Resource Efficiency: Potential and Economic Implications

Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Acknowledgements coordination and support,especiallyShaoyi Li, The UNEPSecretariat team provided essential Thomas Graedel, Maarten Hajer, SeijiHashimoto, Jacqueline AloisideLarderel, Chika Aoki-Suzuki, Jim West andHenkWesthoek. John Ingram, Katja Kruit, BenMilligan, Yuichi Moriguchi, Abraham Pedroza. Astrid Schomaker, Birgit Schwenk, Yoshinori Suga, Anu Ramaswami, HeinzSchandl,Sangwon Suh, Yonglong Lyu, Anne Miehe,Jonathan Murphy, Kazunobu received by Hezri Adnan,Shardul Agrawala, We are grateful for thevaluable comments Christina Bodouroglou, Vera Gunther and former Co-ChairoftheInternational Resource Panel, for Onogawa, Antonio Pedro, M.A. TlouRamaru, Charles Arden Clarke, MarinaFischer-Kowalski, their contributions, dedication and commitment. the International Resource Panel, andAshokKhosla, Contributing authors: Stefan Bringezu, Special thanks go to Janez Potočnik, Co-Chairof Steve Hatfield-Dodds, Petr Havlik, Edgar Hertwich, Erinç Yeldan. Ernst von Weizsaecker, Anders Wijkman and Lea Kauppi, Pawel Kaźmierczyk, Vijay Kumar, Patrice Christmann, Jeffrey Herrick,Tim Kasten, Mariano Castro Sanchez Moreno, MinpengChen, Peter Borkey, Werner Bosmans,HansBruyninckx, Mark Swilling, EsterMark Swilling, van derVoet, BrianWalsh, Nabil Nasr, David Newth, MichaelObersteiner, Lead authors: Paul EkinsandNickHughes. Editor: International Resource Panel.

do notnecessarilyrepresent thedecisionorstated expression ofany opinionwhatsoever onthepartof constitute endorsement. of itsauthorities,or concerning delimitation ofits of thematerial inthispublication donotimplythe The fullreport shouldbereferenced as follows: The designations employed andthepresentation This publication may be reproduced inwholeorpart Copyright ©United Nations Environment Programme, 2016 All photos ©:AFP nor doescitingoftrade namesor commercial processes policy oftheUnited Nations Environment Programme, prior permissioninwritingfrom theUnited Nations publication that usesthispublication asasource. No provided acknowledgement ofthesource ismade. any othercommercial purposewhatsoever without and inany form for educational ornon-profit purposes use ofthispublication may bemade for resale or for UNEP would appreciate receiving a copy ofany without specialpermissionfrom thecopyright holder, frontiers orboundaries.Moreover, theviews expressed the legal status ofany country, territory, cityorarea or the United Nations Environment Programme concerning UNEP (2016)Resource Efficiency: Potential and Resource Panel. Ekins,P., Hughes,N.,et al. Environment Programme. Printed by: UNESCO Design/layout: UNEPDCPI Economic Implications. Areport oftheInternational Disclaimer

Summary for Policy-Makers

Produced by the International Resource Panel.

This document highlights key findings from the report and should be read in conjunction with the full report.

The report can be downloaded from www.unep.org/resourcepanel. Additional copies can be ordered via email: [email protected] Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Two historic events in2015figure prominently S Preface With thepublication of15assessment reports with decoupling economic growth from Sustainable Development highlights that and continuous dialogueswithpolicy-makers, environmental degradation asoneofthe key on Climate Change confirms that on resources issues:the2030 Agenda on of natural resources andthat articulates the to poverty eradication and to thesustainable technological andeconomic potential of the urgency for thesustainable management the escalating useofnatural resources and towards abetter tomorrow for current and stood outasacredible voice intheinternational industry leaders andcivilsociety, thePanel has state, managementuse ofnatural and resources. sustainable resource management iscritical relevant scientific assessments onthefuture related publicpolicies. resource efficiency and ways forward forthe decarbonisation must go handin hand future we want; andtheParis Agreement community that underlinesimperatives and future generations. components for achieving thetransformation International Resource Panel has ince itsinception in2007,the independent, authoritative andpolicy been committed to providing

- developed, newly industrialized anddeveloping. The assessment demonstrates that because This rapid assessment report istheresult with climate policycould at thesametime which shows that resource efficiency combined who thoroughly reviewed thebest science International Resource Panel to produce a It isexactly for thesereasons that theG7at economicgrowth andemployment, if supported efficiency can have, ifitisimplemented carefully experts oftheInternational Resource Panel and supported across different sectors and at as well asthehuge potential that resource available. The findings ofthe report point out of atrulycollective effort byscientists and of theirincreased commitment to improving of themodellingundertaken for thisstudy, the importance ofjoiningforces for actingnow their efforts in resource efficiency, asked the their SummitinGermany inJune2015,aspart is tremendous. Thisissupported by theresults inefficient, thepotential for resource efficiency in resource efficiency couldactually lead toa solutions for resource efficiency forall countries many areas ofresource useare relatively by well-designed policies. how resource efficiency canlead tohigher positive economic outcome. The report shows multiple levels. Thepressing need to invest report onthemost promising potentials and Summary for Policy-Makers

stabilise global resource use by 2050 and boost We are very grateful to Paul Ekins and incomes and economic growth. Nicholas Hughes for their tremendous effort in presenting a comprehensive Looking forward, the report demonstrates up-to-date perspective for understanding the numerous examples from different countries potentials and economic implications around the world of increasing resource of resource efficiency. Their remarkable work efficiency in different sectors. It thereby puts gives us hope that with engaged actors, it

the different challenges ahead into perspective will be possible for us to improve wellbeing Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers and illustrates how to learn from each other for everyone and protect the planet today and how to scale up what is working. and tomorrow.

Co-Chairs, International Resource Panel (IRP)

Dr. Janez Potočnik, Dr. Alicia Bárcena, Ljubljana, Republic Santiago, of Slovenia Chile Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Foreword O efficiency asa core element ofsustainable efficiency. This rapidassessment report- considerably, culminating last year inthe As partofthat commitment, theG7asked development. developing countries. developed countries, emerging economies and and most promising solutions for resource across theeconomic anddevelopment action by all countries to change the way promote ambitiousactions toimprove resource and trends ofresource efficiency and presents Implications Resource Efficiency: Potential and Economic synthesis report that highlights thepotential spectrum. Genuineandeffective international will notbesufficient. Achieving anincrease the International Resource Panel to prepare a that resources are produced andconsumed to championresource-efficiency, that alone in resource efficiency will require a concerted While itisessential andsignificant fortheG7 Development Goalsandinthedecisionby leaders oftheGroup ofSeven (G7)nations to historic adoption ofthe17Sustainable best-practices andpossiblesolutions for and sustainable management of natural resources has increased ver thepast decade, the importance ofresource efficiency -provides ananalysis ofthe status

economies whilepreserving thenatural challenges determined by local contexts that of resource efficiency represents amajor cooperation willmake transformation toa generations. Inshort,theglobalimprovement Achieving thiswillonlybepossiblewith appliances for setting the required average an historic opportunityto builddynamic, reaching nearly45percent for household at alllevels, alongwiththeacknowledgement make a‘one size fitsall’solutionimpossible. resource baseandenvironment for future resource efficient future a reality. standard inafuture year, ledto efficiency significantly to increased recycling rates, The examples inthisreport illustrate what sustainable, innovative andpeople-centred waste in2012.Italsoshows that Japan’s ‘Top waste in2014,upfrom 26percent for overall with notonlyamajorchallenge, butalso the highest performing energy-efficient that there are differences in resource the 2030Agenda. Such atransformation presents all countries is working and why. Thereport shows that a instrument to achieve thegoals we have set in Runner’ scheme, whichusesasabenchmark Runner’ focused political will,actionand determination landfill tax intheUnited Kingdom contributed Summary for Policy-Makers

improvements in different product groups I would like to express my gratitude to of 16-80 per cent in the last 12 years. It further the International Resource Panel, under the demonstrates that planting trees alongside leadership of Janez Potočnik and Alicia Bárcena, crops can improve soil fertility, such as in for developing this important report. Zambia, where 160,000 farmers have planted nitrogen-fixing trees among their crops, leading to average maize yields of 4.1 t/ha from fields

planted with acacias, compared to 1.3 t/ha Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers outside of the tree canopy.

These examples show what is possible if we work ambitiously and jointly and should fill us with hope and motivation for the way forward. It is my strong desire that the findings of this Achim Steiner UN Under-Secretary General important report will inspire determined and Executive Director, action in increasing resource efficiency. UNEP Nairobi, Kenya, March 2016 Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Summary for Policy-Makers

Contents

Key Messages 3 1. Introduction 6

2. The imperative and opportunity of increased resource efficiency 12 2.1 The imperative of increased resource efficiency 12 2.1.1 Substantial increases in resource efficiency are essential for meeting the SDGs 12 2.1.1.1 Future availability of material resources 13 2.1.1.2 Volatility and long-term increases in resource prices 16

2.1.1.3 Sustainable use of renewable resources 17 Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers 2.1.1.4 Environmental impacts of resource extraction and use 22 2.1.2 Substantial increases in resource efficiency are essential for meeting climate change targets cost effectively 24 2.2 The economic opportunity of increased resource efficiency 26 2.2.1 Costs and benefits of increasing resource efficiency 26 2.2.2 The benefits of reducing externalities 28 2.2.3 The macroeconomic benefits of resource efficiency 30

3. Best practices for increasing resource efficiency 32 3.1 Overcoming barriers to resource efficiency 34 3.2 Initiatives and programmes for increased resource efficiency 35 3.3 Best practice examples of successful resource efficiency 38 3.3.1 Materials 38 3.3.2 Land and soils 44 3.3.3 Water 49 3.3.4 Energy 55 3.4 Systems thinking and nexus issues 61

4. Conclusions 62 4.1 The imperative and opportunity of resource efficiency 62 4.2 Best practices for increasing resource efficiency 63

References 67 Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

Key Messages

With concerted action, there is significant potential for increasing resource efficiency, which will have numerous benefits for the economy and the environment

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers 2. envisaged by theSDGs. protection to deliver “thefuture we want”, as such development withenvironmental vital for humandevelopment, andfor balancing critical to providing the resource securitythat is resilience. Increases inresource efficiency are improves overall economic andenvironmental both short- andlong-term benefits, and human well-being. Resource efficiency yields consumption have many negative effects on natural resources. Current patterns of resource economy-wide management ofawholerange of (SDGs), 12directly dependonthesustainable Of the17Sustainable Development Goals Resource useiscentral to humanprosperity. 1. cost effectively meeting climate change targets efficiency isindispensable for protecting theenvironment enabling development while Development Goals(SDGs)– to meet theSustainable resource efficiency are essential Improving resource Substantial increases in

(CO from fossil fuelswithresulting carbon dioxide require muchenergy, at present mainlysourced The extraction, processing anduseof resources reform andstrategic useoffiscal policy in enablinginfrastructure, environmental tax and targeted regulation, appropriate investment change, andsomecombination ofintelligent and direction ofinnovation and technical to beovercome through changes to therate this willrequire barriers to resource efficiency growth andemployment. However, achieving resource efficiency can yieldhigher economic There isstrong evidence that increasing 3. and jobcreation contribute to economic growth 2 degrees Celsius( to keep average globalwarming well below it willbedifficultandsubstantially more costly significant improvements in resource efficiency, for many low-carbon technologies. Without from theincreased material usethat isrequired substantially, as well astheadverse impacts Resource efficiency can reducetheseemissions CO and landusechange entails emissionsofboth

2 Resource efficiency can andnon-CO 2 ) andotheremissions.Muchlanduse 2 greenhouse gases (GHGs). o C).

Summary for Policy-Makers

and sustainable public procurement in with climate policy could stabilize global support of resource efficiency and innovation. resource use at current levels through to 2050, Targets for resource efficiency increases while boosting incomes and economic growth. need to be set and progress towards them monitored. 5. Increased resource efficiency is practically attainable 4. There are substantial areas of opportunity for greater resource Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers There are numerous examples from countries efficiency around the world at very different stages of development of increasing the resource Many areas of resource use are relatively efficiency of different sectors and economic inefficient, presenting significant opportunity activities, thereby gaining social, environmental for improvement in many areas of the economy. and economic benefits and helping to realize Developing countries have further opportunities a world worth living in. The challenge for policy- to design their infrastructure and development makers is to learn from and scale up these good paths in a resource-efficient way from the practices, and to conceive and implement a set outset. New modelling undertaken for this of transformative policies suitable to countries’ report finds that resource efficiency combined specific circumstances.

