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Chapter 12:

Non-energy resources




The main part of chapter 12 is a listing of historic data regarding particular raw materials - presenting trends in prices, reserves, and consumption. These data are correct. It is true that although yearly consumption has increased, the remaining reserves have represented a fairly constant or slightly rising number of years´ consumption, and prices have been falling. In his Table 2 on p. 139, and in many of the figures, Lomborg presents data on "years of consumption". However, what is actually meant, is "years of production". Consumption is larger than (primary) production, because we consume not only material that is recently produced (mined), but also material that is recycled. On p. 147, Lomborg cites data on the extent of recycling, but otherwise he does not treat this subject.

There is very little theoretical background in chapter 12. The reader may get the (implicit) impression that prices reflect abundance/scarcity, which is hardly true. Scarcity is indicated more precisely by the scarcity rent (defined as price minus marginal extraction cost), a concept which Lomborg does not mention. Expenditures for exploration of metals have remained fairly constant, which does not imply constant supply. Rather, increasing difficulties of finding metal deposits are offset by technologies of search becoming still cheaper and more efficient. Technologies of utilization have enabled profitable extraction and processing of still lower ore grades. Raw material prices reflect mainly the state-of-art of such technologies.

An aspect neglected by Lomborg is that increased technological input to extract metals from ores of still lower grade imply increased risks of damaging neighbouring ecosystems. A recent example of this danger is the cyanide pollution of the Tisza and Danube rivers from a mine in Romania close to the Hungarian border in 2000 (see e.g. this site).


P. 137 top left: ERROR

About Limits to Growth: "Gold would run out in 1981, silver and mercury in 1985 . . ". Error: It is not true that Limits to Growth made these predictions. The years referred to here result from simple calculations of when the mineral reserves would run out, given that we had only the reserves that were known at that time. From this simplified calculation, the book went on to calculate how long the minerals would last if much larger reserves were found in the future. That is, the book did take into consideration that much more would be found in the future. When Lomborg disregards this, he clearly makes a deliberate attempt to make the authors of Limits to Growth stand out as more unrealistic than they were.


In this chapter, Lomborg omits mention of the update: Beyond Limits to Growth from 1992, except in his note 1052. Flaw: When Lomborg criticises what Limits to Growth says about mineral reserves, he should have mentioned the update to the book also. It contains many relevant discussions, e.g. an attempt to disprove the claim that price mechanisms will prevent that we ever run out of resources. The text is not characterised by "doomsday" prophecies. The authors argue that the world population may ultimately stabilise at a level of 7.7 billions, all of which have a standard of living slightly higher than the that of the western world today. But - only if the necessary precautionary steps are not delayed. Such a conclusion should not have been neglected by Lomborg - he should have discussed it. But whenever the conclusions in Beyond Limits to Growth are contrary to Lomborg´s conclusions, he neglects them. On a single point Lomborg does use the book, namely its statement that the use of resources has not grown exponentially, but only linearly. So when the book may support one of Lomborg´s statements, it is cited (note 1052), and when it contradicts his statements, it is neglected.

P. 137 right: ERROR

"Truth is they could not have won." Error: This is not true. They could have won if they had selected beryllium, germanium, lithium, manganese, nickel, osmium, rhodium, thallium or zinc. This is evident if you consult http://minerals.usgs.gov/minerals/pubs/metal_prices/. However, although Lomborg is not correct here, he is correct in his main points concerning the bet on raw material prices. One may wonder why the environmentalists accepted the bet. The explanation seems to be that just at that time, at the start of 1980, prices of many metals had risen steeply, e.g. those of silver and tungsten. These rises were due to a temporary shortage relative to demands. But just after 1980, prices dropped down again to their former level; thus several price curves have their peak just in the very year when the bet was made. So you may say that the environmentalists were extremely unlucky. Or you might say that they falsely believed that the temporary shortages that arose just that year were warnings of more permanent shortages in the future. But that they failed this time, does of course not prove that shortages will never arise in the future.

P. 144 bottom left: FLAW

Lomborg states that because nitrogen is synthesized from air, there are no limits to nitrogen consumption. Flaw: The expression "no limits" suggests to the reader that there could never be a supply problem. However, the conversion of atmospheric nitrogen (N2) to a form of nitrogen that can be utilized as fertilizer (ammonia or ammonium, which may subsequently be oxidized to nitrate) is very energy-demanding. It is usually carried out in a process that utilizes the H2 present in natural gas. As prices of energy, and gas in particular, are steeply rising, so are the prices of  nitrogenous fertilizer. In USA, the price has nearly doubled since around 2000 when Lomborg wrote his book, se this link, tables 7 and 8. If one accepts Lomborg´ s general view that rising prices reflect scarcity, then this would imply scarcity. In any case, if prices continue to rise steeply, this may actually limit the consumption of nitrogen fertilizer (which might stimulate increased growing of nitrogen fixing crops). 

P. 144-145 and Figure 81: (COMMENT)

"As is evident in Figure 81, prices of fertilizer have dropped . .".Comment: Since 2000, when Lomborg´s curve stops, the prices have gone up again. The fertilizer price index for American farmers was 58 % higher in 2006 than in 2000, see this link. Furthermore, the price is still rising, especially because of the rising price for energy needed to produce nitrogenous fertilizers. So, it has subsequently turned out that Lomborg´s optimistic statement: "This is further indication that fertilizer is getting not more scarce but rather more abundant" was not true.

P. 147 and note 1049: (COMMENT)

". . it is theoretically possible never to run out of a limited resource . . " Comment: Lomborg refers to a paper by Baumol (1986). It is true that Baumol concludes that the economic contribution from finite non-reproducible resources may increase for the indefinite future. But this is only in theory. It presupposes that it is possible to have a stock of the resource sufficient for so many years of consumption that it exceeds by an ever increasing amount the years of consumption represented by the usable quantity of the resource actually remaining on the planet . According to Baumol, this is possible when recycling of a valuable mineral permits one unit of the resource to provide multiple uses (per year). Baumol then adds in a single sentence that the laws of physics suggest that there is a bound beyond which this process cannot continue. Here, one may remark for instance that if copper is used for products with an average lifetime of e.g. 25 years, then we can never recycle more than 4 % of the standing stock of copper annually. The rate of recycling cannot just increase indefinitely, and therefore the economically usable resource cannot increase indefinitely. Baumol includes a limit to the efficiency of resource utilisation, and when he does that, he obtains the result that the annual consumption of the resource will gradually decline and there exists a time when the yearly consumption is smaller than any preassigned lower bound. Baumol writes: "True, the mechanism requires that the effective use of a depletable resource ultimately slow down toward zero. But we need never reach a date at which it actually becomes zero, and it may even continue to grow for a very substantial period of time." In essence, then, his argument is that the time when the resource runs out is so far out in the future that we need not worry. In his note 1049 (but not in the main text), Lomborg partially makes the same reservations as Baumol makes. But if one criticises the authors of Limits to Growth for basing their conclusions on theoretical, unrealistic assumptions, then one should with at least equal strength criticise Baumol for stating conclusions that disregard physical reality. Lomborg does not do that. Instead, the reader gets the impression from his main text that it is possible never to run out of resources.