ABSTRACT
As a consequence of the growing concern about the increasing scarcity of fossil fuel and other raw materials, as well as the spread of the non-economic influences described in the previous chapter, conventional theories of natural-resource scarcity were extended and modified significantly after the early 1960s. In theoretical work, the emphasis has been laid on the optimal rate of depletion of exhaustible and renewable resources, with extensions to include monopoly, uncertainty and other market imperfections. The main criticism of such approaches, however, is that they are limited to a specific class of environmental problems: the increasing scarcity of economically valuable resource inputs into production. Nevertheless, they have established an important theoretical foundation for more ambitious explorations of the economic problem of environmental degradation. This chapter will survey these theories and discuss this criticism.
