Our mental models of mineral depletion - And why they matter

Abstract

Geologists, economists, policy analysts, and others use two different mental models when assessing depletion and the future availability of mineral commodities. The first, the physical view, relies on estimates of the available exploitable stocks of resources and the speed with which society is likely to consume them. The second, the economic view, uses as its measure of availability differences and trends in real (inflation-adjusted) commodity prices. This paper examines these two approaches, highlighting the very different implications that they suggest for the nature of depletion, its future threat, and the most effective public policies for coping with this threat. After exploring the shortcomings of each, the paper concludes that the economic view is, for several reasons, the more useful and helpful for understanding mineral depletion and its threat.