For a Fistful of Resources?

Global - Mar 27 2019
  • #environment

Weekly food for thought
  • Environment

For a Fistful of Resources?

A well-known quotation from the American economist Kenneth Boulding explains that “The only people who believe in infinite growth in a finite world are madmen and economists”. Beyond the criticism of his peers and the impact of the sentence, it stresses the importance of rational use of natural resources to avoid a collapse as described in “The limits to growth” report published in 1972 by a team of researchers, including Donella Meadows, Dennis Meadows and Jørgen Randers. The 30-year update of the report (2004) confirmed trajectories, increasing the likelihood of this kind of collapse.

To tackle this issue, the United Nations Environment Programme launched in 2007 the International Resource Panel (IRP) to build and share the knowledge needed to improve our use of resources worldwide. The Panel consists of scientists, skilled in resource management issues from both developed and developing regions, civil society, industrial and international organizations. In March 2019, it published the Global Resources Outlook 2019 aiming at analysing the demographic and socioeconomic forces driving the extraction and use of natural resources globally (including, water, air pollution…).

Figure 1: decoupling concept

Unsurprisingly, biomass, metals, fossil fuels and non-metallic mineral extractions have drastically increased since 1970 with an acceleration in the last 2 decades. This trend is obviously not sustainable in a finite world and according to them, decoupling is the only way to make growth and environmental resources compatible. Decoupling refers to the ability for an economy to grow without a corresponding increase in environmental pressure. For instance, the report of the Water Working Group of the IRP suggests 6 ways of decoupling; i. improve technical water efficiency ii. curb water demand thanks to appropriate policies and reallocate it to where it most contributes to growth iii. integrate negative externalities in water price iv. improve research in eco-systems valuations to change trade-offs v. disseminate solutions and results vi. assess and communicate water content of international trade.

However, one can be left wondering whether such solutions only temporarily generate decoupling between growth and resources by decreasing the water intensity, but the increasing marginal social and economic cost(s) to improve it might themselves be unsustainable. Is the idea that resource use might be independent of economic activity, and then individual effort not needed, an inspired bet, wishful thinking or an illusion?

If we consider Figure 1, there is an elephant in the room! A well-being/economic activity decoupling is missing, unconsciously suggesting that growth is a pre-requisite to well-being whatever the economic level. Couldn’t we be happier without income increase beyond a certain level? The only people who believe in infinite happiness in a no-growth world are madmen and die-hard optimists.

Emeric Nicolas, Head of Data Science Dpt. Sources: Beyond Ratings, International Resource Panel

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