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Natural Resources

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Natural resources are naturally occurring features or characteristics of the environment. Natural resources often have significant commercial value. For example, mineral deposits and stocks of edible fish support entire industries. An important legal distinction can be drawn between natural resources that are a feature of real property and those that are not. Examples of natural resources associated with real property include oil and gas reserves and stands of timber. Other natural resources such as clean air that are not fixed to land are ordinarily not well associated with property rights. Economic theory says that private ownership of natural resources tends to produce efficient consumption because the profit motive imposes realistic pricing. In contrast, shared natural resources tend to be overused, even to the point of destruction. In economics, this tendency for exhaustion of public natural resources is called the tragedy of the commons. In accounting, the write-down of partially consumed natural resources is called depletion.



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