TCS Daily

Is the World Using Up Its Resources?

By Rand Simberg - April 7, 2005 12:00 AM

There was a recent story in The Guardian about a new United Nations study, with the misleading headline, Two-Thirds of World's Resources "Used Up". It's not the first time we've seen such hysteria, and it certainly won't be the last. But relax -- the sky isn't falling. The headline is nonsensical, because it falsely implies that "resources" are a static quantity, and non-renewable. As an example, they often cite Easter Island, whose civilization supposedly failed due to running out of them.

For example, many think of petroleum as being a "non-renewable" resource. But in fact, though it's not (currently) being renewed, it is renewable. From the standpoint of fungible commodities (as opposed to art, or unique species) there is not really any such thing as a non-renewable resource.


If energy were sufficiently cheap (say, via fusion power, or advanced solar), we could pull carbon and oxygen and hydrogen out of the air (and add in the other trace elements, such as sulphur) and make crude oil, and pump it back into the ground. That wouldn't necessarily be a sensible thing to do, but it could be done. Thus, the distinction between a "renewable" resource and a "non-renewable resource is somewhat arbitrary. For instance, most people consider solar energy to be renewable, but the sun will, after all, burn out one day. Better hurry up and use it while we still can!


As the old joke goes about the woman who will consent to intimate relations with a guy in the bar for a million dollars, but not for ten, we've already established what she is -- now we're just haggling over the price. Similarly, all resources are renewable, at some cost. The issue is what the most practical use for any given resource is at any given point in time -- to renew other resources with it, or to increase individual and national wealth with it, to enable us to make more resources more affordably renewable in the future?


Resources in Space


As an example (space related, since I tend to get paid to think about such things), there has been some discussion as to the best use of lunar ice at the poles, should it be discovered in useful quantities. Some say that it should be used as propellant to reduce the cost of cis-lunar operations. But others object to that, claiming that such a use is non-renewable, since the exhaust would be simply vaporized out into the vacuum and impossible to recapture. Better, they say, to use it for life support at a lunar base, in which case it can be recycled.


But suppose that by using it as propellant to cheaply launch a mission to a comet, and bring it back to use in lunar orbit, the ice could be leveraged to generate much more ice in the future? Wouldn't that be simply a different way of "renewing" the resource? And how would such a decision be made?


Well, if the decision were made by NASA, for a NASA lunar base (no doubt influenced by public hearings and the bleating of environmentalists), someone would make a command decision, and it would likely be as economically senseless a decision as many of NASA's have been, since economics are rarely the basis of their decisions.


But a much better way would be by simply auctioning it. If the expected value of it as a future revenue stream from cometary ice was higher than the current value of it for water and oxygen, then the comet miners would outbid the breathers and drinkers, and the latter would either go back home to earth, where the water was cheaper, or continue to pay for the costs of shipping it up. But the future cost of water on the moon, as a result of a rational economic decision today, would be much reduced.


Global Warming


And that's what the argument over global warming is ultimately all about -- economics. When I say the sky isn't falling, it's not to say that we shouldn't be concerned, and that we shouldn't at least attempt to recognize whether or not we're a frog being slowly boiled. What I do say is that we have some attributes (foresight being one of them) that (for example) the Easter Islanders didn't have, and that they've stood us in good stead for the past couple hundred years.


The environment in the industrialized world, and particularly the US, today is in fact cleaner, our health better, our lifespans longer, our forests larger, than was the case during colonial times. That things are in bad shape in much of the rest of the world is a consequence mostly of awful government, not any intrinsic resource issue per se. The largest environmental disasters have been in countries in which unaccountable dictators made decisions about the allocation of resources (e.g., Saddam draining the marshes, the denuding of Haiti's forests, the vast environmental messes of the former Soviet Union, etc.) Similarly, it is command economies that waste and destroy resources. For instance, the Soviet Union actually subtracted value, as absurdly demonstrated by the fact that it was generally cheaper for Soviet farmers to feed their hogs with processed bread than with the grain from which it was made. Wealth, property rights and freedom are the best solution to concerns of resource utilization (and renewal).


The Only Hope


The only hope for the planet is to get more of it to operate on the principles of the market, and individual choice. There are two competing approaches. The first is responding hysterically to problems that won't occur for many decades (Kyoto being a prime example) which will reduce current wealth to the point that if and when those problems actually occur, we won't have the financial wherewithal to be able to deal with them. The second is to use those resources wisely, per their most productive uses (i.e., responding to market pricing) to create the wealth necessary to create new resources.


There are many things wrong with our current approach to such things (e.g., the fishery problem), but the nostrums proposed by most "environmentalists" (who tend to be socialists and command economists in green clothing, even if many don't recognize that) would make things worse, not better. Headlines like that in the Guardian article, implying that resources are a static quantity, of which we've already used two thirds, are just the kinds of misinformation that lead to flawed policy decisions, and reduction of wealth, and ultimately reductions of "resources."


Even worse, it misleads many into supporting what has become a key (and mistaken) goal of the so-called "environmental movement" -- to limit human population, because this is perceived to be necessary in order to conserve those "limited resources." But to do so is to limit the quantity of human ingenuity itself. And that, as the late Julian Simon pointed out, is the ultimate resource, for which there remains plenty of room on our home planet, and beyond it as well, as long as we continue to renew and make the best use of it.


Rand Simberg is a consultant and entrepreneur in commercial space, space tourism, and internet security. He publishes a weblog, Transterrestrial Musings.


TCS Daily Archives