Geology Reference
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human capital to the list, meaning knowledge, know how, health and security. In
fact, the “holy grail” of an accountancy devoted to sustainable development would
consist of having a systematic evaluation of all these capitals throughout time and
universally extended across countries.
2.3 Cost, price and value
The rationale for this topic lies ultimately in the development of a methodology (or
a set of methodologies) capable of objectively and comprehensively assessing this
planet's mineral capital. The authors will therefore refer regularly to concepts such
as cost and value and so it is important from the outset to explore what useful
and objective tools Economics may be able to lend to the valuation of a natural
resource.
In the broadest sense of the word, value is a term laden with and by people's
perception, and can be perceived as a measure of how good or bad something is
(or is thought to be). This meaning is deemed unsuitable in the true assessment
of a certain “good” because of its dependency on complex and di
cult to quantify
aspects of human existence: physical, chemical, biological, geological, ecological,
economic, social, political and religious.
Science quantifies physical properties, whilst Economics quantifies monetary
costs and prescribes prices. Both help to assess a natural resource, qualitatively
and quantitatively and both interact with each other. From an economic point of
view, the market value is a concept based on a complex web of human behaviour. It
represents the threshold at which involved parties would willingly undergo in a given
transaction (financial or otherwise.) Numbers typically dictate proceedings, in the
sense that one is accustomed in such settings to hear the price [a given number] of
an agreed currency, working hours or even livestock. Numerical values primarily
serve as comparisons among different offerings of a product, service or intellectual
property, etc.
These concepts are alien to Nature and infringe on “her” right to partake in
negotiations outside of mankind's set of rules. Emotions and expectations of a
product, service or even brand (not just rational thinking) complicates Man's point
of view even more. An example of such human based complexity can be found in the
concept of price. The (sold) price is what someone actually paid for a property (in
monetary units). It is formed in the exchange. This is sometimes but not always an
indication of value. From classical economic theory, in a wide enough market with
all forces interacting, a rather objective price should be achieved. Every market is
more or less controlled and subdued by rules and interests which in turn condition
prices. Even in a globalised system, market prices are always (to a varying extent)
a function of product availability. If prices are subject to demand and could be
manipulated in function of a marketing campaign for instance, objective figures are
skewed and “true” monetary values di
cult to ascertain. Nevertheless, it is often
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