5 Summary for Policy-Makers

Introduction

ote: This report on resource This is a report about prospects for resource efficiency has been produced by efficiency. It considers how resource efficiency the United Nations Environment can contribute to economic growth and NProgramme’s (UNEP) International development, at the same time as reducing the Resource Panel (IRP) in response to a request by world’s use of materials, energy, biomass and G71 Leaders at the Summit held in June 2015 in water, and the resulting environmental impacts. Schloss Elmau, under the German Presidency. It is a Summary for Policy Makers of a much 2015 was a landmark year, due to the longer forthcoming Assessment Report by the establishment of two historic global agreements IRP, which synthesizes the main work of the which confirm the international community’s IRP and other international organizations and shared commitment to achieving equitable and researchers in this area (UNEP, forthcoming sustainable development. The 2030 Agenda in 2016a). for Sustainable Development, with its 17

1 The Group of Seven (G7) nations is made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The European Union (EU) is also represented. Policy-Makers Efficiency • Summary for Resource of Implications and Economic Prospects

6 Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

Sustainable Development Goals (SDGs), is now industrialized and emerging economies and the most complete expression of the positive other developing countries to join forces to aspirations of human societies worldwide eradicate poverty, and protect Earth’s resources through to 2030. Further, the agreement in Paris and ecosystems for the benefit of present and at the 21st Conference of Parties (COP 21) to future generations. the United Nations Framework Convention on Climate Change (UNFCCC) saw 195 countries Resources, including renewable and non- pledging to keep global temperature rise to well renewable energy, materials, water, air, biomass below 2°C above pre-industrial levels. and land, are fundamental to human well-being. Box 1 sets out the definition and terminology of Both the 2030 Agenda and the Paris Agreement resources that are used in this report, and how are highly significant in that they commit resource use is measured.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers resources produced orenvironmental Measures may distinguish between its volume (for instance, incubicmetres). (for instance, insquare metres) and water by tonnes. Landisusuallymeasured by itsarea quantities ofwhich are often measured in metals, andnon-metallic minerals, the four majorcategories: fossil fuels,biomass, Material resources are often dividedinto example, metal ores, rather thanmetals). extraction orprocessing by humans(for are thoseprovided by nature before their an important resource. “Natural resources” (for example, solarorwindenergy) isalso greenhouse gas (GHG).Ambient energy carbon dioxide, whichistheprincipal major source ofincreases inatmospheric fuels, thecombustion ofthe latter beingthe metal ores, non-metallic minerals, andfossil biodiversity. Sub-soilresources comprise conjunction withsoilproduces biomassand or thehabitats ofotherspecies),whichin of terrestrial space(for humanhabitation (marine andfresh) andland.Landconsists include air(theatmosphere), water forservices humans.Resources therefore that have thecapacity to provide goods and to describeelements ofthephysical world In thisreport theterm “resources” isused Box 1:Resourcesandtheirmeasurement unit ofvalue added. similarly theenvironmental pressure per value added.Environmental intensity is measured by resource useperunitof of resource productivity, and istherefore impacts). Resource intensity istheinverse environmental pressures that cause such resource efficiency implies reducingthe impacts ontheenvironment (increased resource extraction orusehasnegative resource input); andtheextent to which useful output or value addedper unitof given quantity of resources (measured by to whicheconomic value isaddedto a input); theresource productivity, or extent output perunitofenergy ormaterial (measured by theuseful energy ormaterial the technical efficiency of resource use used to encompass anumberofideas: The term “resource ishere efficiency” minerals) andcarbon dioxide. biomass), water, materials (metals and the landrequired for theproduction of footprints are thosefor land(whichincludes or “footprints”. Thefour main calculated called “consumption-based” indicators a country’s finaldemand.Thelatter are supply chainofaproduct or orservice associated withorarisingfrom thewhole impacts occurringinaterritory, andthose

Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

Earth provides natural resources in (FAO, 2014). In many parts of the world, abundance, and human populations use supplies of freshwater are stressed or scarce them abundantly. In 2015, 84 billion tonnes (WWAP, 2015). of materials were extracted and used by the human economy (UNEP, forthcoming in 2016b). Human activity is changing ecosystems rapidly A third of land on Earth is now cultivated to and extensively, largely in response to increasing meet human needs and wants (FAO, 2016; demands for food, fresh water, timber, fibre, UNEP, 2014a). Globally in 2005 humans minerals and fuel (MEA, 2005; UNEP, 2012a). consumed 25 per cent of the biomass produced These changes have depleted and degraded on land in that year (Haberl et al., 2014; many ecosystem services, increased risks of Krausmann et al., 2013). An estimated 61 per sudden and disruptive environmental change, cent of commercial fish populations are fully and exacerbated poverty for some groups of fished, and 29 per cent are overfished people (MEA, 2005).

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Source: UNEP(2011a),Figure 1,p.xiii Figure 1:Decoupling ofresource useandenvironmental impactsfrom GDP growth. the sameperiod(OECD, 2012). for water could increase by 55 per cent over cent, respectively, by 2050(FAO, 2012).Demand could increase by 60 per cent and80–95per the amount in2015.Demandfor food andfibre 2050 (Schandlet al.,2015),more thandouble been projected to reach 183billiontonnes by usual’, annualglobalmaterial extraction has UNEP, 2012a).For example, under‘businessas demand for resources (Krausmann et al.,2009; increase pressures ontheenvironment and business-as-usual mode,islikely to dramatically coupled withcontinued economic growth ina of Africa andAsia(UN,2015).Thisincrease, is likely to beconcentrated inurbanregions from 2015.Muchofthepopulation growth 9.7 billionin2050,anincrease of33percent The world population isprojected to reach

and environmental impacts actually declining rate than GDP (relative resource decoupling) resource use increasing at a much slower of the SDGs. However, Figure 1 also shows such as might be implied by the achievement domestic product – GDP) and human well-being for economic performance (measured by gross Figure 1, which shows increasing trajectories The concept of decoupling is represented in growth ofeconomic output. associated environmental impactsfrom the is required isa safely absorbed by Earth’s ecosystems. What to theenvironmental impactsthat can be of someEarth’s resources, andreal limits that there are majorconstraints onthesupplies This report draws onmany sources to show Economic(GDP) activity Resourceuse Environmental impact Human well-being Impact decoupling Resource decoupling decoupling ofresource useand Time Summary for Policy-Makers

(absolute environmental decoupling). This imperative of increased resource efficiency conceptual figure therefore indicates the ideal come opportunities for increased economic goal of resource efficiency through the notion of growth and employment. The report then decoupling – that economic output and human documents some best practices in resource well-being shall continue to increase, at the same efficiency in the use of materials, food, land, time as rates of increasing resource use and water and energy, and how they have been environmental impact are slowed, and in time implemented. The study concludes that the

brought into decline, thereby sustaining resource opportunities for resource efficiency are Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers use and the delivery of ecosystem goods and numerous and beneficial for both the economy services for current and future generations. and the environment, and could facilitate social development. They are also attainable The capacity of Earth to continue to with public policy interventions. provide resources for human populations in the immediate and more distant future is a matter There are therefore strong reasons for seriously of critical importance. In order to addressing resource efficiency and exploring avoid dangerously depleting that capacity, more deeply the opportunities for it. These it is vital that humans use Earth’s resources reasons explain the increasing interest from more efficiently. governments and other policy-makers in resource efficiency, and the large volume of This report first makes the case that literature on this subject, on which this report increased resource efficiency is essential to seeks to build. Indeed, they explain why the G7 reducing the environmental impacts associated governments have requested this report. with resource use to within a scientifically delineated “safe operating space” (Steffen et al., 2015). Remaining within such ecological limits, as is pledged in the case of climate change by the COP21 agreement, is an imperative if the increased human well-being envisaged by the SDGs is to be realized and sustained, and if economies are to be resilient to resource supply disruptions and associated resource price volatilities. It is then shown that with the

11 Summary for Policy-Makers

2. The imperative and opportunity of increased resource efficiency

2.1 The imperative of Figure 2: Number of Sustainable Development Goals that increased resource efficiency directly depend on the sustainable use of natural resources.

2.1.1 Substantial increases in resource efficiency are essential for meeting the SDGs

While attainment of all the SDGs requires to a large extent the sustainable management and use of Earth’s natural resource base, no fewer than 12 of the Goals refer directly to resources and the environment as fundamental to their achievement (Figure 2). Source: UNEP (forthcoming in 2016a) Policy-Makers • Summary for Economic Implications and Potential Efficiency: Resource

12 Summary for Policy-Makers

Resource efficiency contributes to GDP trends in material extraction and GDP from growth and human well-being in an 1970 to 2015, which illustrates that material environmentally sustainable manner from four extraction has continued to increase strongly. key perspectives, which are at the heart of Indeed, according to this more recent data, achieving the SDGs presented above2 : future since 2000 material extraction appears to have resource availability, increasing and volatile grown at a faster rate than GDP – suggesting the resource prices, the present unsustainable use possibility of “recoupling” if this trend persists.

of renewable resources, and the environmental Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers impacts of resource extraction and use. Figure 3: Global material extraction in billion tons, and global GDP in trillion US $ (2005 prices), 2.1.1.1 Future availability of 1970-2015. material resources

90 70 Past trends show consistently increasing global 80 60 resource use. UNEP (2011a) estimates that 70 50 the amount of materials extracted and used 60 globally – including ores, minerals, fossil fuels 50 40

and biomass – increased eightfold between 40 30 GDP 30 1900 and 2005. This was twice the rate of billion tonnes 20 20 population growth, but somewhat less than trillion US$, 2005 prices Material extraction (used) extraction Material 10 the rate of GDP growth, which increased by 10 0 0 an estimated factor of 19, at constant prices, 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

over the twentieth century (De Long, 1998). Biomass Fossil fuels Metal ores

These statistics therefore present long-run Non-metallic minerals GDP evidence of “relative decoupling” of material extraction from GDP. However, such relative resource decoupling does not entail an absolute Source: Material extraction data from UNEP reduction in resources used. Figure 3 shows (forthcoming in 2016b), GDP data from UNSD (2015).

2 Of course, the SDGs have other objectives, such as poverty eradication, gender equality and more equitable development outcomes. The extent to which increased resource efficiency contributes to the achievement of these other objectives will depend on the detail of the policies through which resource efficiency itself is achieved. Such policy detail is outside the scope of this report.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers manufacturing, andtowards service-based structural shifts away from heavy industry and in thesecountries, itmay alsobecaused by to amore economically efficient useof materials increasing MPofG7countries may bepartlydue developing world. Thus,whilethehigherand industrial transformation inmany partsofthe material productivity. Thisisthe result of rapid productivity to countries with muchlower of production from countries withhighmaterial productivity occurred because ofaglobalshift 3). Therecent fall inoverall globalmaterial rate thanGDPduringthisrecent period(Figure fact that material extraction increased at a faster declined slightly since2000,whichreflects the has remained practically constant, and even that at theglobalscale material productivity year onaverage. However, Figure 4alsoshows increases slightly, at arate of1.2percent per lower throughout theperiod,thoughitalso in theBRICS of 1.9percent peryear. Material productivity countries increased steadily at anaverage rate domestic material consumption (DMC) amount ofeconomic outputperweight of material productivity (MP)–measured asthe Figure 4shows that over theperiod1970-2010, 4 3 Brazil, Russian Federation, India,China,South Africa DMC measures thetotal amount ofmaterials directly usedby aneconomy, andiscalculated asdomestic extraction, plusall physical sumption_(DMC) imports, minusallphysical exports. See: http://ec.europa.eu/eurostat/statistics-explained/index.php/Glossary:Domestic_material_con 4 group ofcountries issubstantially 3 –inG7

Material productivity Source: Data fromUNEP(forthcoming in2016b) economy, 1970-2010. kg ofdomestic material consumption (DMC)inthe BRICS andG7countries, inconstant US$2005per Figure 4:Material productivity ofthe world, US$, 2005 prices/kg burden oftheirconsumption “exporting” thematerial andenvironmental may rather involve economies service-based productivity onagloballevel, andindeed this doesnotnecessarilyincrease material their changingeconomic structure. However, productivity, onaDMCbasis,as result of goods can therefore increase theirmaterial share andimported ofservices manufactured activities. Economies withanincreasing 3.0 2.5 2.0 0.0 1.0 0.5 1.5 1970

...... 1975

. 1980

. World

. . 1985 .

...... G7 1990

. .

. . . .

(UNEP, 2015b). . .

. .

. . .

1995 .

. .

BRICS

. .

. 2000

. .

2005

. .

2010 . . - Summary for Policy-Makers

This effect can be seen in Figure 5, in these countries. However, the BRICS MF which shows the total per capita material remains less than half that of the G7 countries, footprint (MF) of the G7, the BRICS countries even after the latter suffered a substantial and the world as a whole. The MF measure drop following the 2008 global financial crisis. allocates all upstream material extraction This shows that G7 countries are responsible related to traded goods and services to the for a much higher level of per capita material country of final consumption, rather than the consumption than BRICS countries or the world

country or countries of production. The figure average, even if the material extraction and Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers shows that the MF of BRICS countries has been resulting environmental impacts do not all take rising steadily and is now approaching the place within G7 countries. global average, representing rising consumption Overall, these data suggest that while long-run relative decoupling of material extraction from GDP can be observed at a Figure 5: Per capita material footprint of global level, this relative decoupling is not domestic final demand in the G7, the BRICS sufficient to prevent a persistent increasing and the global economy, 1990-2010, in tonnes. trend in absolute resource extraction. Indeed, in contrast to the long-run relative decoupling trend over the 20th century, recent years’ 30 data suggest that resource extraction has 25 begun to increase at a faster rate than GDP,

20 suggestive of “recoupling”.

tonnes Human populations are still growing, as 10 are their economies. Current trends suggest that a growing global population

Per capita Material Footprint Material capita Per 5 with rising average wealth will continue to 0 1990 1995 2000 2005 2010 drive up the consumption and use of materials. World ...... BRICS G7 These drivers have been projected to push material extraction towards 183 billion tonnes per year by 2050 as previously mentioned. The Source: Data from UNEP (forthcoming in 2016b) mobilization of such quantities of materials

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers over time(UNEP, 2015b),andseeFigure 6 for highly volatile resource and commodity prices of resource supply, whichhave produced The second issuerelates to themarket dynamics increases inresource prices 2.1.1.2 Volatility andlong-term their future availability. the risks andthreats ofseriousdisruption to and recycling ofsuchmaterials can reduce (BMUB, 2012;UNEP, 2014a). Theefficient use inputs to landfor theproduction ofbiomass 2013c). Nitrogen andphosphorusare crucial turbines (BMUB, 2012;UNEP, 2010,2013b, photovoltaic cells,batteries, catalysts andwind in low-carbon technologies suchassolar to reduce carbon emissionsdueto theirroles quantities, willbeincreasingly critical to efforts and neodymium,thoughmobilized insmaller elements suchasindium,platinum, rhodium in providing large-scale infrastructure, and iron, copper andaluminiumplay critical roles sustainably consumed. Bulkmetals suchas which placesboundsonwhat can be while renewable, hasalimited rate ofrenewal, concentrated (UNEP, 2015b).Biomass, are finite, andmany are geographically increasingly challenging.Ores andminerals and timelymanner year after year, willbe within theglobaleconomy, inasmooth

especially in resource-importing regions. resources, and increase resource security, improve equitable and affordable access to the negative economic impacts of price volatility, for resources, then it may be able to dampen If resource efficiency can reduce the demand high food prices. countries in2007-2008partlyresponse to attested by theriotsthat broke outinnumerous and even undermining peace andsecurity, as investment, owing to increased uncertainty; poorest andmost vulnerable groups; hampering restricting market access, particularlyamong the serious economic andsocialchallenges by High andvolatile resource prices can present an upward course again. the pricesofcommodities, including food, on demand growth inemerging countries willset by climate policy, itislikely that induecourse fuels, demandfor whichmay beconstrained (see Figure 6),andwiththeexception of fossil p.6). Despite thedramatic fall inprices2014 2000 to 2012(Dobbs et al.2013,Exhibit1, commodity pricesincreasing steadily over to anendat thestart ofthetwenty-first, with that characterized thetwentieth century came slow declineinresource andcommodity prices In addition,there is evidence that thelong, commodity pricemovements over 2010-15).

