| Abstract: | Increasing attention is being given to the possible consequences which might follow from the exhaustion of the world's natural resources. Countering the pessimistic conclusions of such institutions as the Club of Rome, economists such as Wilfred Beckerman have emphasized the importance of substitution, pointing to many examples where a shortage of one raw material has led to the discovery or development of alternative materials, e.g. artificial for natural rubber, aluminium for copper.Substitution usually occurs through normal market mechanisms, i.e. changes in relative prices. However in some circumstances the market mechanism may be inhibited by a variety of factors, so that its operation requires to be supplemented by an outside agency. This article explores this possibility in relation to the paper making industry, which provides a particularly interesting example owing to the existence of a well established market in waste paper, the main substitute for the major natural resource, woodpulp.A brief indication is given of the relative importance of waste paper and an outline of the structure of the U.K. market; the conditions under which greater utilization of waste paper might occur are then considered taking a sideways look at the influence of the individual. In the final section the various implications for the role of the state are summarized. |
