17. Nonrenewable Resource Management
Many goods are easily reproducible; it’s always possible to make more of them.
goods, though, such as metals and fossil fuels, are in finite supply; we cannot create more of
The fact that they are irreproducible creates special concerns over their use.
exhaust, for instance, oil supplies, what will be the consequences for our oil-driven economy?
Should we avoid all use of nonrenewable resources?
If we do use them, how do we address the
problem that, at some point, we will run out of them?
This chapter will examine
The role of opportunity cost in allocating nonrenewable resources between the present and
Why the zero profit condition is inappropriate for nonrenewable resources.
The factors that affect efficient allocation of nonrenewable resources over time, and how
those factors affect the extraction path.
Whether running out of a nonrenewable resource is a problem.
A Nonrenewable Resource
Trees are a renewable resource, of course.
If we harvest trees, they can grow back.
then, are redwoods the example for this chapter?
In fact, renewability for most resources
depends on time scale.
Petroleum, for instance, comes from decayed plant material that was
compressed in the absence of oxygen for thousands of years.
We could re-create petroleum
deposits, but the time scale is unreasonable; by the time we created new oil deposits, civilization
would have long since found another energy source, or evolved into completely different
Many agricultural crops, on the other hand, are reproducible annually, or even more
Renewable resources, such as fisheries or trees, typically grow to maturity over
periods in between these extremes.
How renewable a resource is, then, depends on its time scale.