Theoretical Modeling Of Resource Depletion

This paper uses the terms natural resource(s), resource(s), and reserve(s) in many different contexts. Please use care when interpreting their usage and context.

When dealing with resources, it’s crucial to an economy that those resources are allocated to avoid any scarcities and rapid depletion. That why laws and regulations are implanted in our economic system to monitor the allocation of resources. In the United States, we run a market system, and the market system provides both pros and cons. One positive thing a market system provides it the freedom of business and freedom of capitalism. Any person can earn as much as they want and grow their business as large as they wish. Also, the market system benefits the production of resources, and allows for sufficient goods to circulate the economy. Producers are in competition with one another constantly, aiding the development and innovation of production

In the past, the economic school of thought regarded the resources as unlimited and focused on more production under the light of the unlimited growth assumption. Every economic action was suggested to only consider about making more profit. While the economy and the human population are growing; more natural resources are used and more pollution is observed. Human become to deal with the results of its production such as environmental problems and resource scarcity. A debate has emerged in economics and the mainstream economics is brought into question since its unlimited growth assumption is collapsed. Ecological economists argue the neoclassical welfare economics for ignoring the environmental and ethic values by only focusing on the cost-benefit analysis. It also claims that the neoclassical economics fails to calculate the value of the environmental capital and the loss of the economic activities on the environment. This paper is going to explain the problems with the neoclassical welfare economics and the alternatives offered by the ecological economics in terms of economic growth and environment.

The curve for production possibilities indicate that outcomes or else combinations of the productions that can be produced at levels which are available in terms of the resources. When any study in pursued on the manner in which countries can increase or improve the relative wealth in a manner that is optimally possible, it needs to be pursued with consideration to behaviours relating production. In consideration to purposes relating production, every nation has to utilize the available resources that comprise land, raw materials, labour, capital, etc. The curve for production possibilities indicate the various combination concerning production that can be pursued with the levels of resources available (Gillman, 2011; Burda & Wyplosz, 2012; Gandolfo, 2013;

Economic growth is supposed to distribute the prosperity to all people across a country. The higher economic growth means more income to pursue a better life. Economic growth is the precondition for improving the development. No sustained economic development can occur without economic growth (Perkins et al. 2012, p 14). As a result, maintaining the sustainability of growth is crucial to sustain economic development, for example improvements in health, education, and other aspects of human welfare. However, creating the sustainable economic growth is a challenge for a natural resource dependent nation. This is because a resource curse term points out to a country that relies on natural resources faces sluggish economic growth (Sachs & Warner, 2001). The resource curse also refers to a negative correlation between development of a country and its natural resources abundance. Thus, it is hard to improve the economic development when the countries experience the natural resource curse.

Water is a non-renewable resource that is being threatened by America’s exponential population growth and increasing water consumption per capita. The future is tiptoeing its way forward, and until the magnitude of this reality is acknowledged, the U.S. will fail to prepare for a potential loss of resources. America’s population growth, especially paired with its decreasing water supply, will lead to a synthesis of issues threatening America’s industries, living conditions, overall health, environment, and economy.

-> a relationship between supply price (minimum income necessary to justify investment) and prospective yield

Because of the equal growth rates and the continuously growing population, poorer countries may not be able to sustain their people with their limited amounts of resources. Wenner explains, “Undeveloped countries with large populations also put a strain on the local environment and the limited resources that they have” (Wenner 2). Because there are so many people to sustain in larger populations eventually, the resources in that area will run out or become extremely difficult to find. Once these resources become too difficult to gather, more power and energy will be needed in order to extract those same resources. Alcoforado states, “In the last 45 years, the demand for earth’s natural resources has doubled due to rising living standards in rich and emerging countries and increasing world population” (Alcoforado 1). With the rise in population in the last 45 years, Wenner’s beliefs are found to be true. With a

If a person receives a loan they are obligated to pay it back and in order to do this they need to use resources to keep up with interest rates. To keep up with the interest rates issued by the banks there has to be expansion. Expansion means more resources. When the possibility of becoming broke hangs above someones head they tend to forget about their morals. This is a huge problem for natural resources because they do not care about things like the rainforest as long as they can make a profit. But we have created an economic system that encourages shortsighted behavior- behavior that is so shortsighted that the costs of the breakdown in rust are never take into account” (Stiglitz 289). When the vision of an economy is only short sighted people are not going to care about what happens to all the resources being used up or the current environmental issues. Nobody wants to go bankrupt and they are always going to desire more and the only way they can do

The implications of the Rebound Effect on resource efficiency strategies implies that, if rebounds associated with energy savings are significant, then efficiency measures will have far less effect in reducing the rate of resource production, consumption and the increasing environmental impacts.

The resources curse is also known as the “paradox of plenty”. The countries with an abundant of natural resources tend to have less economic growth as compared to those having fewer or none natural resources. But

The Solow growth model try to explain the effect mechanisms of population, technology, investment in economic growth under the optimal allocation of resources. Solow model emphasizes the scarcity of resources, the limits to growth of pure physical capital accumulation. This production function and the savings rate remains unchanged, the population growth rate unchanged, the assumption of constant technological progress combine to form a complete dynamic general equilibrium model(Stein,2007).

In addition to the capacities of setting up development plans, the successful development in resource-based economy depends on their ability to save all or part of the revenues from the extractive industries (Lewin, 2011). Since the non-renewable resources are destined to be depleted in the future, the mineral-wealth is limited, and it means the state should save the revenues as much as possible to prepare for the future depletion (Lange and Wright, 2002). Moreover, the natural resources tend to have volatile prices, so the countries need to stabilize the income, for

There are two concepts of explaining the inside issue of the energy price crisis, profiteering and refining capacity. Profiteering is a term used to describe oil

During the past decades different mathematical models for energy resources allocation and environmental planning have been developed and studied for both quantitative and qualitative criteria. Policymakers deal with energy-related issues and how they interact or affect economic growth and environmental quality. There are some factors in resources and environmental systems that need to be considered by planners and decision-makers such as legislation,