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.
Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
If you think you should have access to this title, please contact your librarian.