“Precious” metals: The case for treating metals as irreplaceable

Non-renewable resources, including metals, minerals, and fossil fuels, are being consumed at ever-increasing rates. Only a small proportion of this consumption of natural capital is being converted to other forms of durable human capital; the majority, especially of fuels, is being consumed unrecoverably. Worse is the fact that the majority of the benefits from this consumption accrue inequitably, not only between the developed and developing world, but also within these worlds where income disparity is increasing dramatically.One solution to the problem of non-renewable resource depletion is to change the valuation of these materials, such that their prices reflect fully internalized costs plus the “cost of replacement.” Given that non-renewable resources are irreplaceable, this latter cost should be set high enough to encourage extensive conservation through recycling and reuse. A place to start in revaluing non-renewable resources such as metals is through royalty rates on mined product. Currently, royalty rates are very low, and are often charged only on profits. I propose that minimum royalty rates on revenues should be set by international agreement, and that these rates should be slowly increased over several years to allow markets time to adjust. In this way, consumers would be made directly aware of the irreplaceable value of minerals and metals, leading to a change in usage patterns, and the benefits of resource extraction would be more equitably distributed to producer nations. Ensuring that these new revenues are actually invested back into society as sustainable development requires a commitment to quality governance.