Despite the world’s voracious use of natural resources, we are not yet running out of them, as Flemmich Webb reports.
It says something of the vastness of the earth that, even after the West’s industrialisation and during Asia’s breakneck development, there are still vital minerals and hydrocarbons available to fuel economies and power nations. However, this is not always the perception. For example, every few years, commentators set a new date for peak oil — the point when the maximum rate of petroleum extraction is reached, after which the rate of production is expected to enter terminal decline.
The reality is that companies keep discovering new oil reserves — it is just in harder-to-reach places, such as the Arctic. As technology develops and oil prices increase, the economics of extracting this hard-to-exploit oil start to stack up. Canada’s tar sands exploitation in Alberta is a case in point — as oil prices rose to $90 a barrel, the business case for extraction became increasingly attractive.
Another example is phosphorus — a vital component of agricultural systems as they are dependent on continual inputs of phosphate fertilisers. There is currently no viable alternative, so no phosphorus, no mass food production. A 2009 report, Peak Phosphorus: the Sequel to Peak Oil, suggested that the year 2034 could be the peak, after which extraction rates would decline. Should the world panic?
Well, not just yet. A year later, the International Fertilizer Development Center produced an assessment of global phosphorus reserves, which increased the estimated reserves for Morocco and its disputed territory of Western Sahara by including previously overlooked geological reports from the 1980s. On the back of this, the US Geological Survey increased its estimate of accessible global phosphate rock reserves from 15 billion tonnes to 65 billion tonnes.
These two examples are part of a bigger, unclear picture of predicted shortages of many other critical resources, and the fluctuations in estimates of what remains of each means it is hard to say, equivocally, when peak points and shortages will occur. What is clear is that the world has mined, dug up, drilled and extracted much of the easier-to-reach natural resources. These days, it is more expensive to get them out of the ground, as they are deeper and in more inaccessible places, mine operating costs are higher, and ore quality is not always what it was.
Dustin Benton, Head of Resource Stewardship at UK environmental think tank Green Alliance, pointed out recently in a blog for Guardian Sustainable Business that the capital cost of new copper mines in Chile, the world’s largest producer of the metal, is now about $10,000–20,000 per tonne of annual mine capacity — double to quadruple the cost of mines developed previously.
In addition, while costs are increasing, the quality of some resources is declining. We have used up the good stuff. For example, ores have fallen from 10% copper in 1850 to just 0.6% today.
So, given increasing prices, quality decline, tougher extraction challenges, land use pressures and environmental concerns, how should we change the way resources are managed? The first action, some say, is to make bold changes to the production system itself.
A report from the Circular Economy Taskforce, Resource Resilient UK, a government-supported, business-led group convened by Green Alliance, says the way to mitigate the risks to UK business caused by resource insecurity is to move towards a circular economy.
The circular economy concept takes its inspiration from nature — that human systems should work like organisms, processing nutrients (biological and technical inputs) that can be fed back into the cycle and reused again and again. There should be zero waste in a perfectly functioning circular economy — in stark contrast to the current linear system that takes raw materials in at one end, and spits out waste at the other.
To do this, businesses and governments need to place greater emphasis on reuse, remanufacturing and the use of secondary material supplies.
Specifically, the report recommends, first, capturing baseline information on businesses’ risk exposure to resource insecurity through company reporting and a government study looking at analysing the risk to UK business sectors. Businesses could be encouraged to collaborate by changing competition law to reinforce exemptions for environmentally beneficial co-ordination.
Governments could get companies to commit to the use of long-term contracts and joint ventures to speed up the recovery of materials and products, and use legislation to mandate the production of products that are easier to reuse, remanufacture and recycle. These measures are, the report says, “intended to give companies the confidence to pursue circular approaches, and to help to create the tipping points that enable a resource resilient UK”.
The business case is persuasive if the estimates turn out to be even close to reality. The Department for Environment, Food and Rural Affairs (Defra) calculates that UK businesses could benefit by up to £23 billion per year through low-cost or no-cost improvements in the efficient use of resources. The global management consulting firm, McKinsey, estimates that the global value of resource efficiency could eventually reach $3.7 trillion per year.
Adoption of a circular economy could reduce resource use, too. The Waste and Resources Action Programme’s (WRAP) EU 2020 vision shows that direct material inputs for the EU-27 could decline by 2.8% between 2010 and 2020, resulting in a material saving of 188Mt by 2020. Assuming a raw material cost of £1750 per tonne, potential savings to business could equate to around £330 billion by 2020.
Technological developments could also help cut our dependence on natural resources. 3-D printing — the printing of three-dimensional objects — could turn out to be a transformative technology. Its use could reduce product transport miles (and therefore fuel use). It could also reduce waste and carbon emissions by allowing the manufacture of goods to order to exact specification and close to market rather than in bulk, and to general specification. It could simplify supply chains and reduce the need for warehouses full of unwanted or unsold stuff.
The technology is more widely used than people probably realise. It is currently employed to make a range of products for a variety of sectors, everything from parts for the electronics, automotive and aerospace industries, jewellery, and crowns, bridges and implants for the dental sector, to hearing aids and prostheses, human tissue, bicycles (made of nylon powder) and, controversially, plastic guns. It is a long way from widespread adoption, but its role in a circular, more efficient economy could turn out to be a substantial one.
Another technology that could turn out to be of benefit is nanotechnology — the engineering of functional systems at the molecular scale. Benefits include more efficient manufacturing and energy production processes. An example of the potential benefits can be found in the Technology Strategy Board’s New Design for the Circular Economy Initiative, called the Great Recovery. As part of this, it is funding a NewCatCo project, which is looking at ways to make vehicle catalysts more sustainable.
Three-way catalysts contain significant amounts of platinum group metals — platinum, palladium, rhodium — rare earth metals (REMs), most of which are mined in China and can be hard to get hold of because of Chinese export bans, and zirconium oxide. NewCatCo's Technical Director and Professor at Brunel University Paul Sermon believes it may be possible to make greener, more sustainable vehicle exhaust catalysts based on monolithic designs, using novel, nano-engineered, sustainable materials that can be nano-processed. Such a radical redesign could improve the recyclability of existing three-way catalysts and reduce the reliance on REMs.
Humans, since their first, faltering bipedal steps on the African plains, have always proved masters of invention, and when faced with scarcity, have innovated and substituted to overcome the problem, often finding a superior solution in the process. However, at a time when the demand for natural resources is increasing, it is clear that, this time, technological innovation on its own may not suffice; there also needs to be systemic change if we are to prevent large-scale environmental degradation and resource-led conflict.
The answer, say some experts, is to use less, be more efficient in what we do use, reuse and waste little or nothing — in other words, switch to a circular economy.
“It’s clear that businesses want to mitigate resource risks, and some big companies, including those in the Circular Economy Task Force, are,” says Benton.
“But addressing risks means co-ordinating across supply chains and with competitors. Big, motivated companies can start to address supply chain issues, but collaboration over design, material choice, and product standards demands industrial strategy. Government should be brokering collaboration to recover materials and remanufacture products to reduce resource risk.”
Last reviewed 11 February 2014