Transcript renewable resource - Green Resistance

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
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
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
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Cute (“toe-may-toe”)
7-2
Readings…
Ecological
Economics:
Principles and
Applications
Chapters 3 – 5
See link on
website
Will print it for
you too
7-3
Readings:
Chapter 7
The Allocation
of Depletable
and Renewable
Resources:
An Overview
The nature of resources and the
resources of nature

Stock-flow resources: materially transformed into
what it produces
• A stock can provide a flow of material
• The flow can be of virtually any magnitude; stock
can be used up at almost any rate desired
• A flow can be stockpiled
• Used up – not worn out
• Example? You tell me

Fund-service resources
7-5
The nature of resources and the
resources of nature

Fund-service resources
• Suffers wear and tear from production but does not
become a part of the thing produced
• Provides a service at a fixed rate
• Appropriate unit for measuring the service is
physical output per unit of time
• Cannot be stockpiled
• Are worn out; not used up
7-6
7-7
Think about it
• Think about a specific ecosystem
• Make a list of 3 stock-flow resources
provided by (or found in) that ecosystem
• Be very specific about the use of each
resource

Example: drinking water is a stock-flow; water for
swimming is a fund-service
7-8
Review: excludability and rivalness
• Excludability: a legal term

When enforced allows an owner to prevent others
from using his/her asset

In the absence of social institutions enforcing
ownership, nothing is excludable
• You tell me: what is an excludable resource? What
is a non-excludable, owned resource?
• Rivalness: an inherent characteristic of
certain resources whereby consumption or
use by one person reduces amount available
7-9
• All stock-flow resources are rival
• All nonrival goods are fund-service
• Some fund-service goods are rival

Example: bike: fund that provides the services of
transportation, but is rival

Example: ozone layer: fund that provides the
service of screening UV rays but is non-rival
7-10
7-11
8 types of goods and services, provided by
nature, divided into living and nonliving
1. Fossil fuels
2. Minerals
3. Water
4. Land
5. Solar energy
6. Renewable resources
7. Ecosystem services
8. Waste absorption
7-12
Nonrenewable resources
• Fossil fuels

Nonrenewable source of low-entropy energy

Very important as material building blocks
• Minerals

Fixed stocks ; in varying combinations and
degrees of purity

Raw material on which all economic activity and
life itself ultimately depends
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-13
Abiotic resources
• Nonrenewable resources +
• Water

Fixed stock ; fresh water: only a miniscule fraction is
freshwater

All life on Earth depends on water; human life depends on
freshwater
• Land

Physical structure; a substrate; or a site

Separate from the productivity of soil; distinct from land as
source of nutrients and minerals
• Solar energy

Ultimate source of low entropy upon which the entire system
depends
7-14
Biotic resources
• Renewable resources

Photosynthesizing biological resources and
others

Can be exploited to extinction
• Ecosystem services

When ecosystem functions are of use to humans
-> ecosystem services
• Waste absorption

A specific type of ecosystem service; economic
characteristic makes it worthy of separate
classification
7-15
Natural capital
• All the structures and systems that provide
these goods and services
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-16
A Resource Taxonomy – depletable
resources:
• A resource taxonomy is a classification system
used to distinguish various categories of resource
availability.

Current reserves are known resources that can
be extracted profitably at current prices.

Potential reserves resources potentially available.
They depend on people’s willingness to pay and
technology. (The higher the price, the larger the
potential reserves)

Resource endowment represents the natural
occurrence of resources in the earth. Upper limit
on the availability of terrestrial resources
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-17
A resource taxonomy: current reserves =
• Measured resources: material for which quality and
quantity estimates are within a margin of error of less
than 20% from geologically well-known sample sties
• + Indicated resources: material for which quantity
and quality have been estimated partly from sample
analyses and partly from reasonable geological
projections
• + inferred resources: material in identified but
unexplored deposits whose quantity and quality have
been estimated using geological projections
• Current reserves = measured resources + indicated
resources + inferred resources
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-18
Why is this distinction important?
• Common mistake #1  using data on current
reserves as if they represented the maximum
potential reserves
• Common mistake #2  assuming that the
entire resource endowment can be made
available as potential reserves at some price
that people are willing to pay
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-19
• A depletable resource is not naturally
replenished or is replenished at such a low
rate that it can be exhausted.

