The Evolution of Economic Views on Natural Resource Scarcity

Abstract

Since the 1950s, as environmental challenges have evolved, so too have economic views on natural resource scarcity. This article discusses three distinct phases in this evolution. From the 1950s to the 1970s, the “resource depletion era,” the environment was viewed mainly as a source of key natural resources and a sink for waste, and thus the focus of economics was on whether there are physical “limits” on the availability of resources as economies expand and populations grow. From the 1970s to the end of the twentieth century, the “environmental public goods era,” attention shifted to the state of the environment and processes of environmental degradation, such as climate change, deforestation, watershed degradation, desertification, and acid rain, that result in the loss of global and local environmental public goods and their important nonmarket values. From 2000 to the present, the “ecological scarcity era,” there has been growing concern about the state of the world’s ecosystems and earth system processes, and thus the focus has shifted back to possible limits to economic and population expansion, although the emphasis now is on potential “planetary boundary” constraints on human activity.