Summary for Policy-Makers

Figure 6: IMF commodity price indices, statistics, cropland covers 1,580 million hectares 2010-2015. (Mha) or close to 11 per cent of the world’s

(2005=100) land area, with agricultural land in total (also 225 including permanent pastures) covering 4,930 Energy Mha, or a third of the world’s land area. Total 200 agricultural land increased by about 11 per cent from 1961 to 2013 (FAO, 2016). Globally 175 Total

in 2005 humans consumed around 25 per Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers Non-Energy 150 cent of the total biomass produced on Earth’s land surface in that year (Haberl et al., 2014; 125 Krausmann et al., 2013). Recently, increases in agricultural land in regions such as South-East 100 Asia and South America have offset decreases 75 in regions such as Europe and North America Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 (FAO, 2016). Dalgaard et al. (2008) associate reductions in cropland in Europe with increased Source: IMF (2016) https://www.imf.org/external/np/ imports of soybean for cattle feed from Latin res/commod/index.aspx America, as these replace the domestic growing of fodder crops (Dalgaard et al. (2008), in UNEP 2.1.1.3 Sustainable use of (2014a), p. 25). The location of any expansion renewable resources of agricultural land is significant in terms of what type of land use it replaces, with the loss The third issue relates to the need for the of biodiversity-rich primary forests a particular sustainable use of renewable terrestrial concern in regions such as South America and and marine resources, such as soils, water, South-East Asia (UNEP, 2014a). biodiversity and fish stocks. These resources critically underpin the viability of such vital Global production of primary crops more sectors as agriculture, fisheries and forestry. than tripled from 1961 to 2013 (FAO, 2016). Over the same period, global cropland area Vast areas of land are now cultivated to meet increased by around 14 per cent (FAO, 2016). human needs and wants. According to FAO This was possible due to steady increases in the

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers possible outcome ofcontinued highproduction resource shortages andpricerisesare a geographically concentrated resources, and challenges. Fertilizer inputs are finite and expansion infood production, it comes with important to global supportanecessary Although thisproductivity increase hasbeen Source: Data from(FAO, 2016) and crop yields,1961-2013.Index: 1961=1. Figure 7:Growth incropland, agricultural inputs (FAO, 2016). almost three timesbetween 1990and2011 also asignificant input–theirapplication grew increasing by around five times. Pesticides are the period,withapplication of fertilizers cropland equippedfor irrigation doubled over inputs. Asshown inFigure 7,thearea of delivered by substantial increases inagricultural productivity ofland,whichinturn was Index: 1961=1 5 6 4 3 1 2 0

1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000

2003 2006 2009 2012 forirrigation Cropland area equipped Fertilisers Cropland yield Cropland area

based food (UNEP, 2009). land for agiven level ofnutritionthanplant- rearing animals requires nearlyfive timesmore by 90percent (FAO, 2015a).Food derived from (1990-2015) globalmeat consumption increased of theglobalpopulation. Inthesameperiod 1990, whichat that time was almost 19per cent people hasdecreased from around 1billionin 23 percent. Thenumberofundernourished Saharan Africa hasthehighest prevalence, at undernourished peoplelive inAsia,whilesub- were undernourished.More thanhalf ofthe people, 11percent oftheworld’s population, unevenly distributed. In2015about795million Rosegrant, 2009; UNEP, 2014a). Access to foodis associated withrisingaffluence (Msangiand hunger andmalnutrition,dietary changes by population increases, efforts to combat for food supplymay beexpected, driven At thesametime,anincreased demand al., (2008);(Bruinsma,2009;UNEP, 2014a). growth rates to continue to slow (von Witzke et previous decades, and experts expect yield cereals are increasing at aslower rate thanin indefinitely. There is evidence that yields for and pesticides can continue to increase yields not clearthat increasing application of fertilizers compounds causes pollution.Furthermore, itis extraction and concentrated application ofthese will bediscussedinthefollowing section,the (BMUB, 2012;Senthilkumar et al.,2014).As Summary for Policy-Makers

Owing to the expected continued future growth for biofuels and biomaterials, and loss of land in food demand, the OECD projects global to the built environment and soil degradation. agricultural land (cropland and permanent UNEP (2014a) estimates that from 2005 to 2050 pastures) to increase by a further 10 per cent by current trends will lead to a gross expansion of 2030, and by 14 per cent by 2050 (OECD, 2008). 320 – 849 Mha (an increase of 21 per cent to 55 UNEP (2014a) focuses on cropland expansion per cent) of global cropland.5 The contribution and considers – in addition to food demand – of different drivers to this projected cropland

other pressures, including increasing demand expansion is shown in Figure 8. Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

Figure 8: Trend of global cropland expansion from 2005 to 2050 for satisfying food demand and compensation of soil loss.

Low Estimate Mha High Estimate Legend

Gross expansion: + 800 Food supply + 849 Biofuel supply + 600 Biomaterial supply Net expansion: + 400 + 495 Compensation for Gross expansion: built environment + 320 + 200 Compensation for soil degradation Net expansion: + 123 0

Source: UNEP (2015c) http://www.unep.org/resourcepanel/Portals/50244/publications/Poster1-LandUse-FinalScreen.pdf

5 Net expansion of cropland results from rising demand for food and non-food biomass that cannot be compensated by higher yields. Gross expansion also includes the shift of cropland to other areas due to losses from severe land degradation – in particular from soil erosion – and built-up land.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers 2010. This rate of growth in water consumption in 1900 to 4,500 billion cubic metres per year in use grew from 600 billion cubic metres per year human need. Water consumption for human Access to clean water is another fundamental very limited. growth withinthe“safe operating space”is (FAO, 2016),itisclearthat thescope for further that cropland now covers around 1,580Mha With more recent FAO statistics suggesting cropland area usedasthebaselinefor thestudy. Mha, ora10percent increase from the2005 1,640 Mha.Thisrepresents anexpansion of140 for landonlyallows cropland to expand to upto UNEP’s estimate ofthe “safe operating space”

stressed orcritically depleted. A rate of water particular areas can become contaminated, water cyclewater isunchanging, resources in Though thetotal amount ofwater intheglobal between 1961 and 2013, as illustrated in Figure 7. the doubling of cropland equipped for irrigation the intensification of agriculture is evidenced by 2009; FAO, 2011). The importance of water to industrial and domestic demand (Addams et al., remainder being divided fairly evenly between for 71 per cent of global water withdrawals, the intensification. At present, agriculture accounts lifestyles, as well as industrial and agricultural 2012b), reflecting increasingly water-intensive was twice the rate of population growth (UNEP, Summary for Policy-Makers

withdrawal above 20 per cent of a region’s all have withdrawal rates greater than 50 per available internal renewable water resources cent. In Northern Africa it is 201 per cent, which (IRWR) “represents substantial pressure on implies that water is being extracted at a much water resources, and more than 40 per cent higher rate than it can be replenished, resulting is ‘critical’” (FAO, 2011). East and South-East in unsustainable depletion of rivers and aquifers Asia have withdrawal rates close to 20 per cent (FAO, 2011). The risk of water stress is unevenly IRWR, while Western, Central and South Asia distributed, as shown by Figure 9. Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers Figure 9: Total renewable water resources per capita (2013).

No data Absolute available scarcity Scarcity Stress Vulnerability

0 500 1 000 1 700 2 500 7 500 15 000 50 000

Note: The ﬁgures indicate total renewable water resources per capita in m³ Source: WWAP, with data from the FAO AQUASTAT database (http://www.fao.org/nr/water/aquastat/main/index.stm) (aggregate data for all countries except Andorra and Serbia, external data), and using UN-Water category thresholds.

Source: WWAP (2015), p.12

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Mobilizing billionsoftonnes of raw materials impacts ofresource extraction anduse. The fourth issuerelates to theenvironmental resource extraction anduse 2.1.1.4 Environmental impacts of of somefishpopulations. levels ofextraction threaten serious collapse are therefore overfished (FAO, 2014).These fished at biologically unsustainable levels and 61 percent are fullyfishedand29percent are exploitation. Of commercial fishpopulations, threatened by unsustainable levels of under pressure, withmarinebiomass Marine andaquatic ecosystems are also serious concern inmany partsoftheworld. (WWAP, 2015).Water scarcity istherefore a change could furtherexacerbate such problems prices, andindeedto conflict. Increasing climate et al.,2009). Thismay leadto effects on food this deficit (Addams islarger than50percent” in developing countries, willlive inbasins where that “one-third ofthepopulation, concentrated et al.,2009; WWAP, 2015).Theresult could be currently accessible,reliable supplies(Addams This iscalculated to be40percent higherthan cubic metres to 6,900billioncubicmetres. global water demandwillrisefrom 4,500billion growth andnoefficiency gains, by2030annual It isprojected that, withaverage economic

fertilizer inputs suchasphosphates can create increases inagricultural inputs. Theextraction of land hasbeenachieved through considerable 7 theincrease intheproductivity of agricultural biodiversity (UNEP, 2013b).Asshown inFigure corresponding effects onhuman healthand as through smelter stack emissions,with compounds into water, soilsandtheair, such for example the release oftoxic oracidic has significant environmental impacts, The extraction ofmetals andminerals also UNEP (2010). causing algal bloomsthat harmecosystems of environments suchaslakes withnutrients, causes “eutrophication” –the over-enrichment health; andemissionsofnitrogen, which toxic pollutants, whichare harmful to human the release ofsmallparticulates andother and sulfuroxides –SOx) that cause acidrain; of acidpollutants (nitrogen oxides –NOx, to climate change. Theseincludeemissions negative environmental impactsinaddition which are amajorsource ofawiderange of dominated by fossil fuels:coal, oilandgas, climate change. energy Globalprimary is fuels isthelargest contributor to anthropogenic The extraction and combustion of fossil loss ofbiodiversity. in terms ofpollution,landdegradation and each year hasseriousenvironmental effects,

Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

pollution through the release of heavy metals as its environmental quality (UNEP, 1997). The and radionuclides (BMUB, 2012). The increased main causes of land degradation are water application of nitrogen and phosphorus erosion, wind erosion, nutrient mining, water fertilizers has resulted in considerable nutrient logging and salinization caused by irrigation, pollution, including eutrophication, increases lowering of the water table, over-use of in atmospheric ozone, fine particulate chemical inputs, soil compaction and loss of matter, acidification of surface waters, which organic matter (FAO, 2015b; Scherr, 1999). contributes to biodiversity loss, and greenhouse Globally, according to FAO, about 25 per cent gas (GHG) emissions due to the production of of all land is highly degraded or fast degrading. nitrous oxide (N2O) (UNEP, 2014a). Moreover, Around 8 per cent is moderately degraded the production of fertilizers is energy-intensive with a moderate degradation trend, while 36 and generates energy-related CO2. Pesticides, per cent is slightly or moderately degraded but fungicides and bactericides, which have grown stable. Only 10 per cent of land has started in use substantially since 1990 (FAO, 2016), also improving (FAO, 2011). have negative environmental impacts. Intensive land use can also degrade the Overall, the four issues discussed above “productive capacity” of the land itself, as well constitute significant threats to achieving

