Thursday 12 May 2011

Humanity can and must do more with less: UNEP

Today the United Nations Environment Programme (UNEP) launched a new report on decoupling economic growth from natural resource use and environmental impacts.

The press release says:

Already the world is running out of cheap and high quality sources of some essential materials such as oil, copper and gold, the supplies of which, in turn, require ever-rising volumes of fossil fuels and freshwater to produce.
When it comes to oil, the report says:
Oil production has already peaked and declined in the majority of individual oil producing nations, and in large regions such as North America and Europe (Hirsch, 2008). Thus ‘peak oil’ is an empirically verifiable phenomenon (Sorrel et al., 2009, p.vii). Evidence suggests that the world is rapidly approaching a world oil production peak. Global new oil discoveries reached their height in the 1960s and have been on a declining trend ever since (see Figure 2.10), despite remarkable improvements in exploration, drilling and extraction technologies, and episodes of high prices in the 1970s and 2000s (ASPO, 2009).
Several scenarios are covered in the report, but the key point made is that 'business as usual' cannot continue - there simply isn't enough raw material on the planet for that to happen, whether that's oil, gas, metal ores or topsoil. One scenario considered includes a contraction in resource use by developed countries of two thirds, while other countries remain the same. The report acknowledges that this scenario is so restrictive that no politician will ever accept it as a goal, yet it would still leave CO2 emissions at the same level as in 2000, not to mention the resources needed - which simply won't be there.

A few challenges are identified in the press release that relate to the oil debate:
  • Policymakers and the general public aren’t yet convinced of the absolute physical limits to the quantity of resources available for human use.
  • The best and most easily accessible mineral ores and fossil fuels are being exhausted. New sources are generally more remote and of lower quality. Finding and extracting them takes more energy and increases the environmental impact. About three times more material needs to be moved for the same ore extraction as a century ago, with corresponding increases in land disruption, water impacts and energy use.
  • Resource extraction increasingly occurs in countries with lower legal and environmental standards, meaning “environmental impacts per unit of extracted material might become more severe.”
  • A “rebound” effect often leads to increased consumption after energy or manufactured goods become more efficient as consumers take advantage of cost savings to buy something else, or use a device more often – for example: putting more kilometres on a fuel-efficient car.

There are two key issues that come out of it for me:

1. Economic growth cannot continue in the long run. The report does mention this in a roundabout way, but what it comes down to is that if people get more wealthy they consume more resources, whether it’s a larger house/car, eating more meat, going on more holidays, etc. This clearly isn’t possible with finite resources, as the report makes clear. However, this doesn’t mean we can’t redistribute what we have globally, and within nations, to deal with poverty. It’s a hard one for a politician to sell though!

2. The second point isn’t mentioned in the report. It is that if global economic growth (in a physical sense) cannot continue, then our system of money will break down at some point. This is because debt needs interest paying on it, and the money to do this can only come from growth. If we have economic growth in a financial sense without any growth in a physical sense, that’s just inflation, and the money system still falls apart eventually. There’s an excellent video covering this topic here. Once again, it’s not a topic that’s easy to convince voters on, even if it is an inevitability that we will have to shift (or collapse...) to a new system of money at some point. There are a lot of vested interests that will be hurt by the shift/collapse when it happens. I suspect this is part of the reason commodity prices in general are so strong – people with money to invest are realising that their money is safer in ‘stuff’ then cash or stocks.

As Mark Twain said
"Buy land. I hear they're not making it any more."
...but make sure it's well above sea level and not too far from home, given the contents of this UNEP report!

The full report will be available for downloaded here soon.

Mike

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