Resources, scarcity, technology and growth

This paper reviews the history of economic growth since the industrial revolution, viewed as a positive feedback process involving resource scarcity, conversion efficiency, substitution, innovation and new applications leading to increased demand. Related notions including thermodynamic measures, exergy, power, work, the Kuznets curve, and the so-called `rebound effect’ are also discussed. The rebound effect is, in effect, the growth dynamic. Some implications for the future are discussed. Thermodynamics and natural resources The term `resources’ is used in many ways in different disciplines. For purposes of this paper, a resource is an essential input to the economic process. Resources may be material or immaterial (e.g. information) and material resources may be of natural origin or man-made. Services provided by nature (e.g. air, biodiversity, `assimilative capacity’) are also sometimes called resources. However, in this paper, the term natural resources is restricted hereafter to energy – actually exergy– carriers, products of photosynthesis (phytomass) and other industrial raw materials extracted from the natural environment by intentional human activity. The word energy is widely misused, and for the sake of precision I will introduce a different term, exergy that is less familiar but more precise. Energy is a conserved quantity (the first law of thermodynamics) , which means that it can only change form or quality (e.g. temperature) but can never be created or destroyed.. Energy and mass are inter-convertible, in principle (recall Einstein’s formula E = MC ), although nuclear reactions convert only infinitesimal amounts of mass into energy, while there are no practical processes for converting energy to mass. For all other processes of concern to humans, both the mass and