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Meeting at the21 a cost-effective manner meeting climate change targets in resource efficiency are essential for 2.1.2 Substantial increases in services. those resources andrelated provisioning protecting theecological systems that underpin affordable access to those resources; and all theworld’s peopleto gain equitable and human development; improving theabilityof availability ofresources that are crucialto diminishing thesethreats by increasing the the SDGs.Resource efficiency iscentral to 6 and for GHGemissions to be“nearzero Gt 2050 to be40-70percent lower thanin 2010, scenarios require globalGHGemissionsin 450 partspermillion(ppm)CO atmospheric concentrations in2100ofabout this goal isachieved, “are characterized by (IPCC) Intergovernmental Panel onClimate Change above pre-industrial levels. According to the keep globaltemperature rise to lessthan2°C 2015, theworld’s governments pledged to on Climate Change (UNFCCC) (COP 21)to theUNFramework Convention Gigatonnes carbon dioxide equivalent. , scenarios in which it is “likely” that, scenariosinwhichitis“likely” st Conference ofParties inParis in 2 eq”. Such

then usedinoneofthesectors. vector –suchasheat orelectricity–whichis production ofanintermediary fuelorenergy emissions refer to theemissionsarisingfrom the Source: IPCC(2014) (Gt CO Figure 10:Total anthropogenic GHGemissions forestry andotherlanduse industry, transport, buildings,andagriculture, within theeconomic sector listed. Indirect CO Direct emissionsrefer to emissionsgenerated GHG emissionsin2010by economic sector. 10 shows thebreakdown ofanthropogenic CO Industry Buildings 25% 6.4% and Heat Production Electricity Energy Other 21% 24% 9.6% 14% AFOLU Transport 2 eq 2 6 eq peryear) by economic sector: energy, orbelow in2100” Direct Emissions 49 GtCO₂ eq (2010) (AFOLU). (IPCC, 2014) Indirect C0 ₂ Emissions . Figure 1.4% 0.87% Transport 11% 12% Energy AFOLU Industry Buildings 0.3%

Summary for Policy-Makers

In order to achieve the emissions reductions In the light of this conclusion, the International consistent with a 450 ppm scenario, the large- Resource Panel (IRP) sent 10 Key Messages on scale deployment of low-carbon technologies Climate Change to the COP21 Climate Summit in energy and land use systems will be critical, in Paris. The IRP concluded these messages as is explored in detail in numerous scenarios as follows: “Raising resource productivity by the IPCC and others (IEA, 2010, 2012a; IPCC, through improved efficiency and reducing 2014). However, in addition to supply-side resource waste … can greatly lower both

decarbonization, energy demand reduction resource consumption and GHG emissions. Such Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers through resource efficiency will also have a measures also confer additional, highly desirable crucial role. The IPCC states that “efficiency social benefits such as more equitable access to enhancements and behavioural changes, in resources and invaluable environmental gains order to reduce energy demand compared such as reduced pollution. Decoupling economic to baseline scenarios without compromising growth and human wellbeing from resource use development, are a key mitigation strategy has, therefore, to be an integral part and prime in scenarios reaching atmospheric CO2eq concern of climate policy” (UNEP, 2015a). concentrations of about 450 to about 500 ppm by 2100 (robust evidence, high agreement)” Taken together, the challenges of achieving (IPCC, 2014). Among such scenarios, the median the SDGs and meeting climate change targets level of demand reduction relative to baselines provide a strong imperative for resource in the transport, buildings and industry sectors efficiency, which will be needed to reduce the is between 20 per cent and 30 per cent in threats arising from unsustainable resource each case. Some of the scenarios analysed consumption. show even higher sectoral demand reductions of up to 60 per cent (IPCC, 2014). Increasing But there is also evidence that resource resource efficiency is a critical strategy to efficiency can bring substantial economic enable such necessary demand reductions to be benefits, including higher rates of economic achieved, without negatively affecting human growth and increased employment. This development and well-being. evidence is documented below.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers would be $2.9 trillion per year. In 70 per cent of implementing allthe technologies considered private investor, the savings in 2030 arising from (2011). Thisstates that from the perspectivea of one ofthe most often cited isfrom Dobbs et al. costs ofincreasing resource efficiency, ofwhich There have been anumberofestimates ofthe resource efficiency 2.2.1 Costs andbenefits ofincreasing to increase economic outputandemployment. macroeconomic implications, withthepotential increased resource efficiency have positive And third, thecost reductions arisingfrom resource usebringsubstantial external costs. the negative environmental effects ofinefficient that would provide net cost savings. Second, there are ways to increase resource efficiency efficiency may be expressed inthree ways. First, The economic opportunityofincreased resource increased resource efficiency 2.2 Theeconomic opportunityof 8 7 While Sorrell et al.(2004)seemto bethinkingofprivate organizations in this connection, such failure couldapply topublic These benefits have been calculated at themarket pricesof resources prevailing in2010. To the extent that resource priceshave de- bodies aswell. achieve environmental improvements at lower cost thanthrough othermeans. resource efficiency can present opportunities to reduce firms’and countries’ vulnerability toprice volatility, and may provide ways to clined since2010,andthisisespecially trueoffossil fuels,thebenefits of resource efficiency willbe proportionally less.But eventhen • • investments istheproduct ofthree phenomena: failure to make cost-effective energy efficiency resources. Sorrell et al.(2004)suggest that the the arguments applyequallywell to other thoroughly explored for energy efficiency, but realize thesebenefits. Thisissuehasbeenmost do notmake investments thenecessary to investments inresource efficiency, investors such beneficial cost-saving opportunities from It may immediately beasked why, ifthere are million jobs” (Dobbs et al.,2011, p.12). required “could potentially create 9million to 25 cent per year. The total $900 billion investment would offer a rate of return greater than10per cases, therequired resource-efficient investment policy imperfect organizational structure and Organizational failure information; competition and asymmetric orimperfect and negative externalities, imperfect result of incomplete property rights, positive Market failure 8 ; and , normallyidentified asa , asaresult of

Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

• Non-failure, where organizations and The existence, strength and persistence of these individuals are in fact behaving rationally in barriers vary from issue to issue. Therefore, not taking up the efficiency opportunities attempts to improve resource efficiency should because of hidden costs. These may seek to understand the barriers individually, in include “overhead costs for management, order to correctly identify the most appropriate disruptions to production, staff replacement measures to surmount them. In doing so, there and training, and the costs associated is evidence that increasing resource efficiency with gathering, analysing and applying will tend to strengthen the innovation capacity information” (Sorrell et al., 2004, p.55). of economies (Bringezu, 2015).

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers in fossil fuel consumption could beachieved et al.,2015).Muchoftherequired reduction regional GDP withsubsidy elimination (Coady a welfare gain equivalent to 6.9percent of population livingin Asia,which experiences to themore than50percent oftheworld’s GDP in2013.Most ofthisgain would accrue trillion, equivalent to 2percent ofglobal externalities) isestimated tobeUS$1.4 is, thosedueto bothfinancialsubsidiesand from eliminating all fossil fuelsubsidies (that potential global gain ineconomic welfare in 2015to bearound US$4trillion.The local airpollutionfrom burning fossil fuels external costs related to climate change and The IMF(Coadyet al.,2015)estimated the subsidies to that use,are very large indeed. resource use,whichmay alsobeconsidered The environmental externalities of which they may result. any otherbenefits (suchas cost savings) in improve economic efficiency, over andabove measures that reduce theseexternalities will in market transactions. Resource efficiency environment, that are nottaken into account is, negative impacts, for example onthe results innegative externalities –that The extraction anduseof resources often externalities 2.2.2 Thebenefits of reducing

Summary for Policy-Makers

through increased energy efficiency rather financial subsidies to energy, agriculture and than reduction in energy service delivery (IEA, water were removed. 90 per cent of this US 2012b). $3.7 trillion saving would yield an investment return of more than 4 per cent. The authors Dobbs et al. (2011) calculate that savings to group their resource efficiency “opportunities” society from resource efficiency would increase into 15 categories that capture approximately from US $2.9 trillion from a private investor 75 per cent of this US $3.7 trillion saving. These

perspective to US $3.7 trillion from a social categories are shown in Figure 11. Of these 15 Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers perspective if carbon were priced at US $30 categories, only electric and hybrid vehicles per tonne, energy taxes were eliminated, and have a cost that is greater than the benefit.

Figure 11: The top 15 categories of resource efficiency potential.

Fifteen groups of opportunities represent Energy Land 75 percent of the resource savings Water Steel Societal persepective, 2030 Total resource beneﬁt¹ Average societal cost $ billion (2010 dollars) eﬃciency²

Building energy efficiency 696 0.5 Large-scale farm yields 266 0.4 Food waste 252 0.5 Municipal water leakage 167 0.2 Urban densification 155 0.9 Iron and steel energy efficiency 145 0.2 Smallholder farm yields 143 0.4 Transport efficiency 138 0.5 Electric and hybrid vehicles 138 1.2 Land degradiation 134 0.5 End-use steel efficiency 132 0.4 Oil and coal recovery 115 0.5 Irrigation techniques 115 0.2 Road freight shift 108 0.7 Power plant efficiency 106 0.3 Other³ 892 0.6 1 Based on current prices for energy, steel, and food plus unsubsidized water prices and a shadow cost for carbon 2 Annualized cost of implementation divided by annual total resource benefit 3 Includes other opportunities such as food efficiency, industrial water efficiency, air transport, municipal water, steel recycling, wastewater reuse, and other industrial energy efficiency SOURCE: McKinsey analysis

Source: Dobbs et al. (2011), Exhibit 4, p. 14 Note: in the figure above, ‘resource savings’ refers to the financial benefits of resource efficiency

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers 2015). In this case the result was driven by McKinsey Center for Business and Environment, trends (Ellen MacArthur Foundation and with 4 per cent and 15 per cent under current per cent by 2050 in a circular scenario, compared European GDP by 11 per cent by 2030 and 27 food waste and transport could increase resource efficiency opportunities in buildings, economy, which found that implementing Another example is a report on the circular exporters worse off. energy-importing countries, butmakingenergy 2035, withenergy efficiency policiesbenefitting global GDPwould increase by 0.4percent by compared withtheIEA New Policies Scenario, of itsEfficient WorldScenario.It foundthat, calculated themacroeconomic implications efficiency, an example is IEA (2012b),which macroeconomic effects ofincreasing energy In respect ofmodellingstudies ofthe yields macroeconomic benefits. All suggest that increasing resource efficiency have beenundertaken usingdifferent models. implications ofincreased resource efficiency Investigations into themacroeconomic resource efficiency 2.2.3 Themacroeconomic benefits of 10 Theanalysis assumesthat: “an environmental tax suchasanemission tax isusedto cutGHGemissions,but revenues generated are used to stimulate theeconomy at the same time.” (CEandBioIS,2014, p.46). (BAU) investment paths UNEP(2011b).The outcomes ofGreen andBusinessasUsual Finally, UNEPcompared theeconomic the reference scenario(Meyer et al.,2015). cent, driven largely by higherinvestment thanin abiotic raw materials falls by more than50per GDP by 5.2percent in 2050, whiletheuseof resource efficiency measures increase global study usingasimilarmodelfound that the environmental tax reform (ETR). policy mechanismusedto bring itabout–an increase inresource productivity as by the increase inGDPisdriven notsomuchby the and BioIS,2014).However, inthiscase the with net positive impactsonEU28GDP(CE per cent perannumcould be achieved improvements ofaround 2percent to 2.5 Commission found that resource productivity exercise undertaken for theEuropean A different macro-econometric modelling above (Böhringer and Rutherford, 2015). the barriers to increased efficiency mentioned achieving this technical change, or overcoming is taken of any costs that may be incurred in that in the execution of this modelling no account the use of resources. However, it should be noted technical progress leading to cost reductions in 10 Another Summary for Policy-Makers

study found that economic growth in the through what is called the “rebound effect”. This Green scenario became higher than that in arises because money saved through resource the BAU run after about 2017, with the green efficiency can be spent either on more of the investments proving more productive than the same good or service, or on other goods or conventional investments they replaced services, both of which may increase resource (UNEP 2011b, Figure 14, p.523). use. Rebound effects can be mitigated by policy measures (Herring and Sorrell, 2009), most

If increased resource efficiency leads to obviously where these measures increase Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers increased output, then other things being equal the cost of the resource that has been the it might be expected that it would also lead to subject of the efficiency measure (for example, increased employment, and this is indeed the through resource or environmental taxation). result of some studies. Thus the CE and BioIS This will be required where the objective of (2014) study reports a 1 per cent increase in EU resource efficiency improvements is actually employment (about 2 million net extra jobs) in to reduce the quantity of resources used or its its resource efficiency scenario by 2030, with associated environmental impacts by a given similar gains reported by Meyer et al. (2015). amount (for example, if increases in energy In the UNEP (2011b) Green scenario, global efficiency are intended to aid the attainment employment is 0.6 per cent (21 million) lower of fixed carbon reduction targets), and explains in 2020 than in the comparable BAU case, but why publications focusing on green growth or 28 million higher by 2050. A report by the increased resource efficiency often advocate Club of Rome that uses an input-output model a shift of taxation from labour or capital to rather than a full macroeconomic model finds pollution or the use of resources (for example, that measures to increase energy and resource OECD, 2015; UNIDO, 2013; World Bank, 2015). efficiency, and the deployment of renewables, Macroeconomic modelling results such as can reduce unemployment by up to a third in those reported above should include any the five European countries studied (Wijkman rebound effects, which are likely to counteract and Skånberg, 2015) to some extent the impact of resource efficiency on reducing consumption and related It should be noted that, if increased resource environmental impacts. efficiency is achieved, there is a danger that the economic growth it has stimulated will increase resource use and environmental impacts

31 32

Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers efficiency increasing resource 3. Bestpractices for 11 T of thismodellingexercise willfeature intheforthcoming fullIRPAssessment Report summarized here (UNEP, forthcoming in2016a). approach usedintheAustralian National Outlook (seeHatfield-Dodds etal.2015).Further details oftheanalytical approach and results flow modelproviding insights into resource efficiency potential. Thisbuildson internationally recognized integrated nexus modelling economic model(GTEM) to two othermodels:GLOBOIM, providing additionaldetail onlanduseandbiofuels,MEFISTO, a stock- The scenarioprojections are developed usingamulti-model framework, linking aglobal computable general equilibrium (CGE) economic growth and employment, for most efficiency carriedout for this studyfurther of them even whenenvironmental benefits are not taken into account. Original economic modellingof resource resource efficiency can lead to higher section differ inthesize oftheir estimates, but all of them show that increasing he modelling studies cited in the previous economic activity to 2050,through ambitious confirms suchtrends. Thenovel analysis adopts anintegrated multi-modelframework potential to achieve economically attractive address climate change. action to improve resource efficiency and resource use, greenhouse emissions,and work are summarisedinthesixgraphs of to explore potential future pathways for global Figure 12,whichshow that there issubstantial 11 Theresults ofthis Summary for Policy-Makers

resource efficiency, providing win-win outcomes 2050 (top left graph), against the baseline. that reduce environmental pressures while When resource efficiency is implemented in increasing economic growth. The modelling combination with ambitious global action on projects that, under existing trends, natural climate change, global resource extraction can resource extraction will increase from 85 to 186 be reduced even further by up to 28 per cent, billion tonnes over the next 34 years to 2050 compared to existing trends (top left graph). (top left graph), reflecting a 28 percent increase In this scenario, the modelling also finds that

in population and a 71 percent increase in per the stronger economic growth associated with Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers capita resource use. In contrast, the modelling resource efficiency policies more than offsets suggests that resource efficiency policies and the near-term economic costs of ambitious initiatives alone could reduce global resource climate action, helping to achieve emissions extraction by around 17 per cent globally in reductions of around 60 percent globally (top

Figure 12: Global and G7 projected resource use, economic activity and GHG emissions under existing trends, resource efficiency policies, and resource efficiency plus a 2°C climate pathway, 2010-2050.

