The Myth Of Resource Sustainability
John Brätland, senior economist with the U.S. Department of the Interior, offers his observations on how economists have let the myth of resource exhaustion persist from the nineteenth century to the present, and why it is misguided.
"Claims that oil deposits and other extractive resources are "exhaustible" often conflate physical exhaustion (total depletion of the physical stock of a resource) with economic exhaustion (loss of the expected profitability required to induce resource owners to continue extracting and marketing the resource). Yet that distinction is crucial, because when private-property rights are unencumbered, entrepreneurs usually have several strategies available for maintaining the economic value of their firms while they continue to operate them."
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This is not a mindblowing article
The idea presented by Bratland is simply that we won't run out of oil. Rather, it will become too expensive to use compared to our alternatives. So, there will always be oil in the ground, but it won't be worth our time to extract it.
After developing this point he argues that government policy should encourage cheap oil by regulating it as little as possible.
Shs385 is right in saying Bratland speaks from a vacuum. Replacing oil with alternatives should have priority over creating policy for cheap oil. However, if we don't find an alternative, the price of oil will increase to a point where people necessarily use less of it.
Infinite substutions in econ - yawn. In ecology - disaster.
The paper repeats the assumption of classical economics that infinite substitutions are possible. Of course, this assumption is a given in the profession. Taken in the narrow context of economics, it's a yawner. Taken out of context into the wider world, socially we can try to direction our R&D knowing that scarcity drives up prices. Ecologically, it's a disaster.
Best,
D
Ecological Illiteracy
This is a classic example of what happens when economists live and learn in a vacuum: economic jargon maquerading as logic. Coincidence or not, the thesis justifies ever-increasing resource exploitation, unimpeded by public policy regulations. The author must have skipped class when the "tragedy of the commons" lesson was taught. Luckily this brand of Ayn Rand psuedo-intellectualism is on a steep decline, as the world begins to finally face the exaustion of one of the most vital resources: a life-supporting atmosphere threatened by massive climate change.
Herman Daly lives!
Sustainability for how many, and at what scale?
E.O. Wilson, when asked how many people the planet could sustain, replied: "At the current consumption levels of Japan or the U.S., about 200 million."
This is what is called 'ecological overshoot'.
He has an excellent and readable recent book wherein he reaches out to religious leaders to bring them into this important discussion, entitled Creation.
Best,
D