Resources, Growth and Sustainability

Abstract

This chapter returns to the Malthusian question: are we running out of resources, whether due to population growth or rates of use of both exhaustible and renewable resources. More generally, the question is whether the natural resource base of the economy is adequate to sustain current standards of living. The literature on attempts to estimate measures of resource scarcity at different points in time is reviewed, with some new material, focusing on both physical measures such as reserves, and reserves/production ratios, and economic ones such as costs and prices. The modern statement of the question further broadens the definition of resources used in the production of goods and services (including environmental services as analyzed in the preceding chapter) to include natural capital, contributions of the natural environment such as soils, unpolluted water, and clean air to an inclusive measure of welfare. This in turn leads to the concept of sustainability or sustainable development, first defined in a 1987 report as development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The main thrust of this part of the chapter is to translate this statement into a form suitable for rigorous analysis and ultimately for measurement. This is accomplished first with an intuitive model and then in a more formal one, with much the same results. A very preliminary attempt in the literature at measurement of the sustainability of a number of national economies is reported.