The depletion rate is affected by demand, and
thus by the price elasticity of demand, durability
and reusability.
• A recyclable resource has some mass that
can be recovered after use.

Copper is an example of a depletable, recyclable
resource.
• A renewable resource is one that is naturally
replenished.

Examples are water, fish, forests and solar
energy.
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-20
Some issues…
Some issues regarding depletable/ recyclable
resources…
• Possibility of economic replenishment (price
is a primary factor)
• Potential reserves can be exhausted
(importance of durable/reusable products)
• Storing opportunities
• Limits on recycling (natures of some
resources, entropy law)
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-21
Some issues regarding Renewable
Resources
• High rate of replenishment

Replenishment: restored to former level/condition
• Some renewable resources can be stored,
others cannot
• Managing renewable resources: maintaining
an efficient sustainable FLOW (while
managing depletable resources means
distributing resources among generations
while meeting the ultimate transition to
renewable resources)
7-22
• The management problem for depletable
resources is how to allocate dwindling stocks
among generations while transitioning to a
renewable alternative.
• The management problem for renewable
resources is in maintaining an efficient and
sustainable flow.
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-23
Abiotic resources
• Fossil fuels, minerals, water, land, solar
energy
• How do the laws of thermodynamics,
distinction between stock-flow and fundservice resources, and concept of
excludability and rivalness relate to these
resources?
• Why? To understand the role they play in the
ecological-economic system
Copyright © 2009 Pearson Addison-Wesley. All rights reserved.
7-24
• Fossil fuels and mineral resources frequently
grouped together but energy in fossil fuels can’t be
recycled, while mineral resources can be, at least
partially
• Water:

Fossil aquifers: similar to mineral resources. How?

Rivers, lakes, streams: more similar with biotic
resources. Renewable through hydrological cycle;
can have both stock-flow and fund-service properties
• Land (Ricardian land):

Can’t be produced or destroyed (except…?)
7-25
Fossil fuels
• Hydrocarbons
• 1995: supplied 38% of energy inputs into
global economy; coal: 25%; natural gas: 22%

85% of energy in economy: fossil hydrocarbons
• Fixed stock – in geological terms
• Recoverable supplies – our main concern
• What does recoverable mean?
7-26
Admin/ homework / exam
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
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
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
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EVSC 239: Reader 2
• Ecological economics

Chapters 407, 10-12, 20-23
• Environmental and resource economics

Chapters 14, 12, and 9
• The cost of environmental degradation

Chapter 6
Recoverable?
• Found in varying quality, at varying depths, varying
accessibility
• Different costs associated with extraction of different
deposits
• Recoverable supplies: those for which total extraction
costs are less than the sales revenues
• But: fossil fuel prices vary widely
• Recoverable supplies: a hydrocarbon is recoverable if
there is a net energy gain from extraction (less than a
barrel of oil to recover a barrel of oil)

Must include ALL energy costs

While technological change can reduce some of these,
irreducible limit to energy costs: 9.8 joules of energy to lift 1
kilogram 1 meter
7-29
Fossil fuel
• As we deplete most accessible first…will take
more energy to recover remaining supplies
• Energy return on investment: ratio of gross
fuel extracted to economic energy directly
and indirectly to deliver the fuel to society in
a useful tem

