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This chapter presents an overview of the chapters (Chapters 14-16) in Part III of the book. This part of the book focuses on the high demand for renewable and non-renewable resources arising from global economic growth.

This concluding chapter presents a synthesis of discussions in the preceding chapters. The first part of the book analyzed in a small-scale model the interrelation between economic growth, the environment, and welfare of a country. The second part of the book studied the interaction of growth and global warming. The third part was concerned with economic growth and renewable and nonrenewable resources as well as with policies to prevent overextraction of those resources.

Systemic climate change risk is not taken into account by Hotelling rents, which traditionally price the scarcity of natural resources, thereby compelling economic agents to constantly push back the wall of scarcity. In concrete terms, this means that economic decisions do not at present incorporate the value associated with the climate’s regulatory function.

This chapter considers whether sustained economic growth is feasible when an exhaustible and non-renewable resource is used in production. Examples of exhaustible natural resources are fossil fuels such as oil, coal, and natural gas, as well as minerals like iron, copper, and aluminium. The main question is whether it is possible to maintain a non-declining per capita income when a natural resource is an important factor in production. In this chapter, the natural resource causes diminishing returns to capital and labour, and its use will decline over time. To compensate for this decline, the technological progress connected to energy must be stronger than the technological progress associated with land. This necessitates further diversion of labour away from production and from labour-augmenting research. The chapter also discusses an alternative possibility for achieving sustainable development: to (gradually) replace the exhaustible energy with renewable energy.

The green paradox arises from the reaction of non-renewable-resource suppliers in anticipation of future price changes. Yet there exists no formal treatment of non-renewable resource supply, systematically deriving quantity as function of price. Assuming a simple two-date setting, this chapter establishes instantaneous restricted (fixed reserves) and unrestricted resource supply functions and studies their basic properties. Supply at one date depends on the price at the other date. The effect of a price change can be decomposed into an intertemporal substitution effect and a stock compensation effect. Unlike the Slutsky decomposition of demand, the substitution effect always dominates so that a price increase at one date causes supply to decrease at the other date. The analysis can be used to explain policy-induced extraction changes like the green paradox by the method of partial equilibrium where supply intersects with demand.

This chapter analyzes the Extractive Industries Transparency Initiative (EITI) as a global governance tool to curb adverse effects of non-renewable natural resource extraction and commodification, and its interlocking challenges for environment, security, and justice. EITI’s premise that transparency in state resource revenues will foster broader societal transformations so far seems illusory. EITI lacks sanctioning mechanisms vis-à-vis participating companies that hinder full transparency, for example by evading the payment of taxes through tax loopholes. Such problems cannot be solved by resource-rich countries alone, but require political intervention by states that host global financial hubs as well as the most powerful multinational resource extraction companies. Going forward, an “EITI Plus” should also include environmental sustainability standards, so it may strengthen, not contradict broader global agreements such as the UN’s Agenda 2030 for sustainable development and the Paris Climate Accord.

Examines anxieties over the rapid expansion of fossil fuel use in American industry from the 1870s to 1908. Treats in turn coal, oil and gas waste, and emphasises the links that geopolitical theorists, politicians, and technical experts drew between energy use and growing American global power. The rise of intergenerational equity as a concept and its causes are considered as bound closely to fossil fuel and other mineral supply issues. Speculation over the impacts of fossil fuels on the cost of living, class relations, and the aesthetics of landscape are detailed in turn, along with brief discussion of renewable energy alternatives. An incipient debate about global climate change began but, for the most part, did not reach the level of government policy and was diluted in its impact partly by technological optimism, and by belief that administrative-driven deferral of unnecessary resource use could forestall potentially dire consequences.

The focus of the green paradox literature has been either on demand-side climate policies or on effects of technological changes. The present chapter addresses the question of whether there also might be some kind of green paradox related to supply-side climate policies. Fossil fuels are non-renewable resources, and the term supply-side climate policy is used for policies that permanently remove some of the carbon resources. The main conclusion of the chapter is that there will no green paradox if supply-side climate policies are aimed at removing high-cost carbon reserves. If instead low-cost reserves are removed, the possibility that both early and total emissions increase cannot be ruled out. Hence, "wrong" supply-side climate policies may give a supply-side green paradox, since such policies may accelerate climate change.