 Okay, thank you very much Mr. Chair and thank you all for coming. I'm so happy to present this work today which is on renewable resources, simply because studies on renewable resources have not received much attention in the past, especially in developing countries, and especially studies on fisheries and small-scale fisheries for that matter. So, I would like to begin by saying that renewable resources, if you think about them as fish stocks, common grazing fields, underground water, forest stocks, these resources could generate benefits from now into the future depending on how these resources are managed. In effect, these renewable resources to most communities could be more beneficial than gold and diamond. Now let's think about this. In most countries in Africa, royalties that are paid for gold extraction is so low. In fact, a study I did in the past indicated that Ghana, for example, was receiving 3% of the revenue that is generated from gold extraction and many other countries also receive equally very low percentage royalties. A country like Nigeria, for example, did not have any percentage. The minister of mine has to decide how much the company has to pay the state. So, when I did a calculation trying to compare that royalty that the country receives with the damage that mining does to the rainforest, and then considering just the non-timber forest benefit alone to communities, I realized that the royalties, which is 5%, is much too low. In fact, the destruction of the forest and then the opportunity cost, which is the non-timber forest benefit that the community has to forgo was about 30%. So, royalties has to be about 30% to just account for the non-timber forest benefit that the communities were losing. So, in effect, it would have been better for the communities to use the forest for other benefits than forgo to be extracted, which requires clearing the forest. And the same applies to many other resources. We generate so much benefit to communities when they are renewable. In the worst poorest regions, these renewable resources form the bedrock of the societies, the communities. And these resources are usually owned and managed by communities as a community resource, a common poor resource. But what we have realized is that most of these resources are subject to overuse. In fact, most of them are overcapitalized, meaning that there is so much investment in the harvesting of those resources, and the harvest levels are not sustainable. And this situation is hidden in his very famous paper that he wrote in 1968 called The Tragedy of the Commons. Well, there has been other concerns that have been raised that, well, if you allow communities to manage these resources, it is possible that they will design rules that will ensure that these resources are managed in a way that that tragedy will be prevented. But we also know that if the cost of harvesting the resource is very low, if it doesn't cost much to go there and extract fish or cut a tree in the forest, the competition to harvest, to catch the next fish before my neighbor goes there to catch it, there is a tendency that the harvest levels will be far more than what should be sustainable, and in some cases, stocks can even collapse. So let's take example of capture fisheries, for example, meaning fish in the wild, in the ocean, or in the lakes, inland waters. In sub-Sahara Africa, small-scale fishing generates so much revenue. In fact, it could generate over $10 million a year, and then it also creates employment for a lot of people. It is estimated that revenue that is generated annually is at least $2 billion directly, and there are other people who are indirectly involved in fishing activities like processing of the fish and trading of the fish, and they get about two and a half times the direct revenue that is generated from just catching and selling the fish. Indeed, this gives us an indication that these resources are extremely important for rural communities and for most people in developing countries who are not even in rural areas in those countries or are not directly engaged in the fishing itself. The same applies to forest stocks and then groundwater, which is so important to a lot of countries. And now, as I said earlier, most of these resources are over harvested, implying that the rate at which the resources are harvested is much higher than the rate at which the resource is replenishing itself, which is a problem. Now, let's take this graph, for example, about catch losses in countries in Africa, and then you can clearly see that for a number of countries, catch losses are very, very, very high, implying that they are catching more than they are supposed to be catching, and thereby having lower revenue than what the stock is supposed to be generating to these countries. There are a number of factors beside the competition for the stock that contribute to over harvesting of most renewable resources. The first that we've talked about is a situation where we have the resource harvested as a default open access, where anyone who has a boat can go there and catch fish or a common grazing area where anyone can just talk it and send the head there to feed in the area, or underground water where anyone can just extract and use it for whatever purpose he or she wants. Now, that is the first. The second issue is that there is what we can call misperception or ignorance about the bio-physical dynamics of most of these renewable resources. There was an interesting study that was done, an interesting experiment where fishing managers in a Western country sat in a room like you are here and were made to harvest the fish in an experimental setting, and they assigned them the property right, the sole right to that stock. Yet they overharvested. Overharvesting means they were catching more fish than they were supposed to catch and therefore getting lower revenue than what they should have gotten if they had caught a little bit less than what they were catching. The implication here is that the dynamics, the way stocks evolve over time is a little bit complicated and it's very difficult for most people to understand. So even if you grant societies or communities the sole right to manage, if they don't have good knowledge about the dynamics, the bio-physical dynamics of the stock, it's possible that the next time you go there, they would have overharvested the stock and the stock levels would have gone down much more than they are supposed to be. And of course, that explains why even in the Western world, with all the best known policies that we have, some stocks have shown signs of collapse. The coal stock, for example, is a typical case in point. Now, the other problem is about political expediency. In most developing countries, fishermen, especially small-scale fishers, form a formidable force in politics. If you don't treat them well, they will go to their pools and then they will show you the way, they will vote you out. Because of that, governments increasingly embark