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Funds and stocks

While conventional economics tries to approach natural resources through monetary means, ecological economics stresses the need to make the biogeochemical characteristics of resources explicit. This allows for a distinction between the ecological and economic potential of resources, with respect to growth and sustainability for instance. Given the radically different characteristics of resources, erroneous conclusions tend to be drawn when they are conceptualized as undifferentiated ‘natural resources’.

Nicholas Georgescu-Roegen (1971) proposed a fundamental distinction between funds and stocks of natural resources:

• Funds, such as wood or fish, built up and maintained by solar radiation are able to renew themselves and provide both ecological and economic services, as long as the conditions necessary for their renewal are met. Soil fertility is also a fund as nutrients are replenished.

• Stocks, such as oil or copper, constitute limited reservoirs of organized matter and mineralized energy resulting from biogeochemical processes on a geological (and not an historical) time scale, but from which it is possible to extract flows of energy-matter. These flows can only be exploited for a relatively short period of human history, leaving stocks depleted and the environment degraded by their dissipation of energymatter. Stocks correspond to non-renewable resources.

This distinction between funds and stocks sheds light on their different economic potentials (Georgescu-Roegen, 1971; Steppacher and van Griethuysen, 2008). The growth potential of living or biotic resources –funds – is naturally limited and therefore, cannot fuel exponential economic growth. However, the limited capacity of biotic resources to supply economic growth is compensated for by the quality of being renewable. The lesson is: limited growth yet potentially sustainable.

The case of non-renewable mineral resources – stocks – is quite different. Since the industrial revolution, mineral resources have been capable of inducing exponential growth: stocks of energy-matter can be used to develop machines and motors that allow an even quicker exploitation of stocks. However, as the process quickens, stocks get irreversibly depleted at an increasing pace while natural assimilation capacities are overloaded. Fuelled by the limited stock of mineral resources in a limited natural environment, exponential economic growth is inexorably limited to a given historical period. The lesson is: exponential growth without sustainability.

The distinction between services of funds and flows of stocks highlights the specific temporal characteristics of different natural resources. Given that biotic resources depend on ecological reproductive cycles, the availability of their services is subject to the natural calendar. It is therefore not possible to exploit these funds (land, labour and equipment) to their full capacity. That is why economic activities in traditional agrarian economies are diversified and organized in accordance with the cyclical rhythms of nature. On the other hand, the flow of mineral resources from stocks does allow continuous productive activity. This characteristic which reduces costs and makes specialisation possible is an essential element of industrial production.

Given the institutionalized growth dependency of Western civilisation, it is not surprising that nearly all technological progress over the last 150 years has been based on the substitution of renewable by non-renewable resources, in industry, agriculture and services alike. Modern agriculture now uses fossil fuels energy to a great extent, so that if we make the balance between energy output and energy input in the agricultural and food system of industrial countries, we have a declining EROI. An activity that was sustainable is now unsustainable.

In such a context, an undifferentiated concept of natural resources is highly problematic owing to the fact that the per capita consumption of fossil fuels mineral resources is very unequally distributed. This failure to differentiate hides the economic privilege that goes with control over mineral resources and fossil fuels (in rich industrialized countries) as well as the particular difficulties that are inherent in the use of biotic and other renewable resources, particularly in combination with high population growth (in poor agricultural countries).


Georgescu-Roegen, N. (1971) The entropy law and the economic process. Cambridge, MA, Harvard University Press.

Steppacher R and P. van Griethuysen (2008) The differences between biotic and mineral resources and their implications for the conservation-climate debate. Policy Matters, 6, 30–37.

This glossary entry is based on a contribution by Julien Francois Gerber

EJOLT glossary editors: Hali Healy, Sylvia Lorek and Beatriz Rodríguez-Labajos

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