Public policy and future mineral supplies

John E. Tilton, Phillip C.F. Crowson, John H. DeYoung, Roderick G. Eggert, Magnus Ericsson, Juan Ignacio Guzmán, David Humphreys, Gustavo Lagos, Philip Maxwell, Marian Radetzki, Donald A. Singer, Friedrich W. Wellmer

Research output: Contribution to journalArticle

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Abstract

A widespread and pessimistic view of the availability of mineral commodities calls for strong government initiatives to ensure adequate future supplies. This article provides a more market oriented and optimistic perspective, one that focuses on production costs and prices rather than physical availability. It sees short-run shortages continuing to plague commodity markets in the future as in the past. Though painful while they last, these shortages are temporary and do not pose a serious long-run threat to human welfare. Moreover, even without government intervention, they self-correct. The sharply higher prices that they evoke create strong incentives that foster supply and curb demand. Potentially more serious are long-run shortages due to mineral depletion. Such shortages are often thought to be inevitable, a conclusion that flows directly from the physical view of depletion. For various reasons, we reject this view of depletion in favor of an economic view. The latter recognizes that depletion may create long-run shortages, but stresses that this need not be the case if new technology can continue to offset the cost-increasing effects of depletion in the future as it has in the past. The economic view also suggests that a list of mineral commodities most threatened by depletion can best be compiled using cumulative availability curves rather than the more common practice of calculating commodity life expectancies based on estimates of available stocks.

Original languageEnglish
Pages (from-to)55-60
Number of pages6
JournalResources Policy
Volume57
Early online date6 Feb 2018
DOIs
Publication statusPublished - Aug 2018

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commodity
shortage
public policy
mineral
commodity market
life expectancy
production cost
economics
incentive
production costs
market
new technology
cost
welfare
policy
public
Depletion
Public policy
Minerals
threat

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Tilton, J. E., Crowson, P. C. F., DeYoung, J. H., Eggert, R. G., Ericsson, M., Guzmán, J. I., ... Wellmer, F. W. (2018). Public policy and future mineral supplies. Resources Policy, 57, 55-60. https://doi.org/10.1016/j.resourpol.2018.01.006
Tilton, John E. ; Crowson, Phillip C.F. ; DeYoung, John H. ; Eggert, Roderick G. ; Ericsson, Magnus ; Guzmán, Juan Ignacio ; Humphreys, David ; Lagos, Gustavo ; Maxwell, Philip ; Radetzki, Marian ; Singer, Donald A. ; Wellmer, Friedrich W. / Public policy and future mineral supplies. In: Resources Policy. 2018 ; Vol. 57. pp. 55-60.
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Tilton, JE, Crowson, PCF, DeYoung, JH, Eggert, RG, Ericsson, M, Guzmán, JI, Humphreys, D, Lagos, G, Maxwell, P, Radetzki, M, Singer, DA & Wellmer, FW 2018, 'Public policy and future mineral supplies', Resources Policy, vol. 57, pp. 55-60. https://doi.org/10.1016/j.resourpol.2018.01.006

Public policy and future mineral supplies. / Tilton, John E.; Crowson, Phillip C.F.; DeYoung, John H.; Eggert, Roderick G.; Ericsson, Magnus; Guzmán, Juan Ignacio; Humphreys, David; Lagos, Gustavo; Maxwell, Philip; Radetzki, Marian; Singer, Donald A.; Wellmer, Friedrich W.

In: Resources Policy, Vol. 57, 08.2018, p. 55-60.

Research output: Contribution to journalArticle

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AU - Tilton, John E.

AU - Crowson, Phillip C.F.

AU - DeYoung, John H.

AU - Eggert, Roderick G.

AU - Ericsson, Magnus

AU - Guzmán, Juan Ignacio

AU - Humphreys, David

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AU - Maxwell, Philip

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AU - Singer, Donald A.

AU - Wellmer, Friedrich W.

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AB - A widespread and pessimistic view of the availability of mineral commodities calls for strong government initiatives to ensure adequate future supplies. This article provides a more market oriented and optimistic perspective, one that focuses on production costs and prices rather than physical availability. It sees short-run shortages continuing to plague commodity markets in the future as in the past. Though painful while they last, these shortages are temporary and do not pose a serious long-run threat to human welfare. Moreover, even without government intervention, they self-correct. The sharply higher prices that they evoke create strong incentives that foster supply and curb demand. Potentially more serious are long-run shortages due to mineral depletion. Such shortages are often thought to be inevitable, a conclusion that flows directly from the physical view of depletion. For various reasons, we reject this view of depletion in favor of an economic view. The latter recognizes that depletion may create long-run shortages, but stresses that this need not be the case if new technology can continue to offset the cost-increasing effects of depletion in the future as it has in the past. The economic view also suggests that a list of mineral commodities most threatened by depletion can best be compiled using cumulative availability curves rather than the more common practice of calculating commodity life expectancies based on estimates of available stocks.

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Tilton JE, Crowson PCF, DeYoung JH, Eggert RG, Ericsson M, Guzmán JI et al. Public policy and future mineral supplies. Resources Policy. 2018 Aug;57:55-60. https://doi.org/10.1016/j.resourpol.2018.01.006