Chapter 11 Market Failures and Abiotic Resources. Geog 3890: ecological economics. How do markets perform with these abiotic goods and services?. Fossil Fuels (nonrenewable stock) Minerals (partially recyclable, nonrenewable stock)
Geog 3890: ecological economics
curve like the
one at right.
Why does this
Curve not work?
Standard Economic analysis of Fossil Fuels is inadequate. It looks only at NPV for the existing human generation, ignoring any ethical obligations to leave some for future generations, that is:
It focuses on efficiency while ignoring scale and distribution.
Neither producers nor consumers pay marginal external costs
Empirical evidence contradicts the conventional theory
(Fig 11.4 shows oil prices flat)
Cool web site on Mineral and Energy Resources
Changing elasticity of demand