Non-renewable resource
A non-renewable resource (also called a finite resource) is a natural resource that cannot be readily replaced by natural means at a pace quick enough to keep up with consumption.[1] An example is carbon-based fossil fuels. The original organic matter, with the aid of heat and pressure, becomes a fuel such as oil or gas. Earth minerals and metal ores, fossil fuels (coal, petroleum, natural gas) and groundwater in certain aquifers are all considered non-renewable resources, though individual elements are always conserved (except in nuclear reactions, nuclear decay or atmospheric escape).
Conversely, resources such as timber (when harvested sustainably) and wind (used to power energy conversion systems) are considered renewable resources, largely because their localized replenishment can also occur within human lifespans.
Land surface[edit]
Land surface can be considered both a renewable and non-renewable resource depending on the scope of comparison. Land can be reused, but new land cannot be created on demand, making it a fixed resource with perfectly inelastic supply[19][20] from an economic perspective.
Economic models[edit]
In economics, a non-renewable resource is defined as goods whose greater consumption today implies less consumption tomorrow.[27] David Ricardo in his early works analysed the pricing of exhaustible resources, and argued that the price of a mineral resource should increase over time. He argued that the spot price is always determined by the mine with the highest cost of extraction, and mine owners with lower extraction costs benefit from a differential rent. The first model is defined by Hotelling's rule, which is a 1931 economic model of non-renewable resource management by Harold Hotelling. It shows that efficient exploitation of a nonrenewable and nonaugmentable resource would, under otherwise stable conditions, lead to a depletion of the resource. The rule states that this would lead to a net price or "Hotelling rent" for it that rises annually at a rate equal to the rate of interest, reflecting the increasing scarcity of the resources.[28] The Hartwick's rule provides an important result about the sustainability of welfare in an economy that uses non-renewable resources.[29]