Investing in Resource Efficiency

Abstract

This chapter discusses long-term changes in economies and future challenges. It introduces two concepts that may help boosting resource efficiency in the future. First, new insights into the saturation effect, i.e. evidence on how UK, USA, Germany and Japan have been consuming key materials since early stages of their industrialisation. The result is striking: the per capita demand for steel and cement starts to saturate at a per capita average income level of US$12,000 GDP/capita in the four industrialized countries, followed by copper saturating at US$20,000 GDP/ capita. Comparing those values with China, we see current indications of saturation in the demand for steel and copper. Chinese per capita consumption of cement is extraordinary and dwarfs the levels determined for industrialized countries. It is questionable whether those levels will be maintained for longer. Accordingly, one can expect a saturation level and, perhaps, a peak in the Chinese demand for primary material resources to come soon. Similar patterns may apply to other emerging economies. As resource efficiency efforts come on top of such saturation, the long- run implication is a lower resource demand for the future compared with e.g. recent estimates made by UNEP’s International Resource Panel. The second booster for the resource efficiency debate stems from acknowledging interlinkages, i.e. the nexus between energy, water, food, materials and land. Beyond accounting for interlinkages, the nexus debate adds a security dimension and it helps to address the Sustainable Development Goals (SDGs). Firms and investments create manifold niches for disruptive changes towards sustainability, as this chapter exemplifies via recent modelling results and new models for mining and steel. Our overall outlook is cautiously optimistic as we depict a mission of bottom-up activities driven by various stakeholders and regional interests. Assuminghow ambitious these countries are combatting air pollution and deploying clean technologies, the hubs of resource efficiency may well be shifting Eastwards. saturation levels soon to reach for future demand of material resources in key economies such as China and observing