Natural Resources

In 1980, environmentalist Paul Ehrlich and economist Julian Simon made a famous bet. Ehrlich wagered that five natural resources (he chose five metals) would be more expensive in ten years based on the uncontrolled population growth and the resultant shortages of food and all natural resources that he anticipated. Ehrlich lost the bet, because by 1990 each of his chosen resources had actually declined in price by an average of 40 percent. In fact, we have seen already in some detail that for food of all kinds the same upward (not downward) trends have occurred, and the same can be said for the majority of other natural resources.

It might seem illogical that we are not running out of resources, because it is true that such resources are limited and our consumption has not decreased. But in fact, conservation, recycling, and new technological innovations that use fewer scarce materials and find and extract rare materials more efficiently have made this seemingly contradictory reality possible. Figure 6-10 shows the trend for metal production in the world. The trend is representative of most natural resources. Although there were periodic dips in output, the general trend over the past thirty years is upward, with a total increase of about 50 percent.

The big exception to the good news on natural resources is petroleum. We are running out of oil, and there has been much discussion about the

Figure 6-10. World metal production.

600 -550 500

1965 1970 1975 1980 1985 1990 1995 2000 2005


Data from the World Resources Institute's EarthTrends website (

meaning of the oil peak and what will happen once we pass the point where the amount of remaining oil is no longer sufficient to meet our immense energy needs. I have already discussed the tremendous boom in alternative energy that has transpired in the past decade. Whether we will be able to replace oil with other methods of producing energy before another even greater energy crisis hits us (as the oil runs out) is far beyond my ability to predict. But so far, real shortages of natural resources (other than artificial ones caused by war or political strife) have not been an important factor in modern life.

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