Global Resource Use (DMC) Global economic activity (GWP) per capita Global Greenhouse Gas Emissions

200 16 80

1.6% 15% 150 12 higher in 60 increase from 2015 17-28% 2050 100 reduction 8 40 in 2050 Gt CO₂e 50 4 20 $’000 USD (2015 real ) $’000 USD (2015 real 62% reduction 0 0 Billion Tonnes (DMC) Billion Tonnes 0 from 2015 2030 2040 2010 2030 2040 2050 2020 2050 2060 2020 2010 2020 2030 2040 2050

G7 Resource Use (DMC) G7 economic activity (GDP) per capita G7 Greenhouse Gas Emissions 40 80 20

15-85% 30 60 15 reduction 1.3% from 2015 higher in 20 40 2050 10 22-31%

reduction Gt CO₂e

Billion Tonnes (DMC) Billion Tonnes 10 in 2050 20 5 $’000 USD (2015 real ) $’000 USD (2015 real

0 0 0 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Existing Trends (3�C pathway) Resource Eﬃciency (3�C pathway) Resource Eﬃciency plus (2�C pathway)

Policy impacts are for Resource Eﬃciency (blue stripes) and Eﬃciency Plus (green solid) scenarios in 2050, relative to Existing Trends of 2015 Source: UNEP (forthcoming in 2016a).

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers 12 1 percent globally(top middlegraph) andinG7 efficiency has been successfully increased explores best-practice examples of how resource efficiency are being successfully addressed, examples of how barriers to increased resource countries (bottom middlegraph) in2050. cutting, systemic or “resource nexus” issues. concludes by stressing theimportance ofcross- communities. The main part of this section governments, businessesandcitizens and 2050, compared to existing trends in2050, by 2015 levels. Thisputstheworld ontrack to across the four main categories of resources – right graph) and85percent inG7nations resource efficiency improvements is beyond the materials, land and soils, water, and energy. It practice. The ensuing part of the report presents policy-makers andotherstakeholders onhow scope ofthisreport, Though analysis ofpolicyoptions to support valuable information and knowledge for the committed actions of local and national the implementation of new concepts, and through international and national programmes, (bottom right graph) by 2050, relative to increased resource efficiency can be realized in boosting the value of economic activityin limit climate change to well below 2°C, while Implications. G7 to develop policyguidanceto supplement theIRP’s scientific synthesis reporton This task isbeingundertaken by theOrganisation for Economic Co-operation and Development (OECD), which was invited bythe

12 it nonetheless provides effective. Butthere are many otherbarriers to efficiency, even whenthey seem tobe cost- of labourandlogistics to design,manage and costs oflabourandlogistics. Components and resource efficiency and resource efficiency, expressed through low as expressed through well-functioning markets, are market andorganizational failures and avoidance ofanew purchase. For example, in and ofgenerating waste, compared to the resource efficiency that arisebecause ofthe not justify thesaved material cost orthe repair thecomponents andproducts does not happenbecause theaddedcosts interms more easily. However, thissometimes does process, to last longer andto berepaired products could inmany cases bedesignedwith The most important ofthesebarriers arises wastage ofmaterials andtheirretention of 3.1 Overcoming barriers to value over longperiodsoftime. Section 2ofthis report showed that there basic difference between economic efficiency, hidden costs that prevent increases inresource less material wastage duringthemanufacturing less material to meet theirdesignpurpose,with because ofthe relatively low cost ofmaterials Resource Efficiency: Potential and Economic Summary for Policy-Makers

the construction sector, materials are often be noted that it will be impossible to achieve found to be over-specified beyond the needs considerable increases in resource efficiency of the safety standards (UNEP, 2014b). Material across the economy in their absence. wastage during manufacture of products and components can also occur when parts are cut 3.2 Initiatives and programmes for from standardized intermediate products such increased resource efficiency as metal sheets, leaving as much as half of

the original material behind as waste. In many There are numerous international programmes Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers situations, “counter to expectations, it makes and initiatives to increase resource efficiency, good business sense to over-specify materials and even more at national levels. This when doing so allows a greater saving in labour report mentions a few important initiatives to costs, and this is a difficult issue to overcome” exemplify what public policy and committed (Allwood, 2014). corporate and citizen action can achieve.

There are also innumerable examples in daily One of the most systematic approaches experience of when it is cheaper to throw away to increasing resource efficiency at the even relatively new products than to have them international level has been through repaired, even when repair is possible. Such the concept of Sustainable Consumption resource-inefficient outcomes frequently reflect and Production (SCP). The 10-Year Framework an economically efficient calculus of the relative of Programmes on Sustainable Consumption magnitude of the costs of materials, and the and Production (10YFP) was adopted at costs of design, logistics and repair. the Rio+20 conference in 2012 as a mechanism for achieving this shift in consumption and Remedying such situations requires public production patterns (UN, 2012). The 10YFP policies either that change directly the relative programmes are organized around thematic prices of labour and materials, for example areas, which aim to build capacity to implement through reduced labour and increased resource policies, voluntary instruments, management taxation, or which in other ways give greater practices, information and awareness-raising value to materials during and at the end of activities to promote the shift to SCP patterns. the lives of the components and products in Another global programme is the Resource which they are embodied. Such policies are Efficient and Cleaner Production (RECP) outside the scope of this report, but it should initiative, which seeks to improve industrial

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers eco-industrial parks, transfer ofenvironmentally diminishing thegeneration of waste and dependence onnatural resources and approaches, product andorganizational foot- and safe andinnovative chemicals management and transition economies. Activitiesinclude productivity while reducing industry’s models, water stewardship, life-cycle based pursue RECP practices inmany developing sound technologies, responsible production 60 National CleanerProduction Centres that (including chemical leasing),new business industrial waste minimization, eco-innovation, harmful emissions.There are now around – whichdefines circular economy as “one that others. Arecent example is theinitiative ofthe all times,distinguishing between technical and printing, eco-labellingprinting, and corporate reposting materials at theirhighest utilityand value at promoted internationally, including by China, The ideaofa“circular isalso economy” which aimsto keep products, components and the European Commission,Japanandmany is restorative and regenerative bydesign,and (UNEP, 2016a;UNIDOandUNEP, 2015). Ellen MacArthurFoundation. The Foundation biological cycles” –works through anumber Summary for Policy-Makers

of programmes. These seek to bring together reduce, reuse, recycle. In the context of businesses, governments, cities and universities, the G7, the 3R concept has played a key role so as to accelerate a shift towards and build within resource efficiency strategies. The 3R capacity around a circular economy (Ellen Initiative to encourage more efficient use of MacArthur Foundation, 2016). resources and materials was launched at the 3R Ministerial Conference in Tokyo in April 2005 China adopted the Circular Economy Promotion (Moriguchi, 2007; Takiguchi and Takemoto,

Law in 2008. The legislation aims to decrease 2008). Later in 2008, the Kobe 3R Action Plan Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers the use, and maximize the recycling and was adopted under the Japanese presidency recovery of materials in production and of the G8. consumption. As part of its implementation, the country has launched a large number of The 3Rs concept can of course be built upon programmes and projects.13 and expanded. Each of the terms can be considered a broad designator for a variety In 2015 the European Commission adopted of activities. In Japan, the sound material- a Circular Economy Package to stimulate cycle society (SMCS) policy sets out five steps the transition of European businesses and in order of priority: reduce, reuse, recycle, consumers towards a circular economy, where energy recovery and final disposal. A similar resources are used in a more sustainable waste hierarchy is adopted in the EU’s Waste manner. The mix of regulation and incentives Framework Directive. to encourage greater recycling and reuse is envisaged to help protect the environment and The Kobe 3R Action Plan was also the mitigate climate change, alongside fostering building block for the G7 Alliance on Resource economic growth, job creation, investment and Efficiency, established in 2015 as a forum to social fairness (European Commission, 2015). share knowledge, and to collaborate with businesses, small and medium enterprises Many countries have found it useful to frame (SMEs) and other relevant stakeholders to their policies for resource efficiency in terms of advance resource efficiency opportunities, a resource management hierarchy, one of the practices and innovation (G7, 2015). most influential of which has been “the 3Rs” –

13 Circular Economy Promotion Law of the People’s Republic of China, http://www.fdi.gov.cn/1800000121_39_597_0_7.html

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers of successful resource efficiency efficiency agency (demea) offers quantified efficiency canyieldquickbenefits forsome energy), butwithoutlosingsight oftheircritical demand would bethefirst priorityofmaterial are becoming increasingly aware ofthe and complex interactions, synergies and material flow analysis to helpsmalland medium- processing materials. Experience inGermany management strategies, asitreduces theenergy material efficiency policynotjust asa fixed resource management hierarchy, andseeing number ofbest practices andsolutions for received thegreater partofpolicyattention use andenvironmental impactsofextracting and suggests that, withguidance,improving material strategies andtargets. However, governments The ensuingpartofthereport documents a 3.3 Best practice examples target, butasatransition path. Ideally, reducing trade-offs. through national andlocal government 3.3.1 Materials (namely, materials, landandsoils,water, and increasing resource efficiency. Itdistinguishes In thearea ofmaterials, recycling hasto date businesses. TheGermangovernment’s material benefits ofmoving upwards through the between different categories of resources

of thecomponent by 25percent (Despeisse off-cuts left over from material blanking sheets. components to be produced to specification with 2.3 percent ofannualcompany turnover, with Abbey Steel inthe UKhasfound anicheusing development inthisregard may beadvances assist better designofthearrangement of and Ford, 2015).Computerization can also potential for mutualbenefit. For example, metals (Allwood, 2014;UNEP, 2014b). manufacturing. Suchtechniques are usedin the reducing material wastage duringcomponent nozzles for jet enginesinthismanner, with no wastage. General Electricisnow producing manufacturing are likely through improved manufacturers and cutsitinto regular blanks smaller companies saving agreater proportion. savings potentials. On average, companies saved sized enterprises (SMEs)to identify material significant material saving reducing the weight textile industry andare alsobeingadopted for Synergies between companies alsooffer in 3Dprinting. Thisallows highlycustomized innovative designapproaches. Animportant (UNIDO, 2013). More substantial material reductions in product Investments generally paidoff within13months It purchases blanking scrap from car body for manufacturers ofsmallercomponents blanks to fitmore closelyonafixed widthsheet, Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

(Allwood, 2014). This is an example of industrial For example, the Kawasaki Eco-Town “aims symbiosis.14 primarily for effective utilization of residential, commercial and industrial wastes generated in The industrial symbiosis concept is also at the city and recycling these into raw materials the heart of the Japanese Eco-Town that can be used by industries located in the programme, which has led to the establishment city (for example, cement and iron and steel of 26 Eco-Towns across Japan. The aim of this works)” (Van Berkel et al., 2009). Specific government-led programme was to reduce examples of recycling activities in Kawasaki waste going to landfill sites, of which there are recycling of plastic as a reductant for was a serious shortage, and to regenerate local blast furnaces, for concrete formwork and for industries. As such a key strategy was ammonia production; as well as paper recycling the conversion of waste from one industrial and PET-to-PET15 plastic recycling. As well as process into a valuable input for another reducing material waste, Dong et al. (2014) (Van Berkel et al., 2009). estimate that the industrial symbiosis strategy

