Renewable and Non-Renewable Resources

The following is an excerpt from "Sustainable Development: Prosperity Without Growth," Chapter 1 of the Economic Renewal Guide: A Collaborative Process for Sustainable Community Development. The entire chapter can be downloaded from the Communities section of the Library.

A timber town will be able to log indefinitely if it cuts timber no faster than the forest can regenerate. A farm town can remain viable only if farmers add nutrients to replace those removed by wind, water, and harvest (and only if the nutrients don't irreversibly pollute area water supplies).

Renewable natural resources — timber, soil, quality of life, etc. — are the chief capital assets of many communities. Unsustainable communities spend these capital assets as if they were income. That's how a retail business is liquidated: tables, counters, and cash registers are sold to pay the bills. When natural resources are spent like income, the economy operates like a business in liquidation, leaving nothing for future generations.

In the business world, there are often economic incentives to operate this way. For example, if the CEO of a large timber corporation is forced to choose between clearcutting a forest to make a 15-percent profit or harvesting it sustainably to make only 9 percent, he's likely to choose the short-term profit from clearcutting and then move the corporation on to another forest, or even another business. Oil, mineral, grain, and other large resource-extraction industries are similarly driven by the quest for short-term return. A community whose economy is based on natural resources may find it extremely difficult to resist these corporate pressures to spend down its precious capital. Yet in the long term it can't afford not to: the corporation can always move on to the next forest, but the community can't.

Activities such as mining and oil drilling aren't necessarily wrong or harmful, but the fact is that they deplete finite resources. Someday the silver, oil, and coal will run out (if the market doesn't make them uneconomic first).

All towns based on the extraction of non-renewable resources must eventually find another basis for their economy. Many have transformed themselves into tourist towns. Others have attracted software designers, stock traders, and other entrepreneurs of the information age. Still others have evolved local economies based on exportable arts and crafts. In general, the smart ones anticipate the shift and ensure a hospitable environment for other, more renewable economic activities well before the change takes place.