Abstract
While sand has become a scarce essential resource for construction and land reclamation worldwide, its extraction causes severe ecological damage and high social costs. To derive policy solutions to this paramount global challenge with broad applicability, this model-based analysis exemplarily studies sand trade from Southeast Asia to Singapore. Accordingly, a coordinated transboundary sand output tax reduces sand mining to a large extent, while the economic costs are small for the sand importer and slightly positive for the exporters. As a novel policy implementation approach, a "Sand Extraction Allowances Trading Scheme" is proposed, which helps sustainably balance the importer's economic growth with the exporters' economic development.
Highlights
This article increases public awareness of a paramount global challenge which is hardly known and rarely discussed in the mainstream media and the policy debate: On the one hand, the dependence of the world economy on sand used for any kind of building and infrastructure
While huge amounts of sand are essential for construction, for land reclamation and for shoreline restoration worldwide, it is often overlooked that sand has become scarce and that sand extraction causes severe ecological damage in oceans, in rivers and on beaches
We focus on the sand trade of five Southeast Asian exporters, Cambodia (KHM), Myanmar (MMR), the Philippines (PHL), Malaysia (MYS) and Vietnam (VNM), with the importer, Singapore (SGP)
Summary
This article increases public awareness of a paramount global challenge which is hardly known and rarely discussed in the mainstream media and the policy debate: On the one hand, the dependence of the world economy on sand used for any kind of building and infrastructure. The scarcity of usable sand and the vast ecological and social costs of sand mining To this end, this article provides the first economic analysis of sand mining, sand trade and related public policies. This article assesses policies regulating sand exports from developing countries in Southeast Asia to Singapore [2]; a topic that seems to have received no attention from economists The procedure of this exemplary policy assessment and the (qualitative) policy recommendations can directly be transferred to other countries and expanding (mega) cities in the world, especially to (emerging) municipalities extending or improving their infrastructure and housing. A crucial challenge has existed for decades: The amount of Singapore’s available land is limited, which has resulted in skyrocketing housing and infrastructure construction as well as massive land reclamation These measures require vast amounts of sand and gravel.
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