1932

Abstract

The extent to which natural capital can be substituted with manufactured or human capital in production is a key determinant of the possibility of long-run sustainable economic development. We review empirical literature pertaining to the degree of substitutability between natural capital and other forms of capital. We find that most available substitutability estimates do not stand up to careful scrutiny. Moreover, accurate substitutability estimates are even more difficult to produce for unpriced or mispriced resources. Finally, we provide evidence from industrial energy use, and agricultural land use, that suggests substitutability of natural capital with other forms of capital may be low to moderate.

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2019-10-17
2024-04-15
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