Solos View of Natural Resources
Some natural capital, like coral reefs, has value in their ecosystem services that cannot be reproduced by human capital and cannot be substituted. Intergenerational equity cannot be achieved because future generations cannot benefit from the coral reef’s ecosystem services if the coral reef no longer exists.
If a coral reef is destroyed, a village could develop the skills and knowledge to farm, thus ensuring future generations with a replacement food source. However, if their farming practices are not sustainable, the natural resource, soil, could become infertile, thus causing the village to develop a new way to feed themselves and future generations. Also, if there is not enough diversity in the crops, a disease could wipe out what was planted and cause famine, like late blight did to potato crops in Ireland. As natural resources are depleted, the options for future generations will become fewer and fewer.
There is no guarantee new technologies and new physical capital will be as reliable and widely available as natural resources are. As an extreme example, let’s say the current generation depletes many of the natural energy sources (coal, natural gas, and crude oil (used to make kerosene)). Much like the electric car is replacing gas cars today, electric heat would replace natural energy heat. However, if the electrical grid went down in the middle of winter, those who could once use a kerosene or gas furnace as backup, would no longer have that option available and the results could be devastating. Electricity can be a sufficient replacement for coal and other natural energy sources; however, we should not limit the options available to future generations by depleting the natural resources available to us for our own gain. I disagree with Solow, (1974) because created resources are not always interchangeable with natural resources in terms of satisfying human wants and needs.