What happens if we run out of nonrenewable resources

Weitzman has devised a way to make a similar adjustment to net domestic product to account for the exhaustion of nonrenewable resources.

In effect, the income that nonrenewable resources seem to generate is merely temporary—it cannot be sustained forever. So if we want a measure of our permanent income—that which can be sustained for generation after generation forever—we must deduct this temporary component from net domestic product. Weitzman does this computation for the key exhaustible resources, ranging from bauxite to zinc, and crude oil to iron ore. His conclusion is that current income need be adjusted downward by only about one percent to account for the gradual loss of exhaustible resources.

The key players in this calculation are the energy resources: oil, natural gas, and coal. Crude oil accounts for half of the necessary adjustment to income, and the combination of oil, gas and coal amounts to about 90 percent of the total.

Current income also fails to properly reflect our wealth because it does not account for future growth due to technological progress. On this account, current income tends to understate—by some 40 percent—a more accurate measure of income that would account for the importance of future technological change.

This understatement obviously swamps the effects of nonrenewable resources. Proven reserves are getting larger, and, as witnessed by the famous bet between Paul Ehrlich and the late Julian Simon, prices of many nonrenewable raw materials have been stable or falling. Thus, though we may not be quite as rich as we think we are, it appears that we also are not nearly so rich as we are going to become.

Renewable energy sources, such as solar and wind power, provide a viable alternative to fossil fuels. Jackson Howarth. In order to provide you with the latest digital energy web services you need to use the latest and greatest web browsers.

Update your browser for a better web experience, here and all over the internet. When will fossil fuels run out? When will we run out of oil? When will we run out of coal and natural gas? Oil, natural gas, and coal are collectively called fossil fuels. They are found in underground layers of rock and sediment.

Pressure and heat worked together to transform the plant and animal remains into crude oil also known as petroleum , coal, and natural gas. The plants and animals that became fossil fuels lived in a time called Carboniferous Period , around to million years ago. The energy in the plant and animal remains originally came from the sun; through the process of photosynthesis, solar energy is stored in plant tissues, which animals then consume, adding the energy to their own bodies.

When fossil fuels are burned, this trapped energy is released. Crude oil is a liquid fuel fossil fuel that is used mostly to produce gasoline and diesel fuel for vehicles, and for the manufacturing of plastics. Natural gas is widely used for cooking and for heating homes. Natural gas can be pumped out through the same wells used for extracting crude oil. Coal is a solid fossil fuel that is used for heating homes and generating power plants.

It is found in fossilized swamps that have been buried beneath layers of sediment. Since coal is solid, it cannot be extracted in the same manner as crude oil or natural gas; it must be dug up from the ground.

Nuclear energy comes from radioactive elements, mainly uranium , which is extracted from mined ore and then refined into fuel. Unfortunately, human society is—for the time being—dependent on nonrenewable resources as its primary source of energy. Approximately 80 percent of the total amount of energy used globally each year comes from fossil fuels. We depend on fossil fuels because they are energy-rich and relatively cheap to process.

Higher prices of raw materials. As Supply falls price will rise. Demand for many of these goods is inelastic; therefore the price rise could be significant. This would lead to an increase in costs of production, Therefore it would cause the SRAS curve to shift to the left. This would lead to a higher inflation rate and lower economic growth. However, it is worth bearing in mind that higher raw material prices don't necessarily lead to inflation and lower economic growth. There are many other factors that affect inflation.