Just read through it, and get a sense of how resources get from their source to their destination (by destination, I don’t mean your living room so much as the atmosphere, or a landfill …).

What does the earth, the environment ‘do’ for humans, other species?

In very general terms, the earth serves three functions for humans. First, it provides them with living space. Second, it serves as a stock of resources that humans use to meet various needs. Third, it serves as a waste repository. We have to put our waste somewhere, right? I don’t just mean human waste–solid waste, toxic waste, there’s air and water pollution, etc. Now most societies figure out that the better they separate these three functions, the better their living conditions will be. You don’t live in the middle of the forest you’re cutting down for your houses. You don’t dump your waste in your back yard, ‘foul your nest,’ so to speak. And of course the environment provides us with more than material wealth. We’ll talk a bit about the role of natural resources in all this.

What do we use resources for?

• Water (drinking, agricultural, residential use, industrial/commercial, recreation, power generation, etc.)
• Soil (especially topsoil, used to grow food, sustain forests, pasture, etc.)
• Trees (forests, provide us with timber, pulp, shade, carbon sinks, wildlife habitat, etc.)
• Minerals (metals, fossil fuels, gems, rock-cement, roads)
• Animals, fish (we eat them, use them for clothing, leather, etc.)

We get food, shelter, clothing, transportation, infrastructure–all this from natural resources. What do we get, of a physical nature, that doesn’t come from natural resources?

Where do they come from? From underground, forests and mountains, the land (think soil here), atmosphere (rain), oceans and rivers, etc. Often from rural areas. Cities located close to resources–rivers, sources of timber, good agricultural land, etc.

So, how do we get natural resources? We log, mine, dam, irrigate and divert (water), farm, fish, etc.

The resource process

It’s useful to think of a resource process, that goes from discovery of a resource–either a new source of something we already know, or a new resource humans have never considered useful before–to its transformation (for like energy, matter can neither be created nor destroyed):

Stages of the resource process:

1. Discovery-All resources are socially defined–they’re not considered ‘resources’ until we find some economic use for them. Not all culture define resources in the same way. For instance, we discussed how human feces are a valuable resource for paddy rice farming in China (referred to as ‘night soil’–we won’t get into details of how this particular resource process works). Petroleum had to be discovered, and then much research done before many people realized its potential value as a highly concentrated source of energy;
2. cultivation/extraction-the raw material–in the case of agriculture, we cultivate. In the case of timber, we log. In the case of petroleum, we drill.
3. transportation-this entails getting it from the source, where it was extracted, to a place where it can be consumed, refined, etc. With timber, we’ve used rail, trucks, rivers, etc. With petroleum we use pipelines, huge oil tankers that can carry well over 1 million gallons of oil, and require quite a bit of fuel just to run.
4. processing-what does it get turned into? For whom? In the case of petroleum, it goes to refineries, and heating produces different grades of fuels. Some of the stuff that is left in the process may be used as tar on roads, or as low-grade lubricants. Refineries are often located near ports, where tankers can navigate, but in the U.S. we have lots of refineries (and our own sources of oil). Timber may go to pulp or sawmills, minerals to smelters, crops to food processing plants, mills, water through some sort of treatment facility.
5. distribution-getting it out to consumers. How do we get the refined product(s) out to the consumer markets? Take the case of Iowa Beef Pocessors. They may buy cattle from all over the U.S., and have it shipped to the Midwest for slaughter and processing, and then ship it back to various retail/wholesale chains (and don’t forget our discussions of vertical integration and multinationals here … ). For petroleum it means tankers on the road or by rail, lots of trucks, ships and plans delivering our freight.
6. transformation-Matter, like energy, can’t be created or destroyed. Just transformed. Thus consumers don’t really ‘consume’ the stuff they buy, just transform it. In some cases, in China for instance, food consumed may become ‘night soil.’ Lumber in a house may be transformed slowly–housese tend to last a while. Paper degrades more quickly, but can be recycled. You should be getting the idea. There may be multiple steps. For instance, pesticides and fertilizers may be dlivered to farmers, who then use them to cultivate crops (as inputs in a process of resource production).

Who uses resources? Here’s a comparison:

• Footprint: how many hectares are needed to support current consumption patterns (in other words, it’s taking resource consumption and representing it as an equivalent amount of land)
• Per capita footprint: how many hectares per person are needed
• Hectare: equals about 2.5 acres

The U.S. uses about 20 times more than the average person from Bangladesh. What if everyone used resources at the same rate as the U.S.?

Where do they come from? Here’s a good set of links from the American Assoc. for the Advancement of Science if you’re interested in specific resources, where they come from, and where they’re mostly consumed. In most cases, they’re consumed in different regions of the world than where they’re produced, although most countries do have their own stocks of natrual resources. However, in general, if you take a resource through this process (I recommend you practice this a couple of times), you’ll discover that production of resources for global consumption (i.e., production in one area for consumers in another) can have pretty massive implications for the environment.

