Mineral deposits are non-renewable; they do not grow in the ground.
Sustainable use of finite mineral wealth requires that revenues from
mineral extraction be invested in renewable wealth, education and
infrastructure, machines and other production equipment, or in financial
assets. Different countries, states and provinces have done so with a
varying degree of success. Investing for Sustainability: The
Management of Mineral Wealth highlights mineral rents investment funds
in Norway, Alaska and Alberta, all of which derive considerable revenues
from the production of petroleum bound to diminish over time. The book
examines the institutional and political framework in which these funds
are embedded and how successfully they have been used for making
non-renewable petroleum wealth permanent.
Investing for Sustainability: The Management of Mineral Wealth begins
with a discussion of the elusive concept of sustainability. New
technology and substitution has made a resource like peat obsolete long
before it became exhausted physically. Jevons' famous book "The Coal
Question" is discussed at some length as a case of unwarranted concern
about the depletion of resources. The book also highlights other cases
which strike a less happy note. Nauru, one of the smallest sovereign
states in the world, has for decades lived off phosphate resources that
are now running out. Nauru attempted to make its phosphate wealth
permanent through investment funds but failed.
Despite its success with its Permanent Fund, less of the oil wealth of
Alaska has been made permanent than would appear warranted, and the same
is true of Alberta and Norway. Judging from the experiences of the three
funds, and the current political debate in Norway, Investing for
Sustainability: The Management of Mineral Wealth suggests that it is
essential that the citizenry at large benefit directly from mineral
rents investment funds if they are to succeed.
