Renewable Resources: Phony Economics


“Renewable resources” are supposed to be superior to “non-renewable” resources because, well, they’re renewable!!!  Those who advocate renewable resources are responsible, care about the earth and care about leaving something to future generations.  Those who just use resources without regard to renewability, therefore, must not care- they want to party like it’s 1999, damn the consequences, the waste, and the future generations.    If this is a gross over-simplification, let me know.

I’m fed up with the notion that “renewable” = superior.  I’m fed up with the notion of “renewable.”  Resources are resources, and their value or usefulness exists in the minds of people who use the resources to fulfill their goals.  If there is less of a resource than people could make use of, it is an economic good and people will economize its use based on its cost.  Hence the only relevant indicator of superiority of a resource is it’s cost, not whether it’s “renewable.” 

Let’s take a quick example: the corn interests and (some?) greens push ethanol, because it’s renewable!!  Renewable means: we can always make more, as opposed to oil, which, they predict, will all be gone someday.  However, for the time being, we can make more oil as well, and it’s cheaper to make a gallon of gasoline or diesel than a gallon of corn alcohol, and you get more energy from it to boot!  So enough about the corn-hucksters’ claims of superiority.  The main issue for me and, I contend, most people, is cost, not some empty claim of “renewability” which amounts to moral posturing.  When the oil runs out, actually long before the oil runs out, it’s price will rise, and ethanol will become more and more attractive.  At some point perhaps ethanol will become economical, but at that point I won’t need the corn-hucksters’ notion of moral superiorty, of “caring about the earth” or what have you, to compel me to use their product.  I’ve already got a far more superior concern- cost- which, it turns out, is a far better motivator for getting the most out of resources, whether “renewable” or not. 

Economists ought to say, “Don’t tell me it’s renewable.  Tell me it’s cost-effective.”

I suppose it’s a sign of extreme wealthiness when people can afford to economize resources based on moral claims and not solely on money costs, but it bugs me immensly when these greens/renewable advocates tell me that I should care about whether a resource is renewable.  I don’t.


3 Responses to “Renewable Resources: Phony Economics”

  1. Gabriel Says:

    OK, prices. But… The current price of gasoline is up to 50%+ taxes in Europe, for example. There’s a political component and a scale component.

    Given the degree to which these things are politicized–because there are obviously big bucks at stake, so it’s unavoidable–we must go beyond issues of intertemporal general equilibrium/first theorem pricing.

    What I find most troubling is the pretense that political means can or should determine the winning alternative to fossil fuels in the future. — It makes a sort of mad sense, in that since these technologies have a large scale component, in terms of startup, a natural selection/competition approach might be messy. OTOH, we’re dealing with government here. :-(

  2. John Langley Says:

    Hey, great logic! I totally agree with your points. Pity about the grammar and punctuation. Someone with such important ideas to communicate should really get these things right. The following extracts contain howlers.
    The relevant words are identified by spacing.

    ‘Hence the only relevant indicator of superiority of a resource is it’s cost’

    ‘When the oil runs out, actually long before the oil runs out, it’s price will rise’

    ‘I’ve already got a far more superior concern’


    Just trying to be helpful. If you don’t get it, then you’re beyond help anyway.

    Love. light and laughter,

    John Langley.

  3. tamerafranks11240 Says:

    Terry Prachet was a pure genius. Thanks for this little remembrance Click

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: