Natural resource rents and transfers: concepts and preliminary estimates for Switzerland

Natural resource rents and transfers linked to natural resources are becoming an increasingly important part of national economies. However, concepts and empirical methods to measure them remain limited. This paper proposes a set of four concepts to organize and measure natural resource rents and transfers at the national level: (1) resource rent, (2) resource capital gains due to general development, (3) resource transfers through creation and assignment of rights to natural resources and (4) natural resource externality through uncompensated external cost related to natural resources. Empirical estimates for Switzerland of the period from 2016 to 2021 were computed based on available official statistics, land prices from private consulting firms and existing studies of external costs. Annual resource rents were estimated at CHF 76 billion. Resource gains amounted to CHF 167 billion. Resource transfers had a value of CHF 23 billion, and uncompensated externalities of transport, energy, agriculture and urban development a value of CHF 30 billion. Together, the resource-related transfers and rents thus amount to an estimated CHF 298 billion annually or 42 percent the size of the Swiss GDP in 2016 to 2021. The numbers translate to CHF 34’000 per person for permanent residents or CHF 54’000 for Swiss citizens over the age of eighteen. These estimates involve considerable uncertainty and should be regarded as exploratory. Nevertheless, they suggest that rents and transfers related to urban land are an important and underestimated part of the Swiss economy. Natural resource rents and transfers deserve more systematic attention in academic research and official statistics. Future work should provide more detailed empirical estimates and apply similar frameworks to other countries with different natural resources.