After studying this chapter you will be able to understand: Explain why falling birthrates mean that we are not likely to run out of natural resources, describe why using a mix of energy sources is efficient, even if some of them are quite costly, discuss why running out of oil would not mean running out of energy, show how the profit motive can encourage resource conservation, relate how to use property rights to prevent deforestation and species extinction.
Trang 1Natural Resource and Energy
Economics
Trang 2• Population increased from 1 billion
people in 1800 to about 6.8 billion today
• Standard of living is 12 times higher
• Consumption of resources is much
higher
Trang 3• Thomas Malthus’s (1798)
predictions
• Replacement rate
• Total fertility
• Modernization
• Death rates fall
• Fertility rate falls below
replacement rate
Trang 4Resource Consumption Per Person
demand
person
risen faster than demand
are falling
Trang 5• Will resource supplies be
sustainable in the future?
• Prospects are hopeful
• Demand for resources will reach
a peak and decline with falling birthrates
• Resource consumption per capita leveled off or is
decreasing
Resource Consumption Per Person
Trang 6• Leveled off in the rich countries
• Demand will increase in poorer
countries
• Challenge is to move resource
supplies from their place of origin to places of need
Resource Consumption Per Person
Trang 7Resource Consumption Per Person
Trang 8Resource Consumption Per Person
Trang 9Resource Consumption Per Person
Trang 10• Achieve efficiency in
business conditions
with
• Variations in fixed
costs
• Daily variations in
demand
• Different types of
generation technology
U.S. Energy Generated
Coal, 4 8 3 0 % Nuclear, 1 9 2 0 %
Hydroelectric,
6 5 0 %
Petroleum,
1 1 0 % Natural gas,
2 1 4 0 %
Other, 0 6 0 % Renew ables,
2 9 0 %
Trang 11• Will run out of oil or cheap energy
• Lack of energy is not a concern
• Alternative sources
• Externalities
Trang 12• Policies for extracting resources to
maximize net benefits
• Present vs future consumption
• Present value
• Renewable resources
• Nonrenewable resources
Trang 13• Nonrenewable resources
• Oil, coal, and metals
• Extraction strategy to maximize stream of profits
• User cost
• Sell today, cannot sell in the future
• Higher expected demand encourages less extraction today
•
Trang 14• Optimal fisheries management
• Difficult to assign property rights
• Policies to limit catch sizes
• Total allowable catch
• Individual transfer quota