Press Release: The world is not running out of resources after all, says new report

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07584 778207

  • The world is not running out of valuable minerals; claims from environmentalist groups are based on a misunderstanding of industry terminology.
  • Reserves are only a measurement of the minerals we know we can mine and make usable in the near future. Mineral reserve numbers have nothing to do with how much of the actual element can eventually be recovered.
  • The reserves for minerals used in fertilizers, such as phosphate and potassium, may exhaust in the next few decades, but the exhaustion of resources is not estimated to occur until 1,000 - 7,000 years time.

The depletion of mineral reserves poses no serious threat to society, a new monograph published today by the Adam Smith Institute has concluded.

The No Breakfast Fallacy: Why the Club of Rome was wrong about us running out of resources” argues that outcries over resource availability from environmentalist groups are based on a misinterpretation of numbers and a misunderstanding of what mineral resources actually are.

The monograph, written by Adam Smith Institute Senior Fellow and rare earths expert Tim Worstall, says that groups that have warned about the world running out of rare mineral resources, such as The Club of Rome, have been using the wrong sets of data, mistaking the exhaustion of mineral reserves for the exhaustion of mineral resources.

Mineral reserves, the monograph explains, are simply the minerals that have been prepared for use for the next few decades; they are minerals that can be mined with current technology at current prices. Some reserves are going to run out in the near future, but this is a normal process. Every generation runs out of mineral reserves.

Mineral resources, however, refer to a concentration of minerals of a certain quality and quantity that have shown reasonable prospects for eventual economic extraction. These are much larger than mineral reserves.

Organic farming, for example, may be a useful idea, the monograph asserts, but the idea that it is a necessity because we’re about to run out of inorganic fertilisers is based on a falsehood. The reserves for minerals used in fertilizers may exhaust in the next few hundred years, but the exhaustion of resources is not estimated to occur for 1,400 years for phosphate and 7,300 years for potassium.

The report concludes that efforts to conserve and/or recycle mineral resources are wasteful and often end up being net harms to society, by diverting economic activity from more productive uses.

Senior Fellow at the Adam Smith Institute and author of the report, Tim Worstall, said:

We have a basic problem in our discussion of resource availability. Which is that most of the people in that discussion are grievously misinformed about what a resource is and how much of any of them we might have. It really is true that Paul Ehrlich, Jeremy Grantham, the Club of Rome, Limits to Growth and the rest are looking at the wrong numbers when they consider how much of any mineral or metal there is that we might be able to use.

This is not some arcane economic point. It is not some mystery explained only to the illuminati. Quite simply, most people assume that mineral reserves are what we have left that we can use. This is not so: mineral reserves are only what we have prepared for us to use in the next few decades. As such, it's really no surprise at all that mineral reserves are generally recorded as being going to last for the next few years.

This book explains this simply enough that even a member of the Green Party should be able to grasp the point. We are no more going to run out of usable minerals because we consume mineral reserves than we are to run out of breakfast because we eat the bacon in the fridge.

Notes to editors:

For further comments or to arrange an interview, contact Kate Andrews, Head of Communications, at kate@adamsmith.org | 07584 778207.

To download “The No Breakfast Fallacy: Why the Club of Rome was wrong about us running out of resources”, click here.

The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Press Release: Osborne's balanced budget law will bring sanity to public finances

For further comments or to arrange an interview, contact Head of Communications Kate Andrews: kate@adamsmith.org | 07476 915072 Commenting on the Chancellor George Osborne's Mansion House speech, Director of the Adam Smith Institute Dr Eamonn Butler said:

The rest of us have to live within our means, so why shouldn't government? Politicians used to have to raise taxes to pay for their expensive schemes. Then they used the inflation tax. Now they have discovered that they can pass their bills on to the next generation, by borrowing. That is not just bad economics. It's immoral.

A balanced budget rule is the only way to keep politicians' spending remotely under control. We've seen in recent years that politicians will use any opportunity to spend more, and even 'austerity' rarely ends up cutting spending in real terms.

Sound monetary policy can stop the economy from falling into depression. Government spending won't protect us from economic catastrophe, but it will drive up our debt bills and make us all poorer in the long run. Osborne is right to push for surpluses when the economy is healthy - we should all make hay while the sun shines.

Notes to Editors:

The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.

Sam Bowman's comments on ring-fencing banks feature in the IBTimes

Deputy Director of the Adam Smith Institute Sam Bowman's comments on the financial crisis and the problems with ring-fencing banks featured in the International Business Times:

Sam Bowman, deputy director, of the Adam Smith Institute, told IBTimes UK: "Ring-fencing is a terrible idea. For a start, the financial crisis was caused by investment-only banks [Bear Stearns, Lehman Bros, Merrill Lynch], not banks with both investment and retail arms. So ring-fencing would not have prevented the crisis."