on perverse policies like subsidizing fishing inputs when there is clear signs that fishermen are getting less and less and less catch. In Ghana, we have subsidies on fishing fuel, which is called premixed fuel. And sometimes government will buy outboard motors and then give to fishers at very subsidized prices when indeed we are supposed to be doing the reverse. Now, just a graph here to illustrate something. When you look at this graph, if you consider this to be the revenue from fishing, this is of course the maximum point, meaning that we are supposed to be investing this amount of effort in the fishing. But suppose that we misunderstand or we misperceive the dynamics of the stock. It is possible that if that misperception led to this graph and the true reflection of the fishery is supposed to rather be this, this effort level, even if we do the best to catch the fish at a level that will give us the maximum revenue that can lead to the collapse of the stock. This means we have exceeded the maximum level of effort that we're supposed to be investing in the fishery. Okay, so one question that we can ask is, are there ways of addressing this problem? Suppose we even understand the way the stock evolve over time, but the fish is harvested by a community. Is there a way to formulate a policy that can address the over-harvesting problem? Suppose we have a harvesting level or harvest level that is sustainable, that we yield benefit from time to time to time, especially in developing countries. Now, let me just bore you a little bit, but I'll be very fast. So suppose we assume that this is the rate at which the stock is evolving over time. This is the growth of the fish and this is the harvest of the fish. So in steady state, we are only harvesting the growth, so x dot to be zero. And then we have an equation that says the growth of the fish should reflect the harvest. Now, if we solve, we have an equation that we call the yield function, giving us the relationship between harvest and then effort. Now, suppose we have a number of fishers in the fishery and each fisher is investing an effort level i and the total effort in the fishery is this. Then the fishers share in the total revenue will simply be my effort divided by the total effort times the total revenue that come from the fishery. Now, this could be maximized if we have a cost function for the fisher. This would be constitute the revenue or the profit, the revenue function. This would be the cost per unit effort times effort. So if we maximize this, we obtain a function that looks like this. Well, this is a very interesting relationship. What this is simply saying is that 1 minus 1 over n is the number of people who are engaged in the fishing times the average revenue from the fishing plus the 1 over n times marginal revenue is equal to the marginal cost, which is same as the average cost of fishing. If you have only one person catching the fish, then this is zero. So you have marginal revenue is equal to marginal cost, which is the condition that we require for maximizing profit. However, if x is infinity, then we have average revenue is equal to average cost, which is the level of harvest where profit is completely exhausted from the fishery, which is the open access equilibrium condition. So in effect, what I'm trying to say is that if you allow everyone to fish anyhow, any quantity, this may be the level of profit because this level of effort completely exhaust profit in the fishery. Profit is zero at this point. On the other hand, this is what we want because this is the effort level that generate the maximum different between the revenue and the cost. So open access will be here. One individual will be harvesting this and then common pool resource will be in between. Now it is possible that if we can impose a tax on the cost per unit effort, we can now bring the system back to the first best level, which means that we can solve for tar, which is the tax rate here. And we have an expression for the tax. Of course, if n is one, meaning we have one individual, the tax is zero, meaning there's no need to tax if you have only one individual in the fishery. And if you have more individual, the tax rate increases. And e here is simply the yield elasticity of effort. Now this graph also just illustrates the same thing. And then as we see the tax is increasing in the number of fishes. So more people you have, the more tax you impose per unit of effort. And then, so let's, okay, suppose we look at a fishery as something that is done from time to time to time in a dynamic way. Then we have to think of all the stream of benefit that can be derived from the fishery. So we maximize not a static function, but a dynamic function over time. Now, if we do that, I don't have the equations here, but I can always make it available to you that tax expression becomes this. Now we can see that again, if the number of fishes increases, then you must increase the tax on the effort. If the price of fish increases, there's incentive for people to go there and catch more fish. So you increase the tax rate. If this country, social discount rate increases, meaning society doesn't care about tomorrow very much, then the tax rate should be lower. And then we use data from Ghana to try to illustrate this and then calculate a tax rate which should be imposing the fishery, which is about 10.5% on the effort. And fishing effort here, a dominant fishing effort is the premixed fuel that the fishing vessels use when they go to fish. And then if we do this for the dynamic problem, this will be the tax rate, which is 13%. And then we have shown, for example, that if the discount rate is higher, the tax rate should be lower. These are just simulating the results for the various configurations of those parameters that we use. Now in conclusion, I would like to mention that a large proportion of the world population live in rural areas. They live in communities where the natural resources that are renewable in those communities form the basis for their survival. And it's very important we pay attention to that. And then as I said, these resources are more beneficial than gold because gold may generate a one-time benefit. And in this case, we have realized that because capital for extracting gold comes from foreign direct investment, the benefit that actually accrues to those communities and the countries that attract this foreign direct investment is so low that it's not even able to internalize the environmental opportunity cost that comes as a result of mining. So it is very important that we design rules that will govern the extraction of these resources so that it doesn't benefit only the present generation but generations after generations that will come to meet these resources. And we have seen that it is possible to compute a tax rate, for example, that can target one of the main inputs that is used for extracting that particular resource and that tax rate can generate the first best outcome. Thank you very much.