Introduction

Abstract

Natural resources are vital for the production of output. Economic activity is dependent on resources, i.e. land to grow food, raw materials to make goods, and energy to power machines. For example, according to the World Resource Institute (2010) about 37% of the world’s land is used for agriculture and according to BP (2014) about 91 million barrels (bbls) of oil are consumed every day. Oil plays a vital role in many aspects of daily life. Its components are used to produce almost all chemical products, such as plastic, detergent, paint, and even medicine. Its most apparent use is as a fuel for cars and airplanes. Natural resources are not created through a deliberate investment but rather exist irrespective of human activity. The opposite is true for physical and human capital.