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.

1 minute read

December 17, 2007, 1:00 PM PST

By Chris Steins @planetizen

"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."

Thanks to Peter Gordon

FULL STORY: Resource Exhaustibility: A Myth Refuted by Entrepreneurial Capital Maintenance (PDF, 25pp, 280KB)

Sunday, December 16, 2007 in The Independent Institute

Energy Environment World

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