Global Resources Are Like a Bank Account

We use many different resources on the planet and they all renew themselves at different rates. A forest, for example, grows at a certain rate and it isn’t harmed much when humans harvest a modest amount of its wood. It’s like a bank account.

Let’s say we have a sizable savings account that earns two percent annually. We can live off the interest, but we can have more stuff if we live off the interest plus a bit of the principal, perhaps another two percent. Maybe that’s okay in the first year, but in the second year our interest earnings will be lower because the principal is lower. Each year the principal shrinks, taking the interest with it. Since we want to continue living the good life we continue spending the same amount, but now it takes a bigger bite out of the principal since there is less interest. In 43 years it’ll be the year 2050. If we used the principal at that two percent rate, the principal would be about 41 percent of what we started with today. Furthermore, according to U.N. projections our 2050 population may be as high as 10.6 billion people compared to about 6.6 billion today. That means we’ll have another four billion people to share the 41 percent that’s left in our account. Between the depletion of our resources and the increase in population, the amount of our collective wealth for each person will be just 27 percent of what it is today.

There are two obvious problems with the math we did for this article. 1) It assumes that the depletion rate will stay at two percent despite increased population. 2) As our forests get depleted the value of the wood will go up because there will be decreased supply and increased demand. This will raise the incentive for those in a position to cut down more trees. Thus, as bleak as the picture I painted is, reality is likely to be much bleaker.

Forests are our principal and renewal is our interest. If we don’t live within the means of our interest alone, both the principal and the interest will disappear.

We used the example of forests, but the same can be said of most of our natural resources including fresh water, fresh air, oil, bauxite, soil nutrients, etc. What natural resources do we have in abundance? Sunlight, and wind.

Not Enough Mussels

A resource anecdote

When I was a senior in high school I used to camp with friends on a small, secluded beach on the western coast of Europe. When we first camped there we found an abundance of mussels covering the rocks so we plucked off the largest and then cooked and ate them. That was our first weekend camping there. We returned about two weeks later and did the same thing, but this time the pickings were slim since we had taken the largest two weeks before. By the second day of the second weekend we quit eating them because there were no mussels left worth harvesting.