Wednesday, July 7, 2010

peak everything?

The title of Ronald Bailey's piece in Reason. The premise is a take-off on the concerns about "peak oil"...

When you really need something, it's natural to worry about running out of it. Peak oil has been a global preoccupation since the 1970s...

But maybe they're going about it all wrong, looking for solutions in the wrong places. Economists Lucas Bretschger and Sjak Smulders argue that the decisive question isn't to focus directly on preserving the resources we already have. Instead, they ask: β€œIs it realistic to predict that knowledge accumulation is so powerful as to outweigh the physical limits of physical capital services and the limited substitution possibilities for natural resources?” In other words, can increasing scientific knowledge and technological innovation overcome any limitations to economic growth posed by the depletion of non-renewable resources?

The debate over peak oil is heavily politicized, so let's set it aside and test the idea of imminent resource peaks and their consequences for economic growth on three other non-renewable resources: lithium, neodymium, and phosphorus....

Bailey runs with those three resources, before concluding with this:

Stanford University economist Paul Romer has observed, "Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered. The difficulty is the same one we have with compounding: possibilities do not merely add up; they multiply.” The above examples show that while the production of physical supplies of resources may peak, there is no sign that human creativity is about to peak.


At July 7, 2010 at 10:03 AM , Blogger William Lang said...

One of my favorite cliches is that the Stone Age didn't end because they ran out of stones. There are serious resource supply problems, but energy is ultimately not going to be a problem: there is enough uranium on hand (in the form of nuclear waste and depleted uranium from the cold war) to power the US for 1000 years, if we build fourth generation nuclear plants capable of burning U238 as fuel. An even better alternative might be thorium as a nuclear fuel; it is abundant and has several other advantages to uranium.


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