The problem of negative externalities

Ever buy something for a good price and wonder how you could purchase it so cheaply? Economists use an interesting concept called an ‘externality‘ that helps understand why the price of goods sometimes seems too good to be true. It turns out that not all costs of producing a good end up being incorporated into its price. That’s important, because it means consumers get things cheaply–and they consume more of a good as a result–and because others end up paying some of those costs that aren’t included in the calculation of the price of the good–in other words, they’re ‘externalized.’ Take a T-shirt from WalMart. It may be made by factory labor in Bangladesh, where garment workers may get paid $68/month, working 70/100 hours / week. Conditions are often unsafe, and over 1000 workers died a few years back when sweatshop workers were crushed when a high-rise building collapsed. Costs associated with cotton production include use of pesticides, fuel, fertilizers, health effects on farmers, then there are the costs of transport from factories to retail sites in the US, with the accompanying greenhouse gas emissions. These costs are all dispersed, and it’s hard to really put a price tag on them, but it’s just as clear that the purchaser of the T-shirt is getting a good deal at the expense of a lot of other problems. If all of those costs, including paying Bangladeshi workers a living wage, were instead included in the price of the T-shirts, or ‘internalized,’ WalMart wouldn’t sell nearly as many T-shirts (and they might still be produced in the US). Companies look to externalize as many costs as they legally can, to maximize returns on investment for their shareholders. Governments in some cases become ‘captured’ by powerful industries, and there may be few efforts to get companies to capture more of these costs–it would reduce consumption by increasing the price of goods, and politicians don’t necessarily benefit from that sort of development.

There are positive externalities as well. The classic example is vaccines. Parents who decline to have their children vaccinated receive a positive benefit from all the other children who were vaccinated (decreasing the likelihood that a disease would spread, because there are fewer children who might carry it to those who were not vaccinated). But for understanding resource use, consumption, and why resources are often underpriced–and none is likely as underpriced as gasoline–negative externalities play a much more important, if harmful role.

• Footprint: how many hectares are needed to support current consumption patterns (in other words, it’s taking resource consumption and representing it as an equivalent amount of land)
• Per capita footprint: how many hectares per person are needed
• Hectare: equals about 2.5 acres

The U.S. uses about 20 times more than the average person from Bangladesh. What if everyone used resources at the same rate as the U.S.?

Where do they come from? Here’s a good set of links from the American Assoc. for the Advancement of Science if you’re interested in specific resources, where they come from, and where they’re mostly consumed. In most cases, they’re consumed in different regions of the world than where they’re produced, although most countries do have their own stocks of natrual resources. However, in general, if you take a resource through this process (I recommend you practice this a couple of times), you’ll discover that production of resources for global consumption (i.e., production in one area for consumers in another) can have pretty massive implications for the environment.

The problem of negative externalities

Ever buy something for a good price and wonder how you could purchase it so cheaply? Economists use an interesting concept called an ‘externality‘ that helps understand why the price of goods sometimes seems too good to be true. It turns out that not all costs of producing a good end up being incorporated into its price. That’s important, because it means consumers get things cheaply–and they consume more of a good as a result–and because others end up paying some of those costs that aren’t included in the calculation of the price of the good–in other words, they’re ‘externalized.’ Take a T-shirt from WalMart. It may be made by factory labor in Bangladesh, where garment workers may get paid $68/month, working 70/100 hours / week. Conditions are often unsafe, and over 1000 workers died a few years back when sweatshop workers were crushed when a high-rise building collapsed. Costs associated with cotton production include use of pesticides, fuel, fertilizers, health effects on farmers, then there are the costs of transport from factories to retail sites in the US, with the accompanying greenhouse gas emissions. These costs are all dispersed, and it’s hard to really put a price tag on them, but it’s just as clear that the purchaser of the T-shirt is getting a good deal at the expense of a lot of other problems. If all of those costs, including paying Bangladeshi workers a living wage, were instead included in the price of the T-shirts, or ‘internalized,’ WalMart wouldn’t sell nearly as many T-shirts (and they might still be produced in the US). Companies look to externalize as many costs as they legally can, to maximize returns on investment for their shareholders. Governments in some cases become ‘captured’ by powerful industries, and there may be few efforts to get companies to capture more of these costs–it would reduce consumption by increasing the price of goods, and politicians don’t necessarily benefit from that sort of development.

There are positive externalities as well. The classic example is vaccines. Parents who decline to have their children vaccinated receive a positive benefit from all the other children who were vaccinated (decreasing the likelihood that a disease would spread, because there are fewer children who might carry it to those who were not vaccinated). But for understanding resource use, consumption, and why resources are often underpriced–and none is likely as underpriced as gasoline–negative externalities play a much more important, if harmful role.