2.6.3 Economic Theory of Sustainable Development vis-à-vis Mineral Resources
Under the sustainable development premise society's total capital stock is divided into Man-made Capital, Human Capital and Natural Capital. Sustainable development calls for maintaining all the three forms of capital. But, non-renewable capital resources can only be diminished through use. Thus mining projects must be paired in some way with a project that develops the renewable substitute (Daly 1994). Sustainable development requires limiting the rate of use of minerals to the rate at which renewable substitutes to them are developed (Meadows et al. 1992). The ongoing debate on sustainable development pivots on the possible substitutability of reproducible capital for natural capital. Daly (1994) recommended that the various forms of capital be considered complimentary and only weakly substitutable.

Economists attempt to internalise the mineral depletion cost and the environmental cost. The capital value of mineral can be maintained for future generations by saving and re-investing capital depletion rather than consuming it (Mikesell 1994). Therefore proceeds from mineral resources should be divided into two components.

1. The conversion of natural capital to economic capital which must be re-invested in a renewable substitute.
2. The income component. The re-investment in renewable capital should be such that when the non-renewable capital is exhausted the yield from the accrued renewable capital stock becomes equivalent to the income component of the exhausted resource stock.

The above position, which allows substitutability of natural exhaustible resources by man-made or natural renewable resources, is in fact a shift from strong sustainability to weak sustainability. This requires a constant vigil to ensure actual substitution.

2.6.4 The Input Output Rule of Environmental Sustainability for projects dealing with non-renewable natural resources
While the output rule would continue to emphasise upper limit of waste generation to be within the assimilative capacity of the surrounding environment, the input rule should be changed as below: -
A non-renewable resource should be depleted at a rate that is less than, or at best equal to, the rate at which renewable substitute for the non-renewable resource may be generated through human invention and intervention. A portion of the proceeds from the non-renewable stock depletion, - representing conversion of non-renewable capital to other form of capital -, should be invested in pursuit of sustainable substitutes.

The emphasis on maintenance is essentially to fulfil the intergenerational equity aspect of sustainability, which can be ensured only through maintenance of non-declining 'wealth' per capita. While wealth is difficult to measure the above definition of environmental sustainability emphasises maintenance of two fundamental environmental series - the source and sink functions.

Goodland (1994) suggested the following basic conditions for environmental sustainability -
1. Maintenance of man-made capital (e.g., artefacts, infrastructure) per capita.
2. Maintenance of renewable natural capital (e.g., healthy air, natural forests, oceanic fish stocks) per capita.
3. Maintenance of non-renewable substitutable natural capital per capita, with capital values based on the value of the services of the present stock of natural capital. This means that if the cost of supplying energy substitutes rises, sufficient capital must be accumulated to maintain these services.
4. Maintenance of non-substitutable, non-renewable natural resources (e.g., waste absorption by environmental sink services). No depletion or deterioration of non-substitutable non-renewable natural capital. This derives from the output rule of environmental sustainability: no net increase in waste emissions beyond absorptive capacity.
5. All economic consumption should be priced to reflect full cost of capital depletion, including waste creation, the cost of which is equal to the cost of reducing an equivalent amount of that particular waste.
6. Stating the conditions in per-capita terms calls attention to the importance of stopping population growth. Theoretically, the per-capita stock of all kinds of capital could remain constant as long as the stocks grew at the same rate as population. But in reality the rate of growth of population and stocks of physical wealth must move toward zero.