14 The classic definition of industrial symbiosis comes from Chertow (2000, p.313): “[I]ndustrial symbiosis engages traditionally separate industries in a collective approach to competitive advantage involving physical exchange of materials, energy, water and by-products.” There are numerous case studies of successful applications of industrial symbiosis, through the work of the National Industrial Symbiosis Programme (NISP), which was pioneered in the UK but has now been replicated across 25 countries (see NISP 2009 and http://www. nispnetwork.com/media-centre/case-studies). 15 PET stands for polyethylene terephthalate.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers environmental industries. every government-subsidized recycling plant, of nearly2milliontonnes ofwaste peryear. government actions to establish anindustrial As aresult ofgovernment subsidies, 61 a further1.5plants were builtby the private recycling facilities have beenestablished across symbiosis “ecosystem” can actasaspringboard sector withoutsubsidy. Thissuggests that steel, cement andpapermanufacture. the 26Eco-Towns, withacombined capacity in Kawasaki reduced life-cycle carbon emissions However, Van Berkel et al.(2009)findthat for for further private sector-led development of by around 14per cent, mainlyfrom iron and emissions by 11percent (Yu et al.,2014; energy; red mudfrom alumina production alumina production; carbon monoxide off-gas reused asabuilding material. Themeasures power plants usedto make bricks; carbide slag usedasasubstitute for slaked limein symbiosis links, includingcoal ashfrom The cluster hasestablished 11industrial with aluminiumproduction at its core. Yu et al.,2015). Yu et al.(2014)report ontheXinfa group of industries, acluster ofvarious process plants in othercountries. Inthecase ofChina, Industrial symbiosis isalsowell established from the calcium carbide factory burnedfor have beenestimated to reduce carbon

Summary for Policy-Makers

Park et al. (2016) report on the first phase of remanufacture of appliances, packaging and the Eco-Industrial Park (EIP) programme in automotive parts. A related observation is Korea, from 2005 to 2010. The projects involved that “successful remanufacturing tends to product, energy and water reuse between occur in more vertically integrated companies, industries. They calculate that the 47 projects but it is not clear if this is cause or effect”. reduced material waste by 477,633 tonnes, as Products that have been amenable to well as saving energy and reducing emissions successful remanufacturing “are typically at

and wastewater. The projects also generated the mature end of their life cycle, in a market Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers around US $97 million of cost reduction from with slow technology development” (Allwood energy and material savings, and US $92 million et al., 2011, p. 370). This guards against of revenue generation from selling by-products. components becoming redundant before the The authors observe that projects to generate remanufacturing cycle is complete. revenue from by-products tend to have a higher The frequent coincidence of remanufacturing rate of return than projects to generate savings with vertical integration and mature from material and energy efficiencies, due to technologies suggest that potential barriers, in the larger upfront investment typically required addition to waste regulation, may be the multi- in the latter case (Park et al., 2016). actor and fast-evolving nature of many product markets and their supply chains. Considerable Remanufacturing is another concept with attention to cross- and within-industry growing interest. It involves the disassembly of coordination and communication between product components and their remanufacture various, sometimes competing, actors, may be into modules or products with “as new” crucial to facilitate further development of this qualities. Potential barriers to remanufacturing promising area. are the public perception of the goods as second hand, regulations that inhibit re-entry of Many of the novel approaches to material material once classified as waste into the supply efficiency discussed in this section could be chain, as well as market access restrictions of assisted by the emergence of new business remanufactured products. models. Product service systems such as leasing are important and widely transferable models. Allwood et al. (2011) list some examples of In general terms, rather than a customer buying remanufacturing, including remanufacturing and owning an individual product, a leasing of engine blocks, tyre remanufacture, the model involves a customer contracting with

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers extended “and may include the management of outsource thechemical cleaningactivitiesthat chemical cleaning services forchemical cleaningservices anAustrian coated – rather than the chemicals themselves. clubs, building services and office supplies of leasing models can be seen in car-sharing ongoing contract placesagreater incentive on market conditions due to theirhighupfront manufacturer ofcar parts,Automobiltechnik an Austrian manufacturer of metal-cleaning a company for theprovision The ofaservice. machines, andSAFECHEM, asubsidiary ofthe number ofpiecescleaned, orarea ofproducts stability ofthecontract enabled thecontractors These partners were contracted to provide The responsibility of the producer is thus scale an interesting example is chemical leasing. which would notnormallybechosenintypical were notwithinitscore competencies. The to invest in high-quality cleaningequipment, the entire life-cycle” of the chemical products that can be operated, maintained or replaced the company to design and provide products (UNIDO, 2013). One such project, reported by (UNIDO, 2013;WRAP, 2016a).At theindustrial in amore resource-efficient manner. Examples With chemical leasing the producer sells the Blau. Themodelallowed thecustomer to Dow Chemical Company of Düsseldorf, Germany. Erbel (2008), isacollaboration between PERO, functions performed by thechemicals –suchas estimated that arrangements ofthiskind can compared to production from extracted of bulkmetals hassignificant energy benefits cent), andrates for precious metals suchas can beaccessedfrom waste streams, andthe cost, butwhichyieldlonger-term returns. This gold, silver andplatinum are alsoquite high and aluminiumare already high(60to 90per rate above 50percent and34elements are per cent, and90-97percent ofenergy used recycling can reduce 60-75 percent, 84-88 raw material: steel, copper, and aluminium and cost oftechnologies are abarrier. Recycling reduce energy useby around 50percent and positive returns by itssecond year. Itis pilot project was expected to begenerating rates alsovary amongmaterials, largely driven reasons. For somecountries lackofaccessto such aslithium,gallium, germanium, indium some bulkmetals suchasiron, zinc,copper solvent useby around 70percent (Erbel,2008). 60 metals studied have anend-of-life recycling value ofthosematerials. Recycling rates of (UNEP, 2013b).However, according to astudy (50 to 70percent) (UNEP, 2015a).Recycling Recycling rates vary highlyamongcountries for metal primary production, respectively for administrative, economic and technical below onepercent recycling. Specialtymetals by UNEP(2011c),lessthanone-third of some by theconvenience withwhichthematerials Summary for Policy-Makers

and tellurium are amongst those with lower cent for household waste in 2014,16 while recycling rates. They are typically used in very the overall proportion of UK waste that was small quantities in individual products, which landfilled in 2012 was 26 per cent.17 While are often not designed in a way that facilitates other policies will certainly have contributed disassembly for recycling. They also do not to this major change in waste management have the inherent value of precious metals, so practices, the landfill tax is likely to have played that there is insufficient economic incentive a very significant role.

to collect, extract and recycle them. Increases Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers in the recycling rates of such metals may be Zero Waste Europe reported two case facilitated if products were designed with a studies from different regions of Northern Italy. view to their disassembly and recycling at In the town of Capannori and in the city of the end of their lives. Recycling of specialty Treviso, rates of domestic waste segregation metals may become increasingly important as a for recycling now exceed 80 per cent. In both number of such metals are key constituents of areas, residents segregate their recyclable low-carbon technologies such as solar PV cells, waste into multiple streams. They are wind turbines and batteries. incentivized by “pay as you throw” systems, under which they are charged according to Incentives for resource efficiency are also the weight of non-recyclable waste. Incentives important for waste management. For example, are also provided in both municipalities to in the 1990s the great majority of UK waste was encourage composting. Transparency and sent to landfills, because this was the cheapest communication are also important to the mode of waste disposal, once the costs of success of the schemes. In Capannori residents collection and infrastructure for recycling were were extensively consulted and provided with taken into account. In 1996 the UK introduced information prior to the introduction of the a landfill tax for non-inert waste at the rate of measures, and in Treviso an online database GBP £7 per tonne, which increased steadily allows residents to track what waste has been in the following years, reaching GBP £82 per collected from them and to understand how tonne in 2015. Recycling rates in the UK have their charges have been calculated (Simon, also increased greatly, reaching nearly 45 per 2015; Van Vliet, 2013).

16 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/496508/Digest_waste_resource_2016_v2.pdf 17 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/487916/UK_Statistics_on_Waste_statistical_ notice_15_12_2015_update_f2.pdf

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers current trends inlanddegradation could result As noted inSection2, continuation of degraded landthrough practices that retain restoration ofdegraded agricultural land, and such resource efficiency strategies could reduce soil nutrients, are important strategies towards whilst reducing resource andenvironmental the protection ofcurrently stable ormildly 3.3.2 Landandsoils impacts. UNEP(2014a)estimate that amixof improving theoverall productivity ofagriculture in aconsiderable lossofarable landandneed for furthercropland expansion. Hence,the

ecological approaches, conservation agriculture, organic agriculture, agroforestry andintegrated case beunaffordable for low-income farmers. greater environmental impacts,andmay inany global cropland shown inFigure 8by about160- do notdecrease wheninputsare notincreased”. management system asoneinwhich“outputs There are anumber ofintegrated approaches 320 Mha. that aimtowards thisideal,suchasagro- the projected 320-849Mhaincrease ingross Monteith (1990)describesasustainable land High-input agricultural systems tend to entail Summary for Policy-Makers

crop-livestock systems (FAO, 2011). As one Conservation Farming Unit, maize yields example, Altieri (2002) identifies a number of from fields planted with acacias averaged principles of sustainable agroecology: 4.1 t/ha, compared to 1.3 t/ha outside of the tree canopy (FAO, 2011). • Recycle and reuse all available biomass within the farming system. Zero- or no-till practices can help to protect • Grow plants by building soils, soil organic soils and reduce moisture loss. The benefits of

material and biotic activity. reusing all available biomass may pay particular Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers • Minimize soil losses by protecting from dividends in integrated crop-livestock systems. direct solar radiation, strong winds and In such systems manure from livestock may be erosive water flows. transferred to the soil to improve its fertility, • Maximize diversity to increase resilience. and crop residues may provide additional feed • Enhance biological interactions and for animals (FAO, 2011). synergies. Restoring degraded land can be capital- The specifics of implementing these principles intensive, and this can constitute a barrier in vary in different contexts. Plant diversity has regions where the ownership of land is not been shown to improve soil health, nutrient clear, and where farmers occupying the land cycling and biodiversity – for example the do not have the capital to make the required planting of legumes among other crops can investments. However, many of the principles enhance nitrogen fixation. Planting trees described above do not necessarily require alongside crops can improve soil fertility major capital investment. Nonetheless, they through nitrogen fixation, by creating more do require knowledge, in order to implement soil organic matter, and due to the fertilizing the right combination of measures given each effect of dung from animals that graze in the specific context, to maximize synergies. Thus, shade of the tree. In Zambia, 160,000 farmers another important barrier is lack of information have planted nitrogen-fixing trees among and education. As UNEP (2014a) notes, “there their crops. It sheds its leaves during early is a large need to expand the outreach and rainy season and remains dormant during the extension education efforts to ensure that crop-growing period. This means it does not research results on improved management compete for light, nutrients or water during the practices are transferred and adopted rapidly crop growing season. According to Zambia’s by farmers”.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers 14 countries, aslocal meeting placeswhere effective landuseplanning(UNEP, 2014a). example, projects inTanzania andMalawi of knowledge sharing(UNEP, 2014a). of income averaging US$801perhectare for 2011). “Plant clinics”have beenset upin associated withless-intensive farming methods. matching landusewithpotential through practices focus onimproving knowledge There are numerous environmental benefits This bothlimitstheneedfor restoration The most cost-effective strategy forsustainably sharing andcommunication between farmers. showed theimportance ofnetworking between Central America, theCampesinoa increasing production isoften simply better (farmer to farmer) network isanotherexample investments where they are likely to yieldthe intensification andclimate change adaptation interventions oflow capital intensity. For In acomparison ofconventional andorganic Numerous efforts to improve farming Boa andBentley (2009)estimate increases In many cases progress can bemadewith farming systems, Hülsbergen andKüstermann farmers receiving advicefrom plant clinics.In farmers can seekadvicefrom local experts. farmers for disseminating knowledge (Majule, highest financial returns (Herrick et al.,2016). by minimizingdegradation, and focuses et al.(2013)comparing 20UKfarms onfive of environmental criteria at thesametimeas on theothers. Thestudy shows, first ofall,that call for “added knowledge whichwillaffect how conventional systems. cropping andcrop rotation can substantially on soiltypeandotherconditions (Seufert et challenge oforganic farming inthiscontext is achieving highfood productivity is possible. a useful guideto improving performance; italso al., 2012).However, Ponisio et al.(2014)find and tight margins experienced by farmers mean measuring performance ispossibleandmay be physical inputsare combined andmanaged”, or reduce theyieldgap between organic and shows that good performance across a range well onat least three criteria andmoderately that diversification techniquessuchasmulti- that yieldscan besignificantly lower, depending that high-inputsystems are incentivized. A times higherinthe conventional case. However, indicators, andthree others were performing (a mixed farm) was performing well onall indicators: food production intensity, carbon in shorthand“more knowledge perhectare”. in developed countries themarket pressures (2007) found theGHGemissionsto bethree Buckwell et al.(2014)report onastudy by Elliot In theEUcontext, Buckwell et al.(2014)also footprint, nitrate lossesto water, ammonia losses to airand biodiversity. One ofthefarms Summary for Policy-Makers

Buckwell et al. (2014) describe this outcome as factors. However, a potential “win-win” is that “sustainable intensification”. less resource-intensive diets would in many cases have significant health benefits to the Nutrient loss from soils can be mitigated by individuals concerned. In particular, meat efforts to recapture nutrients from food chain consumption in most industrialized nations is waste, as well as other waste streams, and much higher than is deemed to be healthy. In reapply them to soils. Senthilkumar et al. (2014) the EU currently, protein intake is 70 per cent

report that, in the case of France, the recycling higher, and saturated fats 42 per cent higher, Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers efficiency of phosphorus is 51 per cent across than the World Health Organization (WHO) all waste streams. BMUB (2012) reports that recommendation (WHO, 2007); red meat the German government is examining potential consumption is more than twice the maximum measures to increase rates of phosphorus recommended by the World Cancer Research recovery from waste streams such as sewage Fund (WCRF and AICR, 2007; Westhoek et al., sludge, waste water, slurry and fermentation 2015). residues. Significant dissipation of phosphorus also occurs in industrial processes. In Japan The provision of nutritional guidelines is a clear the quantity of phosphorus contained in way to address this issue. For example, the dephosphorization slag from steel making is official Nordic nutritional recommendations comparable to its total imports of phosphate give strong guidance towards less meat- ore. Technologies are being proposed to recover intensive diets, citing environmental arguments phosphorus from this source, which could as well as health reasons (Fogelholm, 2013). create a significant new phosphorus stream There are examples of voluntary information- (UNEP, 2013c). raising schemes that aim to improve consumers’ understanding of healthy diets. One example is Health, climate and land pressure issues the “Livewell for Life” project (WWF and Friends can all be ameliorated by reducing the over- of Europe, 2015). This makes suggestions for consumption of meat, and excess calories different healthy diet combinations, tailored more generally. Barriers to progress in this to the cooking cultures of three different area are the preference and increasing ability countries – France, Spain and Sweden. As well of people to pay for meat-intensive diets; the as being nutritionally beneficial, it is calculated low prices of meat available through mass that the proposed country-specific “LiveWell production; and general habits and cultural plates” if widely adopted would cut GHGs