It is possible to argue that banks are more robust the more diverse their operations are. For instance, during the Great Depression, the US's restrictions on interstate banking were very harmful. Banks had all their eggs in one basket and thousands of US banks failed, whereas none of Canada's half-dozen banks, which operated nationally, collapsed.

Since the Conservatives have won the election and regulation is not required as political expediency per se, the City has been hoping for an end to "banker bashing". The situation with HSBC only makes this more acute.

Bowman added: "The HSBC cuts are a sign that we can't take the financial sector for granted; yes, we have friendlier regulations than most, and it's unlikely that the whole City will up sticks and leave, but at the margin the government can have an important impact on investment and jobs in the UK.

"I do hope we stop getting so much banker bashing, mostly because that adds uncertainty to the financial system. Even if Osborne does not intend on imposing more punitive regulations and/or taxes on bankers, there is rhetoric that suggests he might confuse markets and make financial firms less likely to invest in the UK," he said.

Read the full article here.

Sam Bowman's comments on the LIBOR funds feature in the The Times and the Wall Street Journal

Deputy Director Sam Bowman's comments on the use of LIBOR funds have featured in The Times and the Wall Street Journal: From The Times:

More than £450 million has been allocated, but not everyone is happy. “I am actually a descendant of people who were in the Battle of Agincourt,” Sam Bowman, deputy-director at the Adam Smith Institute, an economic think tank, said. “Using bank fines this way degrades the whole point of the budget and Treasury, which is to spend money on the needs of the country, not a £1 million commemoration of a battle that happened 600 years ago.”

Read the full article here.

From The Wall Street Journal:

“I am actually a descendant of people who were in the Battle of Agincourt,” says Sam Bowman, deputy director at the Adam Smith Institute, a libertarian think tank in London. “But using bank fines this way degrades the whole point of the budget and Treasury, which is to spend money on the needs of the country, not a £1 million commemoration of a battle that happened 600 years ago.”

Read the full article here.

 

Tax Freedom Day has come: You’re finally working for yourself | Kate Andrews writes for City AM

Head of Communications Kate Andrews writes on Tax Freedom Day for City AM:
Congratulations – you, and the rest of the UK, have collectively paid off your taxes for the year, and it only took you 150 days to do it.
Every year, the Adam Smith Institute calculates Tax Freedom Day – the first day of the year when the average person stops working for the government and starts earning for themselves. This year, that was yesterday, 31 May.
Of course, there is no “average earner”. Lower earners will hit this landmark much earlier in the year, while many higher earners will be taxed for weeks more to pay off their bill. But our calculations measure the entire tax take. So even if you exclude the variability of direct taxes like income and National Insurance contributions, we are all still burdened by day-to-day taxes, like VAT, and stealth taxes that keep prices high throughout the year, like air passenger duty.

Read the full article here.

The ASI calculates Tax Freedom Day by measuring local taxes, direct and indirect national taxes, and national insurance contributions as a proportion of the UK’s net national income (41.2% per cent in 2015), mapping that proportion onto the days of the year.

Tax Freedom Day figures are not available up-to-date for calendar years so they are proxied from government and OBR forecasts and financial year numbers. They are then revised when exact numbers become available.

Click here for more information on previous Tax Freedom Days and Cost of Government Days.

Tax Freedom Day calculations feature in City AM

The Adam Smith Institute's Tax Freedom Day calculations feature in two City AM articles:

THE AVERAGE worker has spent the entire year until yesterday working for the government, and only now will earn for themselves, according to a study from the Adam Smith Institute.

Its Tax Freedom Day report studies the government’s overall tax take, including charges on spending as well as income, and uses the calendar year to illustrate how much revenue the Treasury takes each year.

Read the full article here.

The average British citizen works for 150 days of the year solely to pay their taxes, according to the Adam Smith Institute, organisers of Tax Freedom Day.

The UK's Tax Freedom Day fell on 31 May this year, one day later than it did in 2014. It is calculated by the Adam Smith Institute, and marks how many days of the year British residents would need to work just to pay their taxes.

It is based on the money raised by HM Revenue and Customs - including direct taxes like income tax and national insurance, as well as indirect taxes such as VAT and excise duties.

Read the full article here.

The ASI calculates Tax Freedom Day by measuring local taxes, direct and indirect national taxes, and national insurance contributions as a proportion of the UK’s net national income (41.2% per cent in 2015), mapping that proportion onto the days of the year.

Tax Freedom Day figures are not available up-to-date for calendar years so they are proxied from government and OBR forecasts and financial year numbers. They are then revised when exact numbers become available.

Click here for more information on previous Tax Freedom Days and Cost of Government Days.