Over-exploitation of natural resources is followed by inevitable declines in economic growth and discount rate

Abstract

A major challenge in environmental policymaking is determining whether and how fast our society should adopt sustainable management methods. These decisions may have long-lasting effects on the environment, and therefore, they depend critically on the discount factor, which determines the relative values given to future environmental goods compared to present ones. The discount factor has been a major focus of debate in recent decades, and nevertheless, the potential effect of the environment and its management on the discount factor has been largely ignored. Here we show that to maximize social welfare, policymakers need to consider discount factors that depend on changes in natural resource harvest at the global scale. Particularly, the more our society over-harvests today, the more policymakers should discount the near future, but the less they should discount the far future. This results in a novel discount formula that implies significantly higher values for future environmental goods.

Technologies and perspectives for achieving carbon neutrality

“…3 , 4 Over the past two centuries, the world economy has heavily depended on the overexploitation of natural resources and the alteration of the life-supporting biogeochemical cycles and processes in the biosphere. 5 The current boom in the use of petroleum resources and deforestation is a response to the pressure to meet the growing demand for energy, food, and other commodities. 4 , 6 These eco-unfriendly practices are the root causes of the increased emissions of anthropogenic sources of global greenhouse gases (GHGs), the primary drivers of climate change.…”

Evaluating the Degradation of Natural Resources in the Mediterranean Environment Using the Water and Land Resources Degradation Index, the Case of Crete Island

“…Numerous challenges are linked to natural resources degradation, such as pollution, water scarcity and stress, overexploitation, extreme hydrological events (droughts and floods) soil erosion and desertification [1][2][3][4][5][6][7][8]. In addition, the compound effect of anthropogenic interventions and inappropriate and/or uncoordinated management actions to use and/or protect natural resources could cause significant environmental degradation that may even be irreversible in vulnerable ecosystems [9,10]. A degraded ecosystem may not rehabilitated beyond a critical point.…”

Sustainable Circular Bioeconomy—Feasibility of Recycled Nutrients for Biomass Production within a Pulp and Paper Integration in Indonesia, Southeast Asia

“…The current economic system and related food and other biomass production is based on the linear, inefficient utilization of global resources. One of the main reasons for grand environmental challenges is the incomplete (commercial) valuation of natural resources in terms of the exploitation cost and the full value of products, which leads to the overexploitation of natural capital [1]. An alternative production model to the existing linear and open-ended bioeconomy systems, namely, a circular bioeconomy, should be based on business renewal and new types of structural and functional solutions through out various value-adding chains covering technological, institutional, and social changes [2].…”