Introduction: Definitions

What is a natural resource? People have a lot of definitions for this word, including clean air, nice scenery, biodiversity. Though these are all in some sense resources, in a classical economic sense the resources that matter are those that are direct inputs into the economy, the raw materials of industrial production.


A mine entrance in Chile.
Renewable natural resources are those that can regenerate themselves within human timeframes, such as fish or trees. In Figure A below, the evolution is shown of the population (N) of a canonincal renewable resource with time. Above a certain minimum population, the population rises exponentially until the carrying capacity of the environment is reached at NMAX. Below the minimum population NMIN, the fish (or whatever) cannot find each other to mate, or the population is otherwise spread too thin to survive. Above NMAX, the environment becomes overcrowded and populaiton growth is negative.

A. B.
Figure 3: Stock and harvest rate curves for renewable resources.

This imples a certain maximum sustainable catch as the population growth rate (R) has a maximum between NMAX and NMIN. Figure 3 above also illustrates the negative growth rates for underpopulation and overpopulation.

Negative growth rates for underpopulation imply that a species can be doomed long before the last one is dead. This is thought to be the case or nearly the case with a great many species today, even some commercially useful ones such as certain species of whale. This shows that a "renewable" resource may not be renewable, if the species becomes extinct. Nonbiological renewable resources, including solar and hydroelectric power of course do not have these restrictions.

Exhaustible natural resources are those that do not regenerate (such as oil or iron ore). Though the geologic processes that created most types of nonrenewable resources in the past are still operating today, the time frames are too long compared with their use to be considered renewable.

Scarcity is what makes the difference beween an ore body and a rock. One might think that the usefulness of a given commodity would govern its price -- this isn't necessarily so. As an example of this consider the diamond-water paradox. Diamonds are industrially useful, being pretty and good abrasives, but diamonds aren't nearly as useful to humans as water, which is after all a requirement for life. It's thus a paradox that diamonds are as expensive as, well, diamonds, while water is as cheap as, well, water. Air is even more necessary for life, and is even cheaper.

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