Targeting rents: Global taxes on natural resources
| Date | 01 October 2020 |
| Published date | 01 October 2020 |
| Author | Magnus Reitberger |
| DOI | 10.1177/1474885117707137 |
| Subject Matter | Articles |
EJPT
Article
Targeting rents: Global taxes
on natural resources
Magnus Reitberger
Department of Political Science, Stockholm University, Sweden
Abstract
In the debate on global justice, proposals to tax natural resources in order to reduce
global poverty and fund other worthwhile objectives have attracted scholarly attention
and controversy. In this article, I argue that this debate can be advanced by more clearly
focusing on natural resource rents rather than resources themselves or the undiffer-
entiated stream of benefits they generate. I argue that taxes on natural resource rents
cannot be reasonably rejected by either side in this debate, and that the arguments
typically used to resist distributive claims to natural resources either have no relevance
when it comes to rents, or actually support such taxes.
Keywords
Economic rent, global justice, natural resources, poverty
Expanding philosophical scholarship has focused on the question of whether states
owe duties of distributive justice towards foreigners with regard to natural
resources.
1
In the broader global justice debate it is often argued that unequal
ownership and command over natural resources constitutes a particular ground
for justice, since such inequalities are particularly hard to justify (Beitz, 1999; Risse
2012). Natural resources are generally speaking undeserved and non-produced,
making it difficult to argue that anyone has a stronger claim to them than
anyone else. Although labour is typically required to extract and process them,
the resources themselves are not produced by anyone. Furthermore, natural
resources are both vital to human interests and scarce in the sense that more for
some will automatically mean less for others. Entitlement claims to natural
resources will therefore be essentially distributive, giving some people the advan-
tage of access but denying it to others. They are also external to persons, unlike
natural talents, and are much easier to redistribute (Armstrong, 2015; Casal, 2011:
312) Given these characteristics, it is not surprising that many conceptions of
global justice start from the intuition of prima facie equal right to natural resources
European Journal of Political Theory
2020, Vol. 19(4) 445–464
!The Author(s) 2017
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DOI: 10.1177/1474885117707137
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Corresponding author:
Magnus Reitberger, Department of Political Science, Stockholm University, SE-106 91 Stockholm, Sweden.
Email: magnus.reitberger@statsvet.su.se
(cf. Blake and Risse, 2009; Casal, 2011: 312–313; Steiner, 1999) and sometimes also
to land,
2
or at least the recognition that egalitarian concerns are particularly com-
pelling for such resources. Accordingly, some form of luck-egalitarianism with
regard to natural resources in the global context has been defended by a large
number of philosophers, among them Pogge, Caney, Fabre, Moellendorf,
Tan and Barry, as well as left-libertarians like Steiner, Vallentyne and Otsuka
(cf. Armstrong, 2013a).
Within this broader field, a subfield has been particularly concerned with taxation
of natural resources (Casal, 2011; Pogge, 2002; Steiner, 1999). Such taxation could
provide a significant source of revenue for international organizations to alleviate
global poverty, fight disease, assist refugees and assist developing countries in coping
with climate change, among other things. Taxing natural resources is also econom-
ically and ecologically appealing, since a properly designed system of resource tax-
ation would not provide disincentives for labour, and investments and can be used to
encourage conservation and deter pollution and waste. The currently most-discussed
proposal along these lines is Thomas Pogge’s Global Resources Dividend (GRD),
which is based in part on the idea that the global poor have an ‘inalienable stake in all
limited natural resources’ (Pogge, 2002: 196). The GRD should be seen as compen-
sation for unjust exclusion from a single natural resource base, or earnings
derived from such a base. In other words, it is assumed that people have a basic
pre-institutional entitlement to an equitable share of the world’s natural resources.
The GRD can be justified in a backward-looking way, as compensation for unjust
appropriation. In a similar vein, Hillel Steiner’s argument for a Global Fund (1999)
assumes that all people have equal claim to land and natural resources. For Steiner,
all individuals have an equal right to appropriate natural resources and to the extent
that some individuals appropriate more than their equal share they must grant
others compensation equivalent to the value of their excess share. While Pogge’s
GRD taxes the extraction of natural resources, Steiner’s fund would tax ownership
based on rental value. Pogge’s GRD aims to distribute resources to the poor,
Steiner’s fund to distribute equally to everyone on the planet. However, such
taxes have been criticized for being arbitrary, regressive and potentially counter-
productive in relation to their stated purpose, since they may impose heavier burdens
on the poor than on the rich (Hayward, 2005).
In this article, I seek to contribute to the debate on resource taxation by reviving
the age-old distinction between resource rents and resource revenue more broadly
conceived. My approach is ecumenical in the sense that it seeks to find a middle
ground that can appeal to both supporters and critics of resource taxation. This
can be done by shifting focus from taxing resources themselves, or simply taxing
the income from such resources, to specifically taxing the rents that they generate.
Resource rents are defined as abnormal profits from the sale of resources above the
level that would be needed to economically motivate the development and distri-
bution of the resource. Such rents make a pro tanto attractive base for global
taxation, both from a moral and an economic point of view. The distinction
between resource rents and other sorts of resource revenue is a classic one
in economics, but a largely neglected topic in contemporary political theory.
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446 European Journal of Political Theory 19(4)
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