Geology Reference
In-Depth Information
Chapter2
Economic versus Thermodynamic
Accounting
2.1 Introduction
Mining activities have accompanied the development of Man ever since the early
stages of civilisation: to such an extent that its periods have been coined after
the prominent resource that supported the era: Bronze, Iron, Coal, and Oil Ages.
Apart from providing the name of a historic era, non-renewable resources have
been in the past presented as gifts from Nature that could be withdrawn whenever
they were needed. Moreover, as global mineral wealth is only weakly accounted
there is a false perception that it is unlimited. This assumption then supports the
unsustainability of mineral resources extraction which in fact, is only reduced if
mining activities cause major degradation to the surrounding ecosystem or become
uneconomic. When Nature was abundant, no side effects were properly consid-
ered. However, the intense technological development of the 20th century forced
society to recognise them. First, through the development of corrective measures
that influence business proceedings, second through the growing consciousness by
governments that there is a loss of wealth that will never be restored and third
through increased scientific research efforts into the global environmental problem.
This chapter undertakes a non-extensive review of what and how economists,
accountants and physical scientists have contributed to assessing the depletion of
mineral capital and its environmental impact.
2.2 Natural capital concept
The concept of capital is well understood by the general layman. In order to obtain
and add to it, people use and consume materials and/or ecosystem services i.e.
they convert Nature into various monetary assets. Increased capital leads to the
generation of welfare and wellbeing, two things that people naturally desire and
want to increase. This longing for improvement and the practice of manipulating
Nature to acquire better standards of living is, for the majority of adult individuals,
normality. Yet it is this same sense of normality which leads to an overwhelming,
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