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Should Government Regulate Natural Resources?

Updated on May 11, 2015

Government and Natural Resource Exploitation

Natural resource exploitation, extraction and/or distribution are best left to local governments instead of markets. Because all areas differ in their available natural resources and distances from other markets and production centers, self-regulation of the market could be dangerous for local economies and social welfare. Governments, on the other hand, have more access to information and can regulate and zone land resources to ensure that any resources are used in the most efficient and productive way for the local economy. Government regulation can also better insure working safety levels and more sustainable preservation of environmental systems and resources.

For example, if a local town were to experience a freshwater shortage, government could regulate against the extensive production of agriculture or water-intensive products to help preserve water and also to help save the local economy from needing to raise crop prices. Instead, the town could focus on producing goods that require less water and importing water-intensive commodities at a lower price from a different location where freshwater reserves are abundant.

In an unregulated market, however, certain producers may be fixed to a certain piece of land and have to continue producing regardless of sustainability conditions; they may even ignore environmental conditions altogether. Lack of government regulation is dangerous for the sustainability of markets with heavy-emphasis placed on natural resources.

Especially in the case of natural resource commodities like oil and gas, government regulation is highly important for safety reasons. If there were less government regulation, one could argue that there would be more oil spills and pipe bursts, both of which cause serious damage to the environment and the markets that rely on those environments’ resources.


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    • pramodgokhale profile image


      3 years ago from Pune( India)


      It is important to conserve our resources. Governments across globe should save fuels and reduce emission.emission. Unfortunately developing nations are selling their resources to survive otherwise economy would collapse.

      Due scarcity all nations are trying secure deposits and look for permanent sourcing by offering credits to small poor nations.

      Yes there should be regulation on use of natural resources. In India coastal area , mafias are exporting sand including special metals to unknown destination. This is smuggling is going on with consent of politicians.

      Water conservation and recycling is a part of water security. Saving water and can be used to cultivate land and conserve water.


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