SERAFIAN QUASI-SUSTAINABILITY RULE OF
NON-RENEWABLES
The Serafian rule pertains to non-renewable resources, such
as fossil fuels and other minerals, but also to renewables
to the extent they are being mined. It states that their owners
may enjoy part of the proceeds from their liquidation
as income, which they can devote to consumption. The
remainder, a user cost, should be reinvested to produce
income that would continue after the resource has been
exhausted. This method essentially estimates income from
sales of an exhaustible resource. It has been used as a
normative rule for quasi-sustainability, whereby the user
cost should be reinvested, not in any asset that would
produce future income, but specifically to produce renewable
substitutes for the asset being depleted. The user cost
from depletable resources has to be invested specifically
in replacements for what is being depleted in order to
reach sustainability, and must not be invested in any other
venture – no matter how profitable. For non-renewable
energy, a future acceptable rate of extraction of the nonrenewable
resource can be based on the historic rate at
which improved efficiency, substitution and re-use became
available. These calculations show the folly of relying on
technological optimism, rather than on some historic track
record