Replacement of Techniques over Time

Abstract

In the preceding Chapter we described the structure of the resource model and found that there were two techniques with which consumption goods can be produced. Technique T₁ consisted of one single production process R₁ only. This process was assumed to produce consumption goods without any nonrenewable resources having to be extracted. With the set of techniques {T₂(κ, 0 ≦ κ ≦ 1} the consumption good can only be produced, however, if resources have already been extracted from the environmental sector. It consists of production processes R₂, R₃, and of the set of processes R₅(κ) 0 ≦ κ ≦ 1.¹ R₂ serves exclusively the production of consumption goods — as did process R₁. It requires the use of a capital good, however, which must first be produced in process R₃. This in turn requires scarce resources, which have to be extracted from the environment with one of the processes of {R₅}, depending on the resource concentration. In the context of this resource model, a change from technique T₁ to technique T₂ implies a transition to a production technology which uses non-renewable resources.