I explain how a scaled variable royalty does the job of a super-profits tax while avoiding the accounting trickery in order to share risk and get a better public return from resources.
I guess the practical issue that comes up is how you price the large capital works the lessee has invested in if you want to buy out the lessee.
Once they have the capital built, you can't really separate the resource right from the capital. And remember, as the relevant government, you already own the resource rights.
I think there should not be a uniform way for society (via state) to charge for exploitation of natural resources
When it comes to energy, there is very little financial risk on the major capital investments (due to energy demand being very inelastic) so state ownership is the best approach.
When it comes to mineral commodities that go through demand boom and busts, adjustable royalties seem to be better
Why not just charge 5% per annum on the declared unimproved value of the resource with the option to buy the lessee out at his own valuation?
Yeah, you can do a Harberger-type tax like this.
I guess the practical issue that comes up is how you price the large capital works the lessee has invested in if you want to buy out the lessee.
Once they have the capital built, you can't really separate the resource right from the capital. And remember, as the relevant government, you already own the resource rights.
You can compensate for the book value of depreciated capital works.
And revalue annually
I think there should not be a uniform way for society (via state) to charge for exploitation of natural resources
When it comes to energy, there is very little financial risk on the major capital investments (due to energy demand being very inelastic) so state ownership is the best approach.
When it comes to mineral commodities that go through demand boom and busts, adjustable royalties seem to be better