SIEMENS

According to UN estimates, the global population will rise by a further 2.3 billion to 9.3 billion people by 2050 — and most of that growth will occur in developing countries and emerging markets. How can such population growth be managed without overburdening our planet’s resources? Past experience has shown that population growth and rising affluence have almost always been accompanied by an increase in resource and energy consumption.

However, on the basis of the “ecological footprint” concept, mankind’s resource use is already 20 percent higher than the Earth’s ability to accommodate it (see article “Why We Are Destroying Wealth Faster than We Can Create It”). The United Nations Environmental Program (UNEP) therefore issued a warning in its 2010 report that if economic growth continues to determine resource consumption in the way it does today, human beings will consume 140 billion tons of minerals, ores, fossil fuels, and biomass by 2050 annually, which is nearly three times higher than the current rate. That’s why the major challenge facing the planet today lies in decoupling resource use from economic growth and reducing resource use in general. “Eco-sufficiency” is the term used to describe a lifestyle and economic system that would put an end to excessive use of goods, raw material, and energy. The concept was developed by Dr. Wolfgang Sachs, Head of the Berlin office of the Wuppertal Institute for Climate, Environment, Energy in Germany.

Making the necessary transition won’t be easy. The demand for oil remains unchecked, for example, and according to the International Energy Agency, China’s oil consumption alone will increase by 70 percent between 2009 and 2015, when the country will account for 42 percent of global petroleum consumption. The situation with steel is similar.

A recent analysis conducted by Pricewaterhouse-Coopers (PwC) found that increasing urbanization and industrialization in emerging markets will cause annual steel production to rise by around one billion tons to 2.3 billion tons per year between now and 2020, at which point the increase will begin tapering off. Drinking water is also now a scarce resource: China’s consumption alone will double by 2030, according to a study carried out by the German Electrical and Electronic Manufacturers’ Association (ZVEI). What’s more, groundwater reserves in northern China will be exhausted in 30 years.

Even though global resource use will continue to increase, there are now some indications of a relative decoupling of economic growth and gross domestic product (GDP) from resource use. This would mean that the economy could grow more rapidly than environmental impact as defined by the European Commission. If, on the other hand, environmental impact should remain stable or actually decline even as economies expand, the result would be a so-called “absolute decoupling.” The OECD has determined that the G8 nations have undergone this kind of decoupling to a limited extent since 1980. Canada, Germany, Japan, and Italy have been able to decouple their absolute resource consumption figure from GDP growth.

This relative decoupling is primarily a result of higher resource productivity — i.e. GDP in relation to domestic material consumption (DMC). This ratio measures the amount of raw material used directly for economic activity. For example, the European Commission reports that resource productivity in the EU-27 nations rose from €1.21 to €1.31 per kilogram (of raw material) between 2000 and 2007. In other words, fewer raw materials like fossil fuels, biomass, or metal ores were needed to generate one euro of GDP in 2007. The development of resource productivity in the U.S. has been similar, rising from €1.19 per kilogram in 2000 to €1.32 in 2005.

However, resource productivity in Asia varies greatly, according to the Sustainable Europe Research Institute (SERI). Whereas Singapore generated €0.87 of economic output per kilogram of raw material consumption in 2005, and Korea produced €0.65, China, India, Malaysia, and Indonesia were much less resource efficient (less than €0.29/kg). According to this measurement method, the EU is 4.5 times more resource efficient than China. One reason for this is that emerging markets have built up industries and infrastructures that are material- and energy-intensive, while the industrialized nations have more strongly promoted less resource-intensive industries such as the service sector and the electronics industry.

The EU has stated that its intention is to decouple resource use from economic growth by 2020 in an initiative within the framework of its Europe 2020 strategy. The objective here is to achieve environmentally compatible growth by, for example, introducing incentives to promote more efficient use of resources; creating new markets by stimulating demand for environmentally friendly technologies, products, and services; and taxing resource consumption and environmental pollution.

In general, there’s no sure formula when it comes to implementing strategies for environmentally friendly growth. The top priority is most certainly to formulate economic policies that enable such growth. China, for example, announced in its 12th Five-Year Plan (2011 to 2015) that it will step up investment in more efficient technologies, recycling, and waste management. The Chinese government also plans to reduce energy consumption and CO₂ emissions by 16 percent and 17 percent per unit of GDP, respectively. Among other things, this is to be achieved by increased use of energy from renewable sources, which should then account for 11 percent of total energy production by 2015, and 15 percent by 2020.