictions on water transfers and change the current water pricing system to be more inclusive.

Land is another vital natural resource that is increasingly becoming scarce. Unlike water, land location is fixed. One cannot alter the positioning of land. Currently, humanity utilizes land for settlement purposes, agriculture, mining, urban expansion (Buhaug & Urdal, 2013). However, land use varies significantly according to location. For instance, in the developing nations, land is majorly used for agricultural production. These variations affect the value attached to land and its allocation. Just like other natural resources, land has suffered from over-exploitation and pollution due to the increasing human population and industrial activities.

Currently, land the market tends to allocate land to its highest value use (Tietenberg & Lewis, 2010). This allocation strategy is based on the net benefits that the society receives from land. For instance, in agricultural nations, the market tends to incline on allocating land to agricultural related investments. However, Tietenberg and Lewis (2010), points out that land use can shift. The shift in land use follows the economic concept referred to as bid rent functions shift. In this concept, people adopt new land practices that they perceive as having more economic benefits than the present ones.

However, market land allocation strategies exhibit several inadequacies that may cause scarcity in the future. According to Tietenberg and Lewis (2010), the market allocation is inefficient where there are cases of incompatible land use. The value of a piece of land is affected by how adjacent lands are used. In a case of incompatibility, the market method results in inefficient land allocation. Moreover, the market method relies on property rights. Consequently, it is affected by poorly structured property rights and poverty. Poorly structured property rights result in exploitation of the citizens by the markets. These inefficiencies can be addressed by ratifying the current property rights to shield the citizens from intrusion and supporting ecotourism to enhance revenues collection in preserved lands (Tietenberg & Lewis, 2010). Moreover, it is vital to lower the influence of markets in allocating land.

Agriculture is the primary source for global food supply. Countries rely on agriculture to produce sufficient food to feed their citizens. Despite the Food and Agriculture Organization (FAO) confirming that the world produces more than enough food for everyone, a significant percentage of the world’ population suffers from malnutrition. According to Tietenberg and Lewis (2010), approximately 24,000 people die daily from hunger-related causes in the world. This situation has been caused by the inability of some nations to produce or import sufficient food to feed their citizens.

Economically, food scarcity is caused by poverty. According to Tietenberg and Lewis (2010), makes poverty limits the purchasing abilities of citizens in nations that have poor agricultural production levels. Apart from poverty, food scarcity has been blamed on poor international relations between nations. Countries with sufficient food are reluctant to assist those who are lacking. In this regard, it is difficult to ensure even distribution of food products across the globe. Moreover, Jones, Mattiacci, and Braumoeller (2017) posit that natural calamities such as drought also causes temporary food shortages. In this case, food scarcity can be caused by noneconomic issues.

Several methods have been developed to deal with the current and future food scarcity issues. However, economists argue that the best method is to enhance the economic capabilities of the developing nations. With an improved economic ability, the global population will be able to purchase the food in spite of the increasing prices. However, the current measures such as offering food products at subsidized prices are not economically viable. Moreover, the developed nations need to assist the developing nation with technologies that improve agricultural production. These technologies, together with access to credit markets will enable the small-scale farmers in the developing nations to produce sufficient food.

In this era of environmental conservation, interests in forests have significantly increased. Forests offer valuable products and services. According to Helles, Holten-Andersen, Wichmann (2001), forests offer raw products used in paper and construction industry. Moreover, the trees and vegetation in forest serve as Carbon sinks. Despite this importance, the global forests cover has shrunk significantly. As Tietenberg and Lewis (2010) point out, in 1995, the global forest cover was at 31.7%. This figure has dropped drastically due to the increased conversation of forest land to agricultural, settlement, and industrial areas.

Consequently, there is a potential for future scarcity if the forests are not harvested sustainably. According to Tietenberg and Lewis (2010,p. 253), “sustainability refers to harvesting no more than would be replaced by growth.” Currently, forest tree resource harvesting is based on profit maximization. However, this method of allocation exhibits several inefficiencies. According to Tietenberg and Lewis (2010), the method lowers the incentives for both the landowners and the nation resulting in accelerated rates of deforestation. These inefficiencies can be addressed by implementing a public policy that reduces pressure on forests. These are the policies that enhance the benefits of the forests both to the landowners and nations

The current human utilization of natural resources compromises their future availability. The symbiotic relationship that existed between the humans and nature has now turned exploitive. Humans are overexploiting the natural resources reducing their economic viability. The current allocation strategies used to allocate land, water, agriculture, and forests biased and require revision to enhance efficiency.

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  • Helles, F., Holten-Andersen, P., & Wichmann, L. (2001). Multiple Use of Forests and Other Natural Resources: Aspects of Theory and Application. Boston: Springer Science & Business Media.
  • Jones, B., Mattiacci, E., & Braumoeller, B. (2017). Food scarcity and state vulnerability: Unpacking the link between climate variability and violent unrest. Journal of Peace Research, 54(3), 335-350.
  • Rasal, G., & Sharma, B. (2016). The nexus approach to water–energy–food security: an option for adaptation to climate change. Climate Policy, 16(6), 682-702.
  • Tietenberg, T. H., & Lewis, L. (2010). Environmental Economics and Policy. Boston: Addison-Wesley.