Saturday, September 22, 2007

Money and Resources

Despite the disconnection of the amount of money to the amount of resources whose demand and supply are known, the fact that money is used for the purchase of real items results in a correlation between expenditures and resource consumption.

For example, annual U.S. personal expenditures (dollars per person) is the cube of the environmental global ecological footprint (in billion 2003 global hectares), which is a measure of the total human impact on the biosphere and is closely tied to annual energy consumption. Gross World Product (GWP), a measure of the total value (in money) of the world’s products and services, varies linearly with global ecological footprint (increasing by about one-tenth of the increase in footprint).

The supply of energy and the supply of resources available to the biosphere are becoming better known over time. Annually, we are exceeding the renewable resources available to the biosphere by 42 percent, and the fraction is growing by four percent (of the limit, 11 billion global hectares) per year. Fossil fuels, comprising 85 percent of annual world energy production, have fixed supplies (known reserves) that are 99 times our current annual production.

The situation with fossil fuels is a bit more complicated than the total would lead us to believe. We have 42 times our current annual production of oil left (which we count on for 37 percent annual energy production), with 62 years left for natural gas and 232 years left for coal (each accounting for 24 percent of our annual energy production). And the amount of each type of fuel we consume each year is growing.

No comments: