New Resource Productivity Opportunities Can Save World up to US$3.7 Trillion Annually and Protect Future Economic Growth – Study by International Resource Panel
Rapidly rising prices for metal up by 176 per cent, rubber by 350 per cent, and energy by 260 per cent since 2000 signal a potentially crippling trend of increasing costs as current consumption patterns rapidly deplete the world’s non-renewable resources, according to a new report released today.
Decoupling
2: Technologies, Opportunities and Policy Options, produced by the United Nations
Environment Programme-hosted International Resource Panel (IRP), says the
numbers demonstrate that the negative effects of unsustainable use of natural
resources are already being felt, further backing the argument with a rise in
volatility of food prices: 22.4 per cent from 2000 to 2012 compared to 7.7 per
cent from 1990 to 1999.
The report
says that harnessing existing technologies and appropriate policies to increase
resource productivity could save up to US$3.7 trillion globally each year and
insulate future economic growth from the harmful effects of resource scarcity,
price volatility and environmental impacts.
Many
decoupling technologies and techniques that deliver up to ten times more
resource productivity are already available, allowing countries to pursue their
development strategies while significantly reducing resource use and negative
environmental impacts.
The potential
to reduce energy demand through improved efficiency is around 50 to 80 per cent
for most production and utility systems. Some 60 to 80 per cent improvements in
energy and water efficiency are commercially viable in sectors such as
construction, agriculture, hospitality, industry and transport.
Advanced
furnace technology could achieve up to a 40 per cent reduction in energy
intensity for zinc, tin, copper, and lead smelting and processing. The report
argues that existing barriers to decoupling can be removed, notably subsidies
for energy and water use, outdated regulatory frameworks and technological
biases. Such policy change can create stable, successful economies over the
long term.
“The
worldwide use of natural resources has accelerated which saw annual material extraction
grew by a factor of eight through the twentieth century causing severe
environmental damage and depletion of natural resources,” said UN
Under-Secretary-General and UNEP Executive Director Achim Steiner. “Yet this
dangerous explosion in demand is set to accelerate as a result of population
growth and rising incomes.”
“Dramatic
improvements in resource productivity are a vital element of a transition to a
Green Economy that will lift one billion people out of poverty and manage the
natural resources required for the wellbeing of nine billion people by 2050,”
he added. “This requires an urgent rethink of current practices, backed by a
massive investment in technological, financial and social innovation.”
The report
builds on an earlier study, which warned that developed nation consumption
patterns and increases in population and prosperity will put humanity on track
to consume 140 billion tonnes of minerals, ores, fossil fuels and biomass per
year by 2050 unless economic growth is decoupled from resource consumption.
This is three times the levels of consumption in 2000, and most likely exceeds
all existing available resources and the limits of the planet to absorb the
impacts of extraction and use.
For example,
a shortage of some of the world's key metals may be felt within the next 50
years, affecting many industries; approximately 60 per cent of the ecosystem
services that support life on Earth have already been seriously degraded; and
global demand for water is expected to rise by 40 per cent so that in 20 years
available supplies will likely only satisfy 60 per cent of world demand.
By adopting
decoupling technologies, developing countries could cut their annual energy
demand growth from 3.4 to 1.4 per cent over the next 12 years, while meeting
their development goals. This would leave energy consumption some 22 per cent
lower than it would otherwise have been—a reduction equivalent to the entire
energy consumption of China today.
The report
shows that much of the policy design and technological knowledge needed to
achieve decoupling already exists. Many countries have tried them out with
tangible results, encouraging others to replicate and scale up such practices
and successes. For example:
·
The Rathkerewwa Desiccated Coconut Industry (RDCI) in Sri Lanka
cut 12 per cent off energy use, 8 per cent off material use and 68 per cent
off water use, while increasing production 8 per cent by changing its
practices. For a total investment of less than US$5,000, an annual financial
return of about US$300,000 was reported.
·
Industrial electric motors in China account for around 60
per cent of total electricity consumption. A pilot study at China’s
second-largest oil field found potential to save more than 400 million kilowatt
hours (kWh) of electricity per year, with recovery of the initial investment
achieved within 1.6 years. High-efficiency motors could save 28 to 50 per cent
of motor energy use, with a typical payback period of one to three years.
·
Cape Town in South Africa is conducting a 10-year traffic
signal upgrade programme, retrofitting 120 intersections per year with LED
lamps. The LED lamps consume almost 90 per cent less electricity than the old
lamps, yet produce the same lighting service. The programme is expected to save
US$2.9 million and 39,000 tonnes of CO2 emissions.
·
ArcelorMittal, the world’s largest steel company, estimates that
using higher-strength steel achieves a 32 per cent reduction in the weight of
steel columns and 19 per cent in beams. China and developing countries tend to
use lower-strength steel, meaning that even a partial global switch to a
higher-strength steel could save 105 million tonnes of steel a year and 20 per
cent of the costs of steel use.
·
In the United States, approximately 480 landfill sites,
representing around 27 per cent of the nation’s landfills, capture methane gas
released from decomposing organic waste. It is estimated that between 60 and 90
per cent of the methane in the landfill gas can be captured and burnt, which
would cut the estimated 1.8 per cent methane contributes to US total greenhouse
gas emissions.
·
Agriculture is responsible for 70 per cent of freshwater
withdrawals. In many countries, 90 per cent of irrigated land receives water
through wasteful open channels or intentional flooding. Farmers in India,
Israel, Jordan, Spain and the US have shown that sub-surface drip
irrigation systems can reduce water use by 30 to 70 per cent and raise crop
yields by 20 to 90 per cent. These technologies can be made affordable for use
in the developing world with payback periods of less than a year.
The report
provides more examples of savings that are being made in fossil fuels, paper,
cement, waste streams and chemicals, pointing to the potential to roll-out such
technologies across the globe and add up to the potential US$3.7 trillion
saving.
Currently,
however, many economies suffer from obstacles that lock-in existing patterns of
resource use.
Among these
obstacles are subsidies of up to US $1.1 trillion each year for resource
consumption, which encourage the wasteful use of resources; labour taxes rather
than resource taxes; regulatory frameworks that discourage long-term management
of resources; bias towards existing technologies; and institutional biases,
such as financial organizations avoiding investing in new technologies due to a
perception of heightened risk.
Facilitating
decoupling will involve removing these obstacles and creating the conditions
that enable widespread investments in resource productivity. The report
mentions two options, amongst others, which illustrate the type of combined
policy which is needed.
One proposal
uses taxation or subsidy reduction to raise resource prices in line with
increases in energy or resource productivity. For example, if the average
efficiency of the car fleet rises by one per cent in one year, a one per cent
price increase of petrol at the pump would seem fair and tolerable. This scheme
would induce car manufacturers and consumers to speed up efforts to reduce
petrol consumption or to avoid unnecessary trips.
Another
policy looks to shift revenue-raising onto resource prices through resource
taxation at source or in relation to product imports, with recycling of
revenues back to the economy.
Many
countries have put in place such policy mixes promoting decoupling. For
example, at European Union level, the 7th Environmental Action Programme and
the Roadmap to a Resource Efficient Europe and the Energy Efficiency Directive
of 2012 are long-term strategies moving energy, climate change, research and
innovation, industry, transport, agriculture, fisheries and environment policy
all towards decoupling.
The roadmap
makes the case for a shift from labour taxes to resource taxes, and discusses
the phasing out of environmentally harmful subsidies.
The IRP
report calls for such strong leadership to be instituted across the board, allowing
economic output to be achieved with fewer resource inputs, reducing waste and
saving costs that can further expand the global economy for years to come.
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