Don't Forget History
I am a long-time subscriber to PERC Reports and enjoy reading each issue. But I object to the premise implied in "Betting on the Wealth of Nature" by David McClintick and Ross Emmett (September 2005) regarding natural resource prices and availability. The Simon-Ehrlich wager was based on metals that have long been substitutable, wracked by cartel-like supply and demand, and subject to technological supplantation. The authors use the "wager" in a disingenuous attempt, by extension, to show us that there is no need to worry about running out of natural resources.
History is replete with civilizations, some advanced, that have failed because they depleted their natural resources.
-Carl D. Peterson
Don't Forget Energy
"Betting on the Wealth of Nature" by David McClintick and Ross Emmett reminded me of a discussion I had with Julian Simon at a PERC conference in Bozeman. My bet was that prices for raw materials would go up over the long term because substitutes (and poorer ore) would require more energy to process, and that energy itself would get more expensive because convenient substitutes are tough to come by.
But the very fact that energy costs go up drives inflation, so the inflation- adjusted price for the metals is an imperfect measure. One better measure (and one that would tend to vindicate Ehrlich) is the "price" per ton of metal measured in the BTUs needed to produce it.
On the other hand, a point that the McClintick/Emmett article ignores tends to vindicate Simon: Over the past century, the percent of national income or percent of national energy demand that has gone into the five metals has probably declined drastically, precisely because substitutes have become available. Fiber optic cable for copper is a good example, as is quartz lighting for tungsten. In both cases, a cheap, low-energy-to-produce material is replacing many uses of the metal. The energy price effect shows up on the curve you published, too. Cheap Texas crude kicked in nicely after World War I, dropping prices of the five metals drastically. They rose and fell with demand, energy prices, etc., and are now, in the aggregate, about where they were 80 years ago.
It's time to bet on something else. My bet is that we're never going to see cheap oil again-say, under $40 a barrel.
-Steven S. Ross
New York, New York
You Can't Subsidize the Sun
Thomas Tanton ("Distorting the Wealth of Nature," September) has the right idea: Subsidies are bad. But he fails to mention that it is impossible to account for the ways that we use renewable energy, and therefore that subsidies for renewables favor some renewables over others.
As Tanton does, one can compare fossil fuels with the uses of solar energy that impersonate fossil fuels-using solar power to produce electricity. But there are many other uses of the sun: clotheslines versus dryers, windows versus electric lights, solarpowered walking or bicycling versus driving, architecture that uses passive heating and cooling versus traditional heating and cooling. These are too numerous and too subtle for bookkeepers- and I havenâ??t even mentioned lighting and heating the outside, distilling our water, growing our food and forests, or lighting our moon! Only the marketplace notices these.
Jane S. Shaw welcomes vigorous debate about controversial environmental topics. Send your letters to her at: PERC Reports, 2048 Analysis Drive, Suite A, Bozeman, MT 59718 or firstname.lastname@example.org.