True cost of natural resources

Thank you for initiating this series. It is great to hear from Dr. Zimmerman, and I hope this ongoing dialogue on the subject of climate change will involve many others who have toiled in the field of environment and sustainability for the past several decades.

Working in this field, I find that while:

(1) the argument in favor of equal opportunity between countries and between generations (first publicly formulated by an international body through the work of the Brundtland Commission in the 1980s), as well as

(2) the argument in favor of addressing most pressing needs of humanity today instead of focusing on averting possible climatic disasters of the future (most vocally made by Bjoern Lomborg)

are being heard (albeit reluctantly by some), we as humanity are still dancing around the fundamental principles of economics that simply have not been addressed in order to enable a significant transformation to take place. (I don't think we really are arguing about the fundamental, real and present need for "another way to be", the need for a transformation of the organizing principles by which we live - be it with the help of catalysts, such as the threat of global warming, or in the face of our obvious inability to correctly predict and manage natural disasters, or because of other global phenomena we observe and experience). So, what are the solutions now on offer?

Do governments need to pour significant resources into R&D to develop and test new technologies that would enable a more natural, organic, planet- and people-centric infrastructure to emerge that would support the ever expanding and ever deepening production/consumption cycle? Without a doubt. Does the production and consumption of energy reside at the very heart of this debate, both as the single most important enabler of all life activities on this planet, but also as the main source of pollution and CO2 release? No question. And we can argue ad infinitum about the costs and benefits of developing various forms of alternatives to hydrocarbons - be it solar, wind, tidal, nuclear, hydro, or any other type of energy source. In my view, market principles and the aforementioned R&D investments will settle that debate over time across the globe. 

What I find most puzzling is that the issue of the intrinsic value, and hence the true cost, of natural resources themselves does not get brought up very often. In fact, to my knowledge (and I very much welcome input on relevant info sources), there has been little effort to raise the awareness of the general public on this issue, save for a barely noticed documentary, The 11th Hour, which did not enjoy a fraction of the public acclaim received by The Inconvenient Truth. What should it cost to extract a barrel of oil from the ground, refine and distribute it to consumers? How much should it cost to chop down a tree? What is the value of clean air? How do we define that value? What discount factor do we apply? We use economic principles to calculate away the exchange of our life energies, via the tool of a monetary equivalent, yet we forget the value of natural resources that enable this exchange in the first place! We use a proxy to determine the "price" of natural resources we use, based on these factors: 

(1) Supply (which has something to do with the cost of obtaining these resources and bringing them to market)

(2) Demand (determined by what most market players competing for available supply are willing to pay)

(3) Force majeure - e.g. government fees and tariffs, pricing collusion, regulation, black market forces, crime, political or activist uprising, war, revolt, terrorism, natural disaster, etc.

Using an integral, multidisciplinary life cycle approach to valuing natural resources in relation to the human demand on those resources could create the ultimate economic driver for most planet- and people-conscious behaviors, dis-incentivize negative externalities, like hazardous pollution and CO2 emission, and hard-wire sustainability principles into any production/consumption cycle anywhere on this planet. Of course, such radical approach does not appear to be in the interests of any group up and down the first tier spiral. It would cause producers an enormous increase in operating costs, which they would need to pass on to consumers, who as a result would need to drastically change their preferences and purchasing behavior, and even - God forbid - lifestyle. Governments would need to come up with enormous amounts of domestic regulation around resource use, as well as a new international commercial regime to enable fair resource exchange. The question around the ultimate "ownership" of resources will undoubtedly arise, and the authority of nation states as the "lords of nature" within their boundaries will be questioned. Posing this challenge in the predominantly first tier world will undoubtedly lead to war and strife. Yet, it seems the time is now to at least start exploring these questions in the [relative] safety of this progressive community.

I welcome your thoughts and observations.