Economics Essay: Analyzing Economic Growth and Resource Scarcity

This economics essay delves into the critical relationship between economic growth and resource scarcity, a pressing global issue. The essay argues that while economic growth, driven by technological advancements, infrastructure development, and efficient human capital, can mitigate resource scarcity to some extent by minimizing resource utilization and promoting substitutes, it does not completely resolve the problem. The essay distinguishes between exhaustible, non-exhaustible, renewable, and non-renewable resources, emphasizing that while technological progress can extend the availability of resources, the ever-increasing demand and consumption associated with economic growth ultimately lead to resource depletion. The author concludes that economic growth can only buy time for finding substitutes and that technology is the key factor in addressing scarcity. Therefore, economic growth does not fully resolve the problem of resource scarcity; it only mitigates the issue to some extent.

Running head: ECONOMICS
Economics
Name of the Student
Name of the University
Author Note

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Introduction
Resource is the most important factor in any economy. Production of any goods and
services depends on the availability of the necessary resource. More is the availability of
resources, more will be the number of goods and services. However, the amount of available
resources is limited and demand of people is unlimited. Thus, scarcity of resource is a severe
issue that hinders the world growth and therefore should be addressed properly. The
argument that economic growth mitigates the problem of resource scarcity is popular enough
and in this essay, the viability of the argument will be discussed.
Economic growth and scarcity
Economic growth is an important factor for an economy to flourish. An economy
grows only when its entire group of contributing factors develop over time. The main drivers
of economic growth are technology, infrastructure, capital, business productivity,
employment and standard of living (Kramin et al. 2014). All these sectors should grow
simultaneously to achieve a balanced economic growth. Now, the argument is why economic
growth is necessary to resolve the issue of resource scarcity. With technological advancement
in manufacturing sector, utilization of resources can be minimized to produce a good (Tan,
Chen and Liu 2105). In transport sector, with innovation in engine of vehicles consumption
of fuel can be reduced. Hence, these advancements in technology improve usage of available
resources and thereby decrease the possibility of resource scarcity. Productivity of machines
decreases the use and waste of resources and enables to produce more product by using same
quantity of resources. A resource scarcity can be easily identified with the increase in price of
product it is used to manufacture, there might be other reasons for price increase but scarce
resource makes the change permanently (Barbier 2013). On the other hand, capital
investment is of utmost importance to develop infrastructure required for research and

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development of new technology and production of efficient human capital (Ansar et al.
2016). Only a developed economy, which has reached its peak economically, can invest in
such factors. Improved and advanced infrastructure of an institute enables researcher to add
new inventions in the economy. An economy having excellent education system produces
efficient human capital that contributes to efficient production that reduces resource
utilization. Employing more such human capital grows an economy at a much faster rate.
Hence, more the economic growth more will be the technological and human capital growth
and less will be the resource utilization (Audretsch, Lehmann, and Wright 2014). In long run,
usage of resource will be minimized and resource scarcity might resolve.
In the above discussion, the influence of economic growth on resource utilization and
scarcity mitigation has been discussed but the argument differs with different types of
resource. There are several types of resources such as exhaustible, non-exhaustible,
renewable and non-renewable. Petroleum, coal and other fossil fuels are all exhaustible
resources (Robinson 2017). Solar energy and wind energy are non-exhaustible resources and
water is a renewable resource. However, solar energy cannot be used fully because it is an
indirect source of resource. It can be used only by converting it to electricity and that requires
solar plates and resources to manufacture it are limited. The population of the world is ever
increasing and the demands for goods are increasing as well but the resources are limited
since the ancient times and decreasing with passage of time (Dawadi and Ahmad 2013).
Hence, technological progress and economic growth may minimize the resource use per unit
of good produced and this will only increase the number of years of availability of a
particular resource. On contrary, economic growth increase the consumption of people, that
means demand for goods and services will increase and even if with minimum resource use
per unit of goods and services absolute use of resource will increase. Thus, limited resources
will definitely be depleted completely, only the time of availability can be extended. The

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most visible example of limited resource is land, with increasing population, demand for
housing is increasing and percentage of vacant land is decreasing. In the case of renewable
and recyclable economic growth will play vita role because with technological advancement
only improved way of recycling and renewing can be developed that will increase extraction
of resource from the waste. However, the amount of resource used should be equal to the
amount of product produce and generated recyclable waste otherwise; there will be less
renewable resource in future.
Therefore, economic growth cannot fully resolve the problem of resource scarcity. It
only can mitigate the issue to some extent. As demand is unlimited and uncontrollable,
depletion of resource is inevitable; however, the degree of economic growth can only
increase the time of resource availability. The resources can only be saved by finding
substitutes only (Tietenberg and Lewis 2016). For example, invention of electric cars and
their introduction in transport industry will reduce the consumption of petrol and diesel and in
future it is possible that fuel consumption comes down to zero. Moreover, substitution should
be made with those resource factors only that can be produced infinite times.
Conclusion
The above discussion leads to the conclusion that the economic growth does not
completely resolve the problem of resource scarcity; it only mitigates the issue to some
extent. Technology is the key factor that actually helps the situation of scarcity and research
and development for technology requires economic growth. However, economic growth
cannot recover the depleted limited resources but can make it available for a longer period by
minimizing its use and enables the economy to develop substitute for resources.

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References
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to economic growth or economic fragility? Evidence from China. Oxford Review of
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Audretsch, D.B., Lehmann, E.E. and Wright, M., 2014. Technology transfer in a global
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Barbier, E.B., 2013. Economics, Natural-Resource Scarcity and Development (Routledge
Revivals): Conventional and Alternative Views. Routledge.
Dawadi, S. and Ahmad, S., 2013. Evaluating the impact of demand-side management on
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environmental management, 114, pp.261-275.
Kramin, M.V., Safiullin, L.N., Kramin, T.V. and Timiryasova, A.V., 2014. Drivers of
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Tan, Z., Chen, K. and Liu, P., 2015. Possibilities and challenges of China׳ s forestry biomass
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