Resource economics is a subdivision of economics dealing with the scarcity of the Earth’s natural resources, particularly how it relates to humans’ uses of those resources. This subject deals not only with use, but also sustainability of those resources. Thus, this field of economics is particularly interested in those fields which take resources from the Earth, whether renewable or non-renewable.
One of the fundamental rules of any economics discipline is the question of trade-offs. The assumption exists that we will always want more than we can have and gaining something naturally means we are doing without something else. Thus, there is a trade-off. However, resource economics often takes a slightly different look at trade-offs.
Resource economics does not suggest that we are using using natural resources at the expense of using or gaining another natural resource, in most cases. Rather, the theory posits we are using these resources at the expense of future generations. Therefore, the question relates to how can we sustain those natural resources, yet find a solution that is also socially and economically satisfying.
To help find that answer, resource economics looks at a number of different areas. It looks at sustainability. How much of a material can we use and reasonably expect it to be there for future generations? However, this theory only applies to renewable resources. Using coal, for instance, means it is, for all intents and purposes, gone forever because it takes millions of years to replace. In those cases, resource economics asks how much coal can be used without placing on undue hardship on others, such as future generations. This assumes other energy sources become available in the future. Some of these questions are not easy to answer.
However, it should be noted that while resource economics deals greatly with future trade-offs, this is not entirely to the exclusion of current trade-offs. For example, exploiting coal is a current trade-off in that the land that could be used for natural beauty and recreation is being strip mined for something else. This is a natural trade-off, or opportunity cost, in economics.
Agriculture is often included as a portion of resource economics. Agricultural sustainability is very important, as poor land management of such resources can lead to the eventual degradation and uselessness of it. Therefore, using land to a point where it can no longer support viable crops is a concern that resource economics tries to address. It may do this by pointing out certain management practices that may cost more in the short term, but can produce long-term benefits that would cost much more to achieve in future years.