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We have seen that the basic goal of all people is to steadily increase their standard of living.  We have also see that in order to achieve this goal with a growing population it is important that the economy is able to grow.  It is now important for us to consider how we can ensure that the growth we are aiming to generate is sustainable.  That is, we would like to make certain that we can continue to grow in the future.  In this way, future generations will be able to enjoy continuing increases in their living standards.

Resources can be classified as either renewable or non-renewable.  The classification is important, as it will help us to decide the way in which we will manage them.

Renewable resources should be managed so that they are given sufficient time to regenerate.  For example, it has been estimated that it takes one hundred years for an area of forest that has been logged to grow back and appear as it did before the clearing.  As a result, only 1% of Victorian forests are able to be cleared in any one year.  Once an area has been used for logging, that same section can not be logged again until the century has passed.  In this way it is hoped that Victorian forests will be able to be used for many generations to come.

Other renewable resources include livestock such as fish.  In order to fish in Australian waters, you must gain a license.  A fishing license will only be issued if the relevant authorities believe that there are enough fish in the area to be farmed.  Even then, quotas will be enforced.  Once an annual quota is filled, a license holder must stop fishing regardless of how many months there are left  in the year.

Non-renewable resources present a different problem.  Despite the fact that Australia is a vast country, these resources are limited.  We have a lot of coal, but one day it will run out.  Countries which produce crude oil (which is used in the production of petrol, amongst other things) are finding that the demand for oil is beginning to exceed supply.  This situation, dubbed “peak oil”, is causing the price of crude oil to increase.  Eventually it will mean that the price of crude oil will make it impossible for the average person to buy.  Hopefully long before then alternative fuel options will be created.

Economists aim for inter-temporal efficiency.  This is a way of saying that we need to find a balance between the things that we use now and the things that we will need in the future.  Ultimately the only way that we can manage our non-renewable resources is to try and achieve this balance.  This is why it is essential that the government legislates to protect our scarce resources.

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