The Theory of Natural Resource Scarcity Indicators: Towards a Synthesis

I review the literature on natural resource scarcity indicators further developing my previous work on this issue (Cleveland and Stern, 1993). Scarcity indicators can be classified by what is being measured eg. in situ value, commodity value etc. and by the mode of valuation considered: exchange value and use value. Prices and rents are common measures of exchange value or indicators of "exchange scarcity" and unit costs can be seen as use value indicators or indicators of "use scarcity". "Use scarcity" supersedes the term "productive scarcity" used in our previous paper. One of the major aims of this paper is to demonstrate the links between productivity indicators like unit costs and the classical concept of use value. The two classes of indicator relate to the Hotelling or Ricardian scarcity models, Commons' discussions of scarcity and efficiency, and a non-marginal vs. a marginal approach to value and scarcity. Inverse MFP is a generalized version of unit cost which can be decomposed into the basic determinants of use scarcity. I review the critiques from Norgaard, Darwin, and Farzin which argue that none of these indicators captures all the dimensions of social scarcity. I continue to show that unit cost or inverse MFP is a more general use scarcity indicator than indicators derived using energy analysis. However, energy analysis has a role in examining limits to technical change in mitigating resource scarcity. Finally I suggest that the way forward will be in the empirical study of models of resource supply and demand and the building of scenarios regarding possible future trends in resource scarcity rather than in a search for a perfect indicator.