Thermodynamic implications for natural resource extraction and technical change in U.S. copper mining

Abstract

Motivated by the lack of integrated approaches that do justice to both the thermodynamic and economic aspects of natural resource use and the lack of empirical studies combining the two disciplines, this paper provides an integrated framework for the valuation of technologies, substitution and technical change. The paper determines empirically the relationships between thermodynamic states of materials and the use of high-quality energy sources for the case of copper mining in the United States. The empirical analysis provides the basis for a nonlinear dynamic simulation of optimal resource extraction and endogenous technical change in the light of changing resource quality. The study assesses the potential for future improvements in U.S. copper mining.