Declines over time

1950s in the US: every barrel of oil invested in
exploration led to 50

1999: ratio 1 to 5

By 2005: ratio: 1 to 1
7-30
More on fossil fuels
• What does it mean that fossil fuels are stock-flow resources?
Thus?
• Why are they nonrenewable but not exhaustible?
• Over time: quantitative and qualitative decline in stocks
• Rate of flow is largely determined by human efforts
• Thus If we had adequate infrastructure, we could theoretically extract
all entropically recoverable fossil energy stocks in a single year Or we
could make them last 1000 generations
• THUS: How long recoverable stocks will last is determined as much
by how fast we extract them as by how much there actually is
• Because. We almost certainly will never exhaust fossil fuel stocks in
physical terms. Why?
• Because there will always remain some stocks that too energy
intensive or too expensive to recover.
‘pink elephant’ re: fossil fuels
• Consequences of use
 Used fuel does not disappear. Nothing can.
 Acid rain. Global warming. Carbon monoxide.
Heat pollution. Oil spills.
 Issue of scale.
 “The sink will be full before the source is empty.”
 Plus… impact on ability of ecosystems to
capture solar energy; difficult to measure and so
much ignored
Know this equation
Net recoverable energy from oil =
(initial total stock of entropically recoverable
reserves) –
(energy cost of extraction) –
(loss of solar energy due to induced loss of
capacity to capture) –
(lost fund capacity)
Thus… fossil fuels are:
• Rival goods
• Finite
• Stock-flow resource
• Dependency on fossil fuels
Mineral Resources
• As with fossil fuels:





total stock is finite;
occurring in varying degrees of purity;
uncertain of total stock of any particular mineral;
energy required to obtain resource;
consequences (damage in extraction; waste)
• Unlike fossil fuels:
 can be recycled (naturally, this requires energy)
 Aboveground stock = minerals in use + those that can
be recycled
Mineral resources: waste
1. Products that have stopped working
•
Not recycled (now). Why?
2. Mechanical or chemical erosion of the
material in question
•
Virtually no control here
As with oil: the threat to us is probably more
from the impacts of the waste itself than
from the exhaustion of mineral resources.
Thus… mineral resources :
• ‘Rival goods within a generation, but as partially
nonrival between generations – depending on
how much is wasted and how much recycled’

Since the use by one generation does not leave
less of the resource for future generations
• Stocks are finite; extracted at any rate we
choose; waste can be minimized
• Survival dependency
• Substitutes for specific minerals developed
Water
• Stock is finite
• Stock-flow resource for drinking, irrigation,
industry, and waste disposal
• Both renewable and nonrenewable
 Many water resources are renewable (hydrological cycle)
 Many aquifers are ‘fossil’ water – negligible recharge rates
• Can be both: stock-flow and fund-service
resource simultaneously. How?
• But: we cannot positively influence the flow
• No substitute
• Rival and nonrival, depending;
intergenerationally nonrival; varying
excludability (rainfall?)
Ricardian Land
• (land as a physical substrate and location,
distinct from its other productive qualities)
• Services excludable;
• Rival at any given point
• Intergenerationally nonrival
• Nondepletable … though dynamic now
Solar Energy
• = to 19 trillion tons of oil (toe)/ year
• Difficult to capture and concentrate
• Most: reflected back (fortunately)
• Global energy consumption: 9 billion toe
• Forms of solar energy: biomass, wind, hydroelectricity,
photovoltaics, wave/ocean thermal energy; (photosynthesis)
• Energy investments needed to produce
infrastructure to capture solar energy
• Decrease plant surface area
• Fund-service resource
Essence…
• We have control over the rate at which we use fossil fuels,
mineral resources and water
• Greater flows from finite stocks being demanded with physical
growth of economy
• Finite stock imposes (unapparent) limits on total economic
production over time
• Funds: provide services at a fixed rate over which we have no
control -> limit size of economy at any given time, but do not
limit total production over time
• Substitutability: relevant to scale
• Rivalness: relevant to distribution (within and between
generations)
• Excludability: primarily relevant to allocation