Dinah Louda is Executive Director of the Veolia Institute. The Oxford Martin School are partnering with the Veolia Institute for a conference on strategic materials for a low-carbon future in November this year.
We live in an increasingly virtual world where most consumers are further and further removed from the natural environment. But we still rely on natural resources: energy sources like oil and gas, construction materials like iron ore and copper, and key commodities like phosphorus. Even the technology shaping the future depends on manmade materials like plastics and extracted metals such as lithium and gold. Indeed, world extraction of material resources has tripled in the past 40 years, a UN report warned, and is expected to at least double by 2050 with the development of emerging economies.
How long can we continue on this path? To paraphrase economist Herbert Stein, “If something can’t go on forever, it won’t.” Throughout history, there have been periods where resource scarcities limited extraction and growth until new sources, technologies and business models solved the problem. We’ve reached another of those periods today; we’ll need some new thinking to find new solutions.
A different perspective
We’ve been thinking about resource scarcity, and how academics, business leaders and policymakers can approach it. And we propose reframing the debate. Instead of talking about winning a battle for scarce resources, the more pressing question is: how do we ensure strategic material and mineral resources are available for people’s use in a sustainable future?
The idea of scarcity often pits companies, communities, and countries against one another. Availability, on the other hand, encourages collaboration and cooperation to rethink economic systems so that resources are more widely available.
Resource issues have come to the fore in two recent reports. The McKinsey Global Institute envisions how technology will transform the way we produce and consume resources, while the World Economic Forum's report on the future of construction looks at new ways of managing resources in a world hungry for new building.
The volume of natural resources used for building increased 23-fold from 1900 to 2010. Indeed, half the solid waste in the United States is from the construction industry. The emphasis here is on “waste”, as in wasted opportunity. If spending on resources falls and is redeployed to other parts of the economy, that could save more than $1 trillion in 2035, says McKinsey.
When these problems are viewed through a resource availability lens, fresh opportunities for innovation, collaboration and new business come to life.
Electric cars dramatically stem carbon emissions from transport, but they require four times as much copper as those that use internal combustion engines, McKinsey says. But vehicle sharing not only makes transport services available to a wider population, it also means that electric cars’ copper use goes further. McKinsey reckons there could be several fewer million cars on the roads by 2035.
The World Economic Forum’s construction report highlights new circular-economy opportunities, if only business had on its resource-availability hat. Circular economies return materials at the end of a product’s lifespan, to be put to new use. For instance, recycled glass could be ground up and used in concrete to reduce the use of cement, which is highly carbon-intensive to make. That innovative fix which so many construction companies are now exploring requires builders and recyclers to cooperate to make efficient use of their available resources, i.e. glass shards too fine to be separated by colour.
But to succeed, such new business models need broad buy-in. Manufacturers would find ways to incorporate recycled materials into new products. Retailers and distributors would need to devise take-back programs to glean enough material for cost-efficient reuse. Customers might have to relinquish the idea of owning cars, washing machines, or other devices permanently. And that takes a resource-availability mindset on the part of all involved: if we collaborate on these solutions, we all gain.
Collaboration: putting it all together
Clearly, there are business opportunities in pushing for resource availability, if businesses can collaborate to ensure the availability of strategic materials and mineral resources for a low carbon world. But how exactly? In low-carbon focus sectors such as renewable energy and transport, what kinds of technical and financial innovations would encourage investment in new, substitute, and renewable materials, and their recovery and reuse in a circular fashion? Beyond technological fixes, what kinds of collaboration and cooperation would business, policymakers, and communities need to ensure that key materials remain available, and what would encourage greater collaboration?
The Veolia Institute hopes to contribute to this debate. This November 2nd and 3rd at our 10th International Conference, we are partnering with the Oxford Martin School to explore these questions and others on making strategic materials and minerals available for a low-carbon future. The conference brings together those who can contribute insights and solutions, from academics and the scientific community to business leaders, entrepreneurs, and policymakers and civil society leaders. We hope to see you there.
This opinion piece originally appeared as a LinkedIn blog