If you watch the news or listen to the radio, you are constantly reminded of the limited natural resources that we have at our disposal.
In fact, they are saying that it won’t be long before we run out of water, copper, trees, topsoil, fertilizer, and more. You name the resource and someone is saying we will soon run out.
The rapid pace of development and urbanization is no doubt putting a strain on our natural resources, and the rising population is making it even harder to sustain our production levels in the short run.
But is it really true that resources are limited?
Not in an economic sense. In fact, resources are actually unlimited – to a large extent – because of the role that knowledge plays in their utilization.
In the book, Super Abundance by Marion Tupy and Gayle L. Pooley, they talk about how there are relatively fixed numbers of ‘atoms’ on the earth but combinations of atoms are not resources by themselves, unless they are combined with knowledge.
It doesn’t actually become a resource until we know how to extract it and transform it into something that adds value. And that doesn’t happen without combining the “atoms” with “know-how” (knowledge), also known as technology.
Why are Natural Resources Limited?
Natural Resources are physically limited in quantity.
Obviously, there is a fixed amount of atoms on the earth. It hasn’t changed much for millions of years. There have been some additions from asteroids and space dust and some subtractions by launching satellites and a Tesla Roadster into space. But by and large, the amount of atoms is fixed and thereby limited in supply.
Atoms make up elements that are useful like gold, copper, iron, lithium, and water.
We don’t really need random “atoms” or elements, but if we discover how to use them to make something useful then they become a resource.
For instance, trees are a valuable natural resource because they provide us with timber and other materials that are used to build homes, furniture, and various other products. But without knowledge of how to harvest the wood, how to cut and shape it, and how to preserve it, trees would be useless to us.
Of course, trees have valuable functions outside of the timber industry. Trees clean our air and provide us with oxygen and also can improve our health and well-being just by being exposed to them.
But they didn’t have any economic value until we figured out we could make things out of them or burn them for heat and energy.
The same applies to all other resources.
Elements like iron, copper, and gold are essential for modern life, but they need to be extracted, refined, and transformed into usable products through various manufacturing processes. If we don’t have the knowledge and skills required to do this, then these “resources” are of no value to us.
In fact, for tens of thousands of years these “resources” have been sitting there for humans to use but until we learned how to use them they were invisible to us. They were just rocks, or dirt under our feet.
The good news is that knowledge is unlimited.
There is no limit to the amount of knowledge that we can acquire. We can continue to learn and improve our skills, and this will enable us to use resources in more efficient and innovative ways. We are constantly discovering new ways to use resources, and this is making them more abundant rather than scarce.
The definition of productivity is doing more with less. So if we are making productivity gains it means we are getting more output with less resource inputs. This is another way that we can increase our prosperity without increasing our resource usage in a linear way.
And as a resource becomes more scarce it goes up in price because the supply is lower relative to demand. This increase in price signals to the market that there is an economic profit (higher than usual ROI) to be made and as a result, there should be more activity in prospecting for new deposits, and improved methods of extraction and recycling. And as the price increases some mines that were more difficult to extract the resource and previously unprofitable may now be profitable at the new higher price. This causes the supply to increase and the price to fall back down over time.
But the increased price also leads to the search for alternatives. Resources are not usually intrinsically valuable but rather it is valuable because of what it does for us. Copper is valuable because it can transmit electricity and data (the internet) over long distances. But once a substitute is found to be better for this purpose like glass (fiber optic internet) then the demand for copper falls correspondingly.
When will natural resources run out?
It is possible to use up a natural resource like oil, copper, or lithium. But if the resource is tied to an open market the price signals will reflect its relative scarcity and move the economy in a direction that will either find a substitute or discover new deposits or a better extraction process.
And when you define a resource as a combination of Atoms and Knowledge then Resources are technically almost unlimited.
RESOURCE = ATOMS x KNOWLEDGE
Atoms are finite but knowledge is theoretically infinite.
So maybe resources are not as limited as we thought. But what about the Earth’s Carrying Capacity?
We have caused a lot of problems with particulate matter pollution (which causes human illness) and carbon emissions (climate change) because we have been burning coal and oil for energy.
But now we are combining atoms with the knowledge to substitute dirty energy sources with clean sources of energy.
For example, we’re now using renewable energy sources such as solar and wind energy to power our homes and industries. This has enabled us to reduce our reliance on finite resources like coal and oil and has helped to create a more sustainable future.
And as the demand for renewable energy goes up it has put pressure on the supply of lithium which naturally increased in price accordingly. Lithium has come under criticism for having a dirty extraction process and for having a sunk carbon cost of several years for a lithium-ion car battery.
But as the price increases, research into substitutes has intensified and now there are sodium-ion batteries, graphene batteries, crab shell batteries, dung batteries, and more under development.
And as we continue to research and develop new technologies, we will be able to make even better use of resources that were previously considered useless.
One more point to add is that our Solar System has more resources than we could ever need and once we gain the knowledge to go to the asteroid belt and bring back valuable elements then we can’t possibly run out of resources.
So, let’s not give up hope just yet!
Let’s continue to invest in knowledge and education and work towards a more sustainable future for ourselves and the planet.
Thanks to the infinite progression of knowledge, resources really are unlimited.
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