Natural resource economics : analysis, theory, and applications

"Fisher (1904, p. 387) defined capital as "a stock (of wealth or property, or the value of either) existing at an instant of time." Fisher's conception of capital is inextricably linked to time. The value of a capital asset is derived from its potential to provide a flow of benefits through the production of goods and services. Fisher himself recognized natural resources as capital assets. To illustrate the relationship between stocks, flows, and time, he wrote "Capital of any kind always occupies a position, like that of a reservoir of water, intermediate between two flows, the inflow and outflow" (Fisher, 1897, p.512). The modern treatment of natural resources in economics is squarely constructed on this notion that resources are a reservoir of wealth, a production factor from which products and services (marketed or not) can flow over time. In some cases, like water in a reservoir, there may indeed be an inflow as well as an outflow, but this need not always be the case."