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Resource Economics

  1. Economic Basics
    1. we cannot produce an infinite amount of everything; in general, the more we produce of one thing the less we can produce of another
  2. Market Forces
    1. it is almost a cliche that the free market rules through the effects of supply and demand
    2. the same curves can be drawn for things like pollution control (though the they the supply curve in particular is generally not linear)
    3. technology and population growth affect the curves
    4. incidentally, for production which is human resource intensive (things like health care, education, the arts), the progress of technology does not lower the supply curve
    5. diminishing returns or economics of scale?
    6. scarcity promotes development
    7. external and internal costs
    8. cost benefit analysis
  3. Classes of resources
    1. a resource is anything which is needed by an individual or society
    2. Nonrenewable or exhaustible resources: resources that are used up as they are used; typically fossil fuels and minerals=> no additional amounts of these things will be added to the earth system during the practical time-scale of human civilization

      versus

      Renewable resources: resources that are renewed by growth or reproduction=> in theory, with proper management, these resources can be continued indefinitely

      If Malthus pointed out the limits of natural resources, John Stuart Mill pointed out the value of Intangible Resources:

  4. Sustainable Development
    1. the natural economy of a climax community can persist for millenia; the stability arises from four general principles:
      1. stable ecosystems recycle matter
      2. stable ecosystems use sunlight as their energy source
      3. stable ecosystems maintain consumer population at a level that does not result in fatal overgrazing
      4. stable ecosystems maintain biodiversity
    2. when the west was wild, economic growth was brought about by digging more and more out of the ground faster and faster
    3. now that the hole is almost empty (and the dump is full!) we need to dig less and less out of the ground and do it more and more cleverly
    4. strategies to help promote sustainable development:
    5. Help the poor (redistribute the wealth).

      Recycle.

      Consider the locals.

      Devise new management and regulatory schemes so that it pays to manage resources with an eye on the horizon.

      Include external costs (including depletion).

      Build valuable things that donít consume much.


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ANTHONY G BENOIT
ROOM 201B
(860) 885-2386

abenoit@trcc.commnet.edu