Economics and the Environment, 10th Edition

10Natural Resources and Ecosystem Services

10.1 Introduction

You may be reading this book from the comfort of your apartment, or perhaps in a coffee shop, library, or office. Wherever you are, surrounded by human‐made things, it is easy to think that we are not dependent on natural capital. But think more deeply. Your chair is made of wood or metal and covered with cloth or leather. Your building is heated or air‐conditioned by the combustion of fossil fuels; or nuclear power, which uses uranium as a fuel source; or renewable energy such as wind or solar power. You likely drove to your current location in a car or bus, assembled from various metals, rubber, and plastic made from oil or other hydrocarbons. The cell phone that you carry around contains small amounts of beryllium, cadmium, cobalt, copper, lead, mercury, nickel, palladium, silver, and zinc. Although many economics textbooks depict production as being dependent on capital, by which it is usually meant manufactured capital (industrial plant and equipment), and labor, we are, in fact, utterly and totally dependent on natural resources.

The previous two chapters have focused on sustainability. As we have seen, an important determinant of whether society is achieving sustainability is whether we are leaving the next generation with suitable capital stocks, including stocks of natural resources. (Note: by stocks, in this chapter, we mean physical stocks of resources—trees, minerals in the ground, and fish in the ocean—not ...