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Source: Gustavsson et al.(2011) Figure 13:Pe efficiency opportunity. Figure 13shows the continuously stocked withproducts that meet of scale andthe“supermarketization” process, countries. Supplychainwaste isalsosignificant quantities of foodlossesand waste per capita, a system geared towards ensuringshelves are are highlevels ofconsumer waste (consumers at consumption andpre-consumption stages, potential for co-benefits ofimproved health nonetheless there seemsto bevery substantial There iscurrently very littleinformation about what, ifany, impactsuchschemeshave had– where highlevels ofwaste are aby-product of throwing away unwanted food) inindustrialized in industrialized countries, dueto economies in different world regions. Itshows that there Reduction of food waste isalsoamajor resource from food supplychainsby 25percent by 2020. from more resource-efficient diets. basic food qualitystandards. high uniform cosmetic standards, as well as r capita food lossesandwaste, at consumption andpre-consumption stages, indifferent regions. 350 150 300 100 250 200 50 0 Europe America and Oceania North Per capita food losses and waste (kg/year) Industrialized Asia Sub-Saharan Africa countries. Feedback (2015)reports on causing cancellation oforders after crops have cosmetic specifications, market volatility during thesameperiod,food packaging was and drinkby 3.7percent, andsupplychain retailers to reduce packaging andincrease the reduced by 10percent, wasted householdfood need to discard ediblefood dueto exacting shelf-life andfridge-life offoods. Itreports that suppliers designedto reduce waste. During The Courtauld Commitment, convened by WRAP standards. Supermarket retailers ofFrench wastage by 7.4percent (WRAP, 2016b). the effectiveness ofsimply relaxing cosmetic Supply chainwaste alsooccurs indeveloping its second phase(2010-2012)itworked with in theUK,isanagreement amongretailers and factors drivingfood wastage intheKenyan for export products. Oneexample isgiven of horticultural export sector, whichincludethe been grown, andthelackofdomestic markets North Africa, Central Asia West and South and Southeast Asia Production to retailing Consumer LatinAmerica Summary for Policy-Makers

beans typically require the beans to be of a combined measures provided savings of specific length to fit uniformly into packaging. US $200,000 for an investment of less than This means that farmers must grow long bean US $5,000 (UNIDO, 2013). varieties and then “top and tail” them to the required length. Feedback (2015) report that this results in an average wastage of 30-40 per 3.3.3 Water cent of the usable mass of beans. However, one

major customer was persuaded to change its There are examples of relative and absolute Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers buying policy and opt for just topped beans, decoupling of water use from GDP, particularly enabling Kenyan exporters to reduce waste in countries and cities in which water shortage by a third. Further gains would be available if and scarcity are issues of concern. Between “topping” of French beans were also eliminated; 2001 and 2009 Australia’s GDP grew by 30 per and more still, if cosmetic standards on other cent, while its water consumption reduced products were also relaxed. by around 40 per cent. This was achieved at negligible cost, through cost-effective measures Supply chain waste in developing countries can in water efficiency and demand reduction also be caused by poor storage and processing (UNEP, 2014b). conditions. In such cases, significant resource efficiency gains may be available with relatively Around 70 per cent of water extraction is for simple measures. The Rathkerewwa Dessicated agriculture, hence more efficient irrigation Coconut mill in Sri Lanka was assisted under techniques offer major potential for water UNIDO’s RECP programme to identify material saving. Frequently such techniques also offer efficiency measures. These included laying the co-benefit of increasing agricultural yields. rubber carpets on the floor of the loading bays Compared to traditional flood irrigation, to reduce the likelihood of damage to coconuts irrigation techniques such as sprinklers or drip during loading and unloading, which would irrigation can reduce water consumption and cause them to be thrown away; awareness increase yields, by applying the irrigation more raising among employees to avoid waste at directly to where it is needed. Drip irrigation the paring stage; reduction of wash water; and involves providing water through a system of re-using coconut shells to fire the boiler. These perforated pipes that are laid on or beneath measures enabled significant reductions of the ground. Water drips slowly through the biomass wastage, and also saved energy. The perforations directly to the roots of the crop

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Summary for Policy-Makers

(Rejwan, 2011). Dobbs et al. (2011) estimate differentiated tariffs are available, allowing that sprinklers can reduce water use by 15 per low users to benefit from a lower charge, with cent while increasing yields by 5 per cent to 20 extensive metering providing consumers with per cent, and drip irrigation can reduce water use the information to monitor their consumption. by 20 per cent to 60 per cent, while increasing Farmers benefit from a lower tariff for using yields by 15 per cent to 30 per cent. However, non-potable water for irrigation. Incentives and this is dependent on soils, crop, climate and penalties are also directed at the water supply

how the irrigation system is implemented (van utilities, who are charged for avoidable losses. Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers der Kooij et al., 2013). Sustaining drip irrigation They are allowed to keep low water pressures systems is limited in many areas by salinization as this reduces leak-loss rates. The government associated with soil and water quality issues also supports the research and development (Hanson and May, 2011). of new technological innovations in the area of irrigation (Rejwan, 2011). In Israel, major constraints on water supply have encouraged a range of water-saving Significant barriers to the application of innovations. About 84 per cent of the country’s advanced irrigation techniques include lack of domestic wastewater is reclaimed for irrigation information and lack of capital to invest in such purposes. This helps to ensure that about 52 technologies, especially for smallholders and per cent of agricultural water demand comes farmers on marginal land. However, there are from non-potable sources – the domestic other less capital-intensive ways of achieving wastewater supplemented with brackish a similar aim. Tensiometers are devices that (salty) water. Israel has extensively adopted can precisely measure the moisture content of drip irrigation in its agriculture sector, in the soil, thus allowing more precise irrigation. combination with computerized control systems These have been employed by rice farmers in that provide the exact required amount of Punjab, India, who have reported 33 per cent water directly to the plant roots. The uptake water savings (UNEP, 2014a). “Smart irrigation of water efficiency measures across sectors is scheduling” aims to provide the specific stimulated by a range of incentives as well as amount of required water at the specific time it penalties targeted at different users. A water is required, to avoid over-irrigating (McCready quota system for farmers places a strict limit on et al., 2009). Modern ICTs have also been consumption of potable water, but also rewards used in Uganda to enable farmers to access under-consumption. For domestic users, information on weather forecasts, improving

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers conservation inurbanareas (Sharmaand groundwater. Thissimpletechnique can during therainy season.Thisimproves soil advanced technologies are notavailable, can new buildingdevelopments and renovations moisture, reduces soilerosion andreplenishes pipeline distribution system, are considered rain-fed areas are structures suchasfurrows, upslope areas (ActionAid,2011).Other effective showers andwater-saving sinks (Sharmaand soil moisture management techniques for fields can reduce theflow of water runoff that reduce theirwater flow have been Vairavamoorthy, 2009).Fittings onappliances Vairavamoorthy, 2009).Specific technologies the most efficient approaches to water vegetative strips orbench terraces (FAO, 2011). timing ofirrigation and water management to 15timeswhere runoff canbe captured from times, andthebiomassyield by asmuch10 implemented inAustralia incitiessuchas include low-consumption toilets, low-flow in West Africa stone barriers builtalongside improve water efficiency. ActionAid report that (UNCTAD, 2011). improve water retention by theland by 5 to 10 Melbourne (UNEP, 2013a);inNew SouthWales, Even relatively simpleinterventions, where Reducing water consumption in toilets and bathrooms, andreducing leakages inthe 120 billioncubicmetres ofwater could besaved et al.(2015)estimate that in 2012global estimates ranging from 5percent to 80per either lost inleaks ornotbilledto thecustomer cent ofsupply. Thevariation dependsonthe 2016b). Dobbs et al.(2011)estimate that there due to lackof revenue collection, water utilities priority inmany areas. Water lossesdueto reduction inpotable water use(Burgin and must submitacertificate showing 40percent may have littleincentive or available capital per cent insomecountries (UNEP, 2014b).Also revenue water proportions can beashigh70 management andoperational practices (UNEP, per cent ofwater produced inIndiancitiesis supply to commercial, residential andpublic to make timelyinvestments ininfrastructure (Dobbs et al.,2011). is significant potential to reduce water leakage (Agrawal, 2008),andUNEPestimates that non- Water issubsidized inmany countries. Kochhar Webb, 2011). Reducing leaks from water supplyisalsoa from municipalsources, calculating that 100- for water. TheWorld Bankestimates that 40 leaks andunaccounted flows range widely, with level ofinfrastructure development, aswell as has beenlinked to lackofrevenue collection buildings. Persistence ofhighwater losses by 2030asaresult ofreducing leakages inthe Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

water subsidies totalled $456 billion. This effective, provide funds for re-investment and means that there is little incentive to conserve maintain incentives for conservation. water, and if the utility is unable to capture sufficient revenue to enable re-investment in In the Paraiba do Sul river watershed in south- the infrastructure, this can in the long run make east Brazil, gradual increases in the price of water the efficiency of the system even worse, and began in 2003. The higher prices increased undermine its financial sustainability. Kochhar the income earned by the water utility, which et al. (2015) note that whereas “getting then invested the additional money into water incentives right, notably by reforming water management. The higher prices also prompted pricing, can help rationalize water use, promote more water conservation – extraction was needed investment, and protect the poor”, reduced by 16 per cent and consumption by 29 subsidies may in contrast be inequitable, as per cent between 2006 and 2008. Companies they disproportionally benefit upper-income were motivated to invest in water-saving and groups, who have better access to, and use reuse technologies (UNEP, 2014a). more water. If the purpose of the subsidy is to protect the access of the poor to water, this can An important principle for further improving be achieved in other ways that are more cost- the efficiency of water use is that of cascading

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers or cascading systems, asdiscussedabove, of water, anditsreuse through recycling as highthat required for drinkingwater. albeit anunsafe one–domestic wastewater a kindofcascading water usehasemerged, purposes, andisnow common inAustralia not allusesofwater willrequire awater quality uses ofwater. Thisprinciplesuggests that urbanization, efficient useandapplication safe for irrigative uses(Reymond et al.,2009). set upalow-cost natural treatment system to scale urbanfarmers. Aproject intervened to supplying industrial processes andflushing water insomeform (Maheshwari, 2006).In watering plants orflushing toilets. More than without treatment for otheruses,suchas were source theprimary ofirrigation for small- was flowing untreated through streams that that hasbeenusedfor washing –can bereused treat thewastewater sufficiently tomake it toilets (Weizsäcker et al.,2009).InAccra, Ghana, California inthemid-1990s,grey water was used Given thetrends ofpopulation increase and (Burgin andWebb, 2011).Grey water –water in nutrients (FAO, 2011). irrigation, asithastheadvantage ofbeingrich Harvested rainwater can beusedfor various If contaminants can beremoved to avoid for irrigating landscapes, golf courses andcrops, half ofallhouseholdsinAustralia reuse grey health risks, wastewater can behighlysuited to

efficiency has tobeseeninthe context ofthe competitive market inwhichtypically onlyprice consumers, allofwhomare locked into ahighly over-fished. Theproblem isa result ofa complex commercial fisheriesare eitherfullyfishedor of water-use efficiency. complete hydrological cycle. Inthosepartsof can enableconsumers to make sustainability- consumers to drive theindustry inamore depleted at unsustainable rates. Asdiscussed and standards, such astheMarineStewardship are unsustainable (FAO, 2011;WWAP, 2015), are crucialstrategies. However water-use matters. Onepossible response to thisisshown responsibly caught from asustainable source signify tosignify consumers that theproduct was sub-basin level recharge strategies, including sustainable direction. watershed management, have to bemadepart fishermen to retailers, food companies and Council (MSC)label.Thislabelisintended to the world where withdrawals ofgroundwater in theemergence ofqualityassurance labels in Section2,themajorityof world’s (MSC, 2016).Information labels suchasthis industries thisopensup the possibilityfor Rivers andoceansare alsosources of food system comprising multipleactors from biomass, andinmany cases theseare being led purchasing decisions.Inhighlycompetitive Summary for Policy-Makers

3.3.4 Energy Finnish municipalities have made substantial energy efficiency improvements in buildings Energy use is the largest source of demand to reduce CO2 emissions, aided by mandatory for fossil fuels. Therefore the energy sector has energy efficiency performance codes and a central role in addressing climate change, as subsidies for measures to improve energy well as other environmental impacts associated efficiency (UNEP, 2013a). Building efficiencies in with fossil fuel use. Scenarios produced by Melbourne, Australia, have been raised through

bodies such as the IPCC and IEA show the mandatory energy efficiency performance Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers importance of technological change in energy codes, implementation of energy efficiency systems to replace fossil fuel energy sources measures in public buildings and lighting, a with low-carbon alternatives. However, such house-auditing programme, and a green office scenarios also emphasize the importance alliance that works with commercial tenants of demand reduction (IEA, 2010, 2012a; (UNEP, 2013a). IPCC, 2014). Increasing resource efficiency in the energy sector is a critical strategy to The Four Centres building at Red Deer College, enable such necessary demand reductions Alberta, Canada shows the importance of design to be achieved without negatively affecting and simulation modelling in optimizing the human development and well-being. Such energy performance of buildings. The buildings considerations provided the evidence base for are designed to optimize natural lighting, with the IRP’s 10 Key Messages on Climate Change sensors automatically dimming electric lights to the COP21 climate summit in Paris (UNEP, when they are not required. Efficient ventilation 2015a), which, as noted in Part One, stressed design is combined with heat exchange to the role of resource efficiency in the cost- recapture heat from exhaust air, and the effective achievement of the climate targets building fabric has high thermal resistance. in the Paris Agreement. This conclusion also The design process was guided by the Green emerged from the modelling carried out for this Building Council’s LEED certification process, study, as reported at the beginning of Section 3. and by computer modelling and simulation, that helped to test the energy and cost savings of As shown in Figure 10, buildings account for alternative strategies. The result was a building around 18 per cent of global GHG emissions that exceeds the minimum mandated efficiency (IPCC, 2014). Investments in improving the standards by 61 per cent (National Resources energy efficiency of buildings are common. Canada, 2015).

