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Natural resource economics deals with the supply, demand, and allocation of the Earth's natural resources. This subfield of economics is therefore interested in the primary sector of the economy which engages in resource extraction (that is, the extraction of raw materials). One main objective of natural resource economics is to better understand the role of natural resources in the economy in order to develop more sustainable methods of managing those resources to ensure their availability to future generations.
Contents |
Areas of discussion
Natural resource economics is a transdisciplinary field of academic research within economics that aims to address the connections and interdependence between human economies and natural ecosystems. Its focus is how to operate an economy within the ecological constraints of earth's natural resources.1 Resource economics brings together and connects different disciplines within the natural and social sciences connected to broad areas of earth science, human economics, and natural ecosystems.2 Economic models must be adapted to accommodate the special features of natural resource inputs. The traditional curriculum of natural resource economics emphasized fisheries models, forestry models, and minerals extraction models (i.e. fish, trees, and ore). In recent years, however, other resources, notably air, water, the global climate, and "environmental resources" in general have become increasingly important to policy-making.
Academic and policy interest has now moved beyond simply the optimal commercial exploitation of the standard trio of resources to encompass management for other objectives. For example, natural resources more broadly defined have recreational, as well as commercial values. They may also contribute to overall social welfare levels, by their mere existence.
The economics and policy area focuses on the human aspects of environmental problems. Traditional areas of environmental and natural resource economics, include welfare theory, pollution control, resource extraction, and non-market valuation, and also resource exhaustibility,3 sustainability, environmental management, and environmental policy. Research topics could include the environmental impacts of agriculture, transportation and urbanization, land use in poor and industrialized countries, international trade and the environment, climate change, and methodological advances in non-market valuation, to name just a few.
Natural resource economics also relates to energy, and is a broad scientific subject area which includes topics related to supply and use of energy in societies. Thermoeconomists argue that economic systems always involve matter, energy, entropy, and information.4Thermoeconomics is based on the proposition that the role of energy in biological evolution should be defined and understood through the second law of thermodynamics but in terms of such economic criteria as productivity, efficiency, and especially the costs and benefits of the various mechanisms for capturing and utilizing available energy to build biomass and do work.56 As a result, Natural resource economics are often discussed in the field of ecological economics, which itself is related to the fields of sustainability and sustainable development.
Hotelling's rule is a 1931 economic model of non-renewable resource management by Harold Hotelling. It shows that efficient exploitation of a nonrenewable and nonaugmentable resource would, under otherwise stable economic conditions, lead to a depletion of the resource. The rule states that this would lead to a net price or "Hotelling rent" for it that rose annually at a rate equal to the rate of interest, reflecting the increasing scarcity of the resource.
The Hartwick's rule provides an important result about the sustainability of welfare in an economy that uses non-renewable resources.
- See also: World3, Low-carbon economy, and Hubbert's peak
See also
| Peak oil |
|---|
| Mitigation of peak oil |
| Predicting the timing of peak oil |
| Hubbert peak theory |
| Related articles |
- Industrial ecology
- Population dynamics
- Energy Accounting
- Ecodynamics
- Bioeconomics
- Econophysics
- Energy and Environment
- Thermoeconomics
- Ecological Economics
- Sustainable development
- Environmental economics
- Systems ecology
- Further information: Oil depletion
Sources, links and portals
There are three journals of energy economics:
There are several other journals that regularly publish papers on energy economics:
- Energy -- The International Journal
- Energy Policy
- International Journal of Global Energy Issues
- Journal of Regulatory Economics
- Utilities Policy
There is also a handbook in three volumes.
Much progress in energy economics has been made through the model comparison exercises of the (Stanford) Energy Modeling Forum and the meetings of the International Energy Workshop.
IDEAS/RePEc has a list of energy economists and a ranking of the same.
External links
- M. King Hubbert on the Nature of Growth. 1974
- Yuri Yegorov, article Econo-physics: A Perspective of Matching Two Sciences, Evol. Inst. Econ. Rev. 4(1): 143–170 (2007) _pdf (application/pdf Object)
- Borisas Cimbleris (1998): Economy and Thermodynamics
- Schwartzman, David. (2007). "The Limits to Entropy: the Continuing Misuse of Thermodynamics in Environmental and Marxist theory", In Press, Science & Society.
- Saslow, Wayne M. (1999). "An Economic Analogy to Thermodynamics" American Association of Physics Teachers.
- Soddy, Frederick - Encyclopedia of Earth
- Biophysical economics - Encyclopedia of Earth
- The International Society for Ecological Economics (ISEE) - http://www.ecoeco.org/
- The International Journal of Green Economics, http://www.inderscience.com/ijge
- The Green Economics Institute http://www.greeneconomics.org.uk
- Eco-Economy Indicators: http://www.earth-policy.org/Indicators/index.htm
- Ecological Economics Encyclopedia - http://www.ecoeco.org/education_encyclopedia.php
- The academic journal, Ecological Economics - http://www.elsevier.com/locate/ecolecon
References
- ^ Encyclopedia of Earth. Article Topic: ecological economics.
- ^ Wordnet Search: Earth science
- ^ Geoffrey Heal (2008). "exhaustible resources," The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
- ^ Baumgarter, Stefan. (2004). Thermodynamic Models, Modeling in Ecological Economics (Ch. 18)
- ^ Peter A. Corning 1 *, Stephen J. Kline. (2000). Thermodynamics, information and life revisited, Part II: Thermoeconomics and Control information Systems Research and Behavioral Science, Apr. 07, Volume 15, Issue 6 , Pages 453 – 482
- ^ Corning, P. (2002). “Thermoeconomics – Beyond the Second Law” – source: www.complexsystems.org