Renewable and Non-renewable assets

There is no denying the fact that in Modern Economic theory, a non-renewable resource known as a predetermined reserve is a resource that does not renovate itself at an appropriate rate for supportable economic abstraction in expressive human time-frames. We can introduce a model as carbon-based progressively resulting fuel. The unique biological material, with the help of heat and pressure, becomes a gasoline such as oil or gas, Fossil Fuel which may be considered as coal, petroleum, and  natural gas, are all non-renewable resources.

Metalores are supplementary examples of non-renewable resources. The metals themselves are present-day in vast amounts in the earth’s crust, and are constantly focused and refilled over millions of years. However their extraction by humans only occurs where they are concentrated by natural processes (such as heat, pressure, organic activity, weathering and other processes) enough to become economically viable to extract. These processes generally take from tens of thousands to millions of years. As such, localized deposits of metal ores near the surface which can be extracted economically by humans are non-renewable in human timeframes, but on a world scale, metal ores as a whole are inexhaustible, because the amount vastly exceeds human demand, on all timeframes. Though they are theoretically non-renewable, just like with rocks and sand, humans could never deplete the world’s supply. In this respect, metal ores are considered vastly greater in supply to fossil fuels because metal ores are formed by crustal scale processes which make up a much larger portion of the earth’s near-surface environment than those that form fossil fuels, which are limited to areas where carbon-based life forms flourish, die, and are quickly buried. These fossil fuel-forming environments occurred lengthily in the Carboniferous Period.

In contrast, resources such as timber (when harvested sustain-ably) and wind (used to power energy conversion systems) are considered renewable resources, largely because their localized replenishment can occur within timeframes meaningful to humans.

Non-renewable assets are:

1 Fossil fuel

2 Radioactive fuel

3 Renewable resources

4 Economic models

Natural resources such as coal, petroleum (crude oil) and natural gas take thousands of years to form naturally and cannot be replaced as fast as they are being consumed. Eventually it is considered that fossil-based resources will become too costly to harvest and humanity will need to shift its reliance to other sources of energy. These resources are yet to be named.

An alternative hypothesis is that carbon based fuel is virtually inexhaustible in human terms, if one includes all sources of carbon-based energy such as methane hydrates on the sea floor, which are vastly greater than all other carbon based fossil fuel resources combined. These sources of carbon are also considered non-renewable, although their rate of formation/replenishment on the sea floor is not known. However their extraction at economically viable costs and rates has yet to be determined.

At present, the main energy source used by humans is non-renewable fossil fuels. Since the dawn of internal combustion engine technologies in the 17th century, petroleum and other fossil fuels have remained in continual demand. As a result, conventional infrastructure and transport systems, which are fitted to combustion engines, remain prominent throughout the globe. The continual use of fossil fuels at the current rate is believed to increase global warming and cause more severe climate change.

Renewable resources

Natural resources, called renewable resources, are replaced by natural processes and forces persistent in the natural environment. There are intermittent and reoccurring renewable, and recyclable materials, which are utilized during a cycle across a certain amount of time, and can be harnessed for any number of cycles.

The production of goods and services by manufacturing products in economic systems creates many types of waste during production and after the consumer has made use of it. The material is then either incinerated, buried in a landfill or recycled for reuse. Recycling turns materials of value that would otherwise become waste into valuable resources again.

The natural environment, with soil, water, forests, plants and animals are all renewable resources, as long as they are adequately monitored, protected and conserved. Sustainable agriculture is the cultivation of plant materials in a manner that preserves plant and animal ecosystems over the long term. The over-fishing of the oceans is one example of where an industry practice or method can threaten an ecosystem, endanger species and possibly even determine whether or not a fishery is sustainable for use by humans. An unregulated industry practice or method can lead to a complete resource depletion.

The renewable energy from the sun, wind, wave, biomass and geothermal energies are based on renewable resources. Renewable resources such as the movement of water (hydropower, tidal power and wave power), wind and radiant energy from geothermal heat (used for geothermal power) and solar energy (used for solar power) are practically infinite and cannot be depleted, unlike their non-renewable counterparts, which are likely to run out if not used sparingly.

The potential wave energy on coastlines can provide 1/5 of world demand. Hydroelectric power can supply 1/3 of our total energy global needs. Geothermal energy can provide 1.5 more times the energy we need. There is enough wind to power the planet 30 times over, wind power could power all of humanity’s needs alone. Solar currently supplies only 0.1% of our world energy needs, but there is enough out there to power humanity’s needs 4,000 times over, the entire global projected energy demand by 2020.

Renewable energy and energy efficiency are no longer niche sectors that are promoted only by governments and environmentalists. The increasing levels of investment and that more of the capital is from conventional financial actors, both suggest that sustainable energy has become mainstream and the future of energy production, as non-renewable resources decline. This is reinforced by change concerns, nuclear dangers and accumulating radioactive waste, high oil prices, peak oil and increasing government support for renewable energy. These factors are commercializing renewable energy, enlarging the market and growing demand, the adoption of new products to replace obsolete technology and the conversion of existing infrastructure to a renewable standard.

In economics, a non-renewable resource is defined as goods, where greater consumption today implies less consumption tomorrow. David Ricardo in his early works analyzed the pricing of exhaustible resources, where he 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 Hotel ling’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 non-augment able 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 rose annually at a rate equal to the rate of interest, reflecting the increasing scarcity of the resources. The Hart-wick’s rule provides an important result about the sustainability of welfare in an economy that uses non-renewable source.

However, nearly all metal prices have been declining over time in inflation adjusted terms, because of a number of false assumptions in the above. Firstly, metal resources are non-renewable, but on a world scale, largely inexhaustible. This is because they are present throughout the earth’s crust on a vast scale, far exceeding human demand on all time scales. Metal ores however, are only extracted in those areas where nature has concentrated the metal in the crust to a level whereby it is locally economic to extract. This also depends on the available technology for both finding the metal ores as well as extracting them, which is constantly changing. If the technology or demand changes, vast amounts of metal previously ignored can become economically ex tractable. This is why Ricardo’s simplistic notion that the price of a mineral resource should increase over time has in fact turned out to be the opposite, nearly all metal ores have decreased in inflation adjusted prices since well before the early 20th century. The main reason he was wrong is that he assumed that metals are exhaustible on a world scale, and he also misunderstood the effect of globally competing markets; in human terms the amount of metal in the earth’s crust is essentially limitless. It is only in localized areas that metal ores can become depleted, as these local areas compete with extraction an cost of resources elsewhere, which does have ramifications for the sustainability of local economies.

A renewable resource is a natural resource which can replenish with the passage of time, either through biological reproduction or other naturally recurring processes. Renewable resources are a part of Earth‘s natural environment and the largest components of its exosphere. A positive life cycle assessment is a key indicator of a resource’s sustainability. In 1962, Paul Alfred Weiss defined Renewable Resources as: “The total range of living organisms providing man with food, fibers, drugs, etc…”

Renewable resources may be the source of power for renewable energy. However, if the rate at which the renewable resource is consumed exceeds its renewal rate, renewal and sustainability will not be ensured.