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers mechanism (CDM project qualifiesunderthecleandevelopment for theresidents. Dueto itsCO bills andimproving thecomfort ofhomes in low-income housingbuildings,reducing ceilings andsolarwater heaters installed has seenenergy-efficient lightbulbs, insulated the Kuyasa project inCapeTown, SouthAfrica, and urbanpopulation growth. Asan example, but inthiscase in a context of rapidurbanization employmenthousing, andpublicinfrastructure, sector are alsocrucialto address needsfor improvements inthebuildingandconstruction country cities.In countries oftheGlobalSouth, reach low-income householdsindeveloped consumption andlower carbon emissions, can led sustainable withlower energy housing, ways inwhichprogrammes for local authority- Report –UNEP, forthcoming in2016a)show in greater detail intheScientific Assessment Fund inLjubljana,Slovenia (bothdiscussed Programme inBoston andthePublicHousing income citizens. The Residential Energy health andwell-being ofvulnerable, low- efficiencies isinmany cases toimprove the important objective for improving building In addition to reducing emissions,an 18 mechanisms/clean_development_mechanism/items/2718.php certified emission reduction(CER) credits,which couldbe counted towards meeting Kyoto targets. See: http://unfccc.int/kyoto_protocol/ emission reduction commitments to transfer investment to emission reduction projects in developing countries. The projects create A mechanismestablished withintheKyoto Protocol oftheUNFramework Convention onClimate Change, to facilitate countries with 18 ). Theproject hasalso 2 savings, the

technologies that can reduce electricity undertaking investments incomputer-controlled target year (Kimura, 2012).Somecitiesare ranged from 16percent to 80percent inthe improvements indifferent product groups have Top Runnerstandard, often in excess. Efficiency targeted product group hasmet therequired performance andencouraging innovation –each been successful indrivingupenergy efficiency 12 years ofthisprogramme confirmed ithad standard inafuture year. Areview ofthefirst as aguidefor setting the required average highest-performing energy-efficient appliances schemeusestheperformance ofthe Runner” standards are alsopossible.InJapanthe“Top 2020 (Molenbroek et al.,2014).Mandatory of 19percent below businessasusualby been projected to deliver anenergy saving Energy LabellingandEcodesign Directives has energy-efficiency labelling.The effect ofthe This hasbeenaddressed withinthe EUwith available to customers, andtheircost-sensitivity. consumer energy useisthelackofinformation A barrierto increasing theefficiency of and skillsdevelopment (UNEP, 2013a). provided opportunities for local employment Summary for Policy-Makers

wastage. In Songdo, Republic of Korea, buildings permeate the neighbourhood. Thus, transport is have been fitted with computer-controlled primarily on foot or bicycle. lighting and temperature controls to minimize energy wastage, and San Jose, California has Research conducted and summarized by invested in LED street lighting connected via a the United States National Research Council smart network (UNEP, 2013a). (NRC, 2009) finds that five “Ds” are important in shaping energy use and transportation:

Transport accounts for around 14 per cent of population density; diversity of uses (such as Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers global GHG emissions (IPCC, 2014). There is mixed residential/commercial); distance to public considerable potential to reduce transport transit; design to support multiple modes of demand through design and planning of travel, including pedestrian, bicycle, automobile transportation infrastructures. For example, and public transit; and access to destinations, Vauban, Germany, is an eco-city development with focus on job locations. near the city of Freiburg. It was brought about when the city bought a former army barracks in The city of Ahmedabad in India has used planning order to develop needed housing. This provided successfully to reduce vehicle miles travelled an opportunity to embed sustainability into the (VMT) through both mixed use development design of the project itself. The area is designed (diversity), design (for multi-modal transport), to enable sustainable transport, with a tram access to destinations, having a short distance line connecting to the centre of Freiburg, and all to public transit, and more compact, higher homes within easy walking distance of a tram density development. This illustrates all five Ds in stop. The layout of the district has also been a developing world setting. An important factor designed to actively encourage walking and was the decision of the municipality to undertake cycling and discourage car use. This is achieved its transportation planning alongside its broader by reducing the number of streets through development plan, and to give the resulting which cars can pass continuously through the Integrated Mobility Plan a time horizon of 20 neighbourhood. Most local streets are crescents years. This integrated plan therefore considered and cul-de-sacs, which create dead-ends for mobility in the context of high density, mixed-use cars – however these car dead-ends connect to urban infrastructure. It chose to use all forms of a network of pedestrian and bicycle paths that transportation as complementary to each other,

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers urban distances. Apioneering example ofthis spontaneous accessto bicycles to cover short such schemesisto provide cheap,quick and Though taking different forms, theessence of in anumberofcities various countries. sharing scheme,whichhas now beendeveloped example ofthisistheconcept ofthebicycle- transport innovations are still possible.An the 5Dsextensively. Nonetheless, low-energy infrastructure, itcan bedifficult toimplement In large citieswith extensive existing urban and Bhakuni, 2014). alongside thebusrapid transit corridors (Swamy pedestrian andbicycle laneswere alsoincluded mass transit systems at hubpoints. Dedicated with local publictransit systems connecting to two important sectors: steel-making and mining. of increased efficiency potential are given for 20 percent from today’s level. Here, examples could reduce industry energy consumption by implementation of best-available technologies industries. According to IEA (2012a), the by country, by industry, andby process within major energy-using industries, butthey differ for increased resource efficiency inmany There are considerable untapped opportunities subscription (UNIDO, 2013). day oraweek ofaccess,orsignupfor alonger 24 hours aday. Users can pay ondemandfor a total of20,000bicycles across thecity, available network of1,200automated hire points anda is theVelib initiative in Paris.It comprisesa Summary for Policy-Makers Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers

The steel industry accounts for around 6 per to be reused at various stages in the process. cent of global final energy consumption. The Other measures within different phases of the energy efficiency of steel production has process include sinter plant heat recovery, the consistently improved, but at a declining rate. use of waste fuel, and coal moisture control – Between 1960 and 1980 annual efficiency these can reduce direct energy use by 50 per improvements were in the range of 2 to 4 per cent. In BOF steelmaking, rolling (for example, cent, but between 1980 and 2005 the annual “hot charging, recuperative burners, and rate of efficiency improvements fell to 0.5 to 1 controlled oxygen levels”) can reduce direct per cent. McKinsey’s base case assumption is energy use by 88 per cent and electricity by 5 that efficiency will improve at the rate of 0.7 per per cent. Pulverized coal injection, top pressure cent per year between 2010 and 2030, mainly recovery turbines and blast furnace control driven by a shift from blast furnaces and basic systems can reduce direct energy by 10 per oxygen furnaces (BOF) to electric arc furnaces cent and electricity by 35 per cent. In EAF (EAF) (Dobbs et al., 2011). steelmaking, improved process control, oxy fuel burners and scrap preheating can reduce Opportunities for increased efficiency include electricity consumption by 76 per cent (Dobbs cogeneration, and the recapture of waste heat, et al., 2011).

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers about thefuture ofspecificoperations. material prices,whichcreates uncertainty be deterred by volatility inboth energy and also require capital investment, which can appropriate engineering resources. They information failures andlackofaccess to in heavy industry include,insomeregions, technologies andbest practice techniques Barriers to implementing suchnew current energy consumption levels. a total reduction of over 50percent from saving of409trillionBtu peryear, providing improved technologies would deliver afurther cent. Targeted investment inR&Dto develop Btu peryear, areduction ofaround 20per demand from theindustry by 258trillion adoption ofbest practices would reduceenergy industry. Asshown inFigure 14,thewidespread by BCS(2007)inrelation to theUSmining for energy saving inheavy industry isgiven Another optimistic account ofthepotential

mining industry. by equipment typeintheUS Figure 14:Energy consumption andsaving potential Source: BCS(2007),p.23,Exhibit18

Summary for Policy-Makers

3.4 Systems thinking and It is also important to consider resources from nexus issues a supply chain perspective, using life-cycle analysis. This, for example, affects the perceived resource efficiency of service-based economies, The best practices explored above have much of whose resource footprint is felt in been categorized according to the four critical other countries. It can also affect the perceived resources – materials, land and soils, water benefits of resource substitutions. For example, and energy. However, it is also important to

bioenergy products can substitute for fossil fuels Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers consider resource and resource efficiency in energy demand – however the full life-cycle challenges in terms of overlapping and impacts of both options need to be compared, in interdependent systems. terms of land use, processing and transportation emissions, before it can be clearly established Energy systems are highly interconnected, which has the lowest impact. with demand changes or fuel substitution in one sector having impacts on another. All of these issues present considerable Food systems are complex webs of interacting complexities for policy-makers. For purely actors in which powerful multi-national practical reasons, different ministries typically companies have significant influence. take responsibility for each of the resources Cities are themselves systems of major and systems described in this report. This is importance through which all of the major understandable and largely beneficial as it resources flow. allows policy-makers to achieve tractable and demonstrable progress on particular issues. The overlaps and synergies between However, it is also highly desirable that resources, or “nexus” interactions, create policy-makers should attempt to balance a important effects and are potentially valuable resource- or sector-focused approach with sources of win-win opportunities. For a more cross-sectoral, cross-resource and example, water-stressed areas may resort to full supply chain perspective. This is both to energy-intensive water production measures such avoid undesired consequences of individual as desalination – therefore water-saving measures policy actions going unnoticed, and to would save both water and energy. Increased maintain awareness of the potential for win- efficiency in food production and consumption win opportunities if sectors or resources are can save land, water and energy. considered in a more holistic way.

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers 4. Conclusions of resource efficiency 4.1 The imperative and opportunity efficiency arises from the pressures that consumption, are puttingon natural resources global community to achieve theSDGsand and theenvironment. These pressures amount population andeconomic growth, combined The imperative for increased resource with current patterns ofproduction and the Paris Agreement climate targets, thereby to threats which,ifnotaddressed, could make it impossible,ormuchmore expensive, for the better future for all. hindering sustainable development anda entail anincrease inthetechnical efficiency of material andenergy input. driven increases intheresource efficiency with and anincrease inresource productivity, orthe and energy inputsinto useful outputs,a averted asfar aspossible,inter aliaby a resource efficiency arise from itspotential reduction inassociated environmental impacts, The opportunitiesoffered byincreased systematic effort by policy-makers toachieve These threats needto beaddressed and with whicheconomic processes turnmaterial which theireconomies operate. Thiswould value that economic processes addto eachunit both incremental aswell aslarger innovation- Summary for Policy-Makers

to result in higher economic growth and The financial and employment benefits employment. The benefits from increased from increased resource efficiency are much resource efficiency would be even greater if the enhanced by the non-financial benefits that avoided costs of resource bottlenecks, pollution are often invaluable for human well-being. and climate change were taken into account. These benefits derive, inter alia, from resource security, reduced pollution, improved health, However, markets will not achieve these enhanced environmental quality and lower loss

higher levels of resource efficiency unaided. of biodiversity. Moreover, resource efficiency Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers The studies that show higher growth and provides opportunities for improving the social employment from greater resource efficiency allocation of resources. Reducing the stress suggest that this is driven by a number of on the quantity and quality of resources will mechanisms. These include higher rates of enable the disadvantaged and the poor to innovation and technical change than markets access more easily the resources that they need. alone can achieve. They involve policy-led higher The resource efficiency agenda is therefore investments in resource-efficient infrastructure also one that offers the potential to reduce and products, intelligent and targeted regulation, inequalities and poverty in all countries through as well as environmental tax and other fiscal more secure and equitable access to resources. policy reform that adjusts the balance between Pursued through well-informed and appropriate the costs of labour and materials, thereby public policy, increased resource efficiency increasing the economic return to resource- can therefore deliver multiple benefits across efficient products and processes. Environmental all the dimensions – economic, social and tax reform is especially important as a means of environmental – of sustainable development. avoiding the rebound effect, whereby increased economic activity arising from increased 4.2 Best practices for increasing resource efficiency reduces the benefits from resource efficiency lower resource use and pollution that would otherwise have been achieved. For detailed There are no magic bullets to increase resource analysis and guidance on policy options to efficiency. The necessary measures – