Resources that do not run out — My Conversation with the Co-Chair of the International Resource Panel.
Recently on my podcast, I hosted Dr Janez Potočnik who has been a prominent voice and strategist in the path to development of circular economic business principles in the European Union and around the world.
He is a former government minister of the Republic of Slovenia and became a Member of the European Commission in May 2004. From 2010–2014 he took on a second mandate as Member of the European Commission responsible for Environment. The mandate ended November 2014.
In 2014 he was appointed as a Co-Chair of International resource Panel hosted by United Nations Environment Programme, and it is from this experience that I discussed what we can be doing differently with him. The below is an outline of our conversation.
Outline of the challenge
The International Resource Panel co-chaired by Janez recently released the global resources outlook, a comprehensive study of resource management.
The report reveals that global resource use has more than tripled in the last 50 years.
Global material demand per capita grew from 7.4 tonnes in 1970 to 12.2 tonnes per capita in 2017, which means almost doubling in the last 50 years.
This suggests the majority of the “tripling” could be devoted to economic growth, and to a lesser extent, to the population growth, which is, of course, also important, but there is more to the story.
Material productivity (the efficiency of the use of materials, comparing to the unit of GDP) has been growing steadily to the year 2000 until it began to decline globally due to certain shifts of the production from countries which were more resource efficient, like European Union, Japan, to the countries which were less resource efficient, like for example, Indonesia, China, India, and others.
We currently need more resources or more materials per unit of GDP than we needed two decades ago, which is an interesting phenomenon.
It suggests that how we produce needs to be examined from a comprehensive lens, and not just cost, but also consider the environmental impacts in the value chain in the resource extraction and processing phase alone. The report found that more than 90% of global biodiversity loss and land related and water stress can be related to the use of the biomass contributing more than 80%.
Furthermore, 50% of global climate change impacts can also be explained through the environmental impacts in the resource extraction and processing phase and even one third of the air pollution health impacts.
To bring this home. If you are buying your car, parking it for its lifecycle without ever using it, you will already be causing one third of the pollution, because the resources need to be extracted and the car needs to be produced and that production and extraction of resources is already creating pollution.
Add into that picture the expected global population growth expected to be 9.7 billion at the middle of the century. This means that in one year on the planet we will have the additional population of Germany, and in four years the additional population of the United States of America.
This growth is happening in the least developed parts of the world who by right esteem to the same quality of life enjoyed in the US or within the EU.
The pressure on the use of natural resources in the future will be enormous, driving us to redesign our economies so that we may be more resilient. The Club of Rome shares that we moved from an empty world dominated by labour and infrastructure to a full world where our wellbeing now depends on how well we treat the environment.
In this context, we need to rethink the signals we are sending to the markets, because those signals currently say that we do not value resources, building up a debt with future generations.
The Politics of change
In politics time is needed, as well as a critical mass of support and understanding before changes take place and new more relevant policies become reality. The big issue facing corporations and governments is this idea of stranded assets, and the extent to which this will have an impact as we pivot away from them.
Yet, it is also key that we all understand the seriousness of the challenges facing us. The governance matters. For the first time in human history, we are the generation living in socio ecological space of planetary scope. We are so interconnected, interdependent that our fragility is very high, and which is also raising the importance of our individual and collective responsibility.
This does not even cover climate change, which has a material global impact, only that impact appears more distant, so it is harder to gather the critical mass for a reaction. If we want to reach the right decisions, then we must connect those who were responsible to solve the problems with those who have the instruments for a solution in their hands. There is a need for more co-operation across these goals, and across the interests of multiple stakeholders and complex and interconnected issues.
As for the circular economy, from a European perspective the union is vulnerable as it is a net importer of the natural resources; energy for example, so conserving resources and moving into the circular economy is a logical choice, and a competitive one, considering the economics. The unsustainable irrational or irresponsible use of natural resources is a major contributor to climate change, biodiversity loss, and air pollution.
Our Role as Consumers
Behaving in a responsible way, is our obligation, and has always been, although it has become more obvious and visible now. Getting consumers on board using market signals is key. We live in market economies, and consumers and producers are acting on market signals which do not price in the negative externalities. As a result, items that are by design healthier and more sustainable, have the appearance of costing more, which sends the wrong signal to both producers and consumers.
Defending the public interest through the regulation and public funding is creating confusion of producers and consumers in the market, particularly with the strength of the political lobbying. The cost of the public interest needs to factor in the market mechanics.
Nature has intrinsic value, and as such it seems counterintuitive to assign a cost to it, but if we do not assign a cost, we do not assign a value. This is no longer a distant future. In our lifetimes, we will experience much more dire consequences of failing to act. If you look to the data, on climate impact, biodiversity, pollution, health, it is not difficult to conclude that something is wrong. We have a moral obligation to evaluate these effects better and integrate them into the system guiding our lives or change the system.
Leveraging varying abilities to respond
Our ability to transition effectively to sustainability will fly or fall on the strength of our action on the social part of the story. There is currently so much inequality that it is practically impossible to talking about a full cost system without taking care of those who do not have access to food. The vicious circle can only be unlocked if we start seriously and sincerely dealing with the social part of the questions.
As we look at major players in our global market economy exploring colonization of the moon and mars on the premise that we can source minerals or carry out some of our more harmful processes there is not convincing. Exploration and curiosity guide the human spirit, but we first have a responsibility to the one earth we know we can save.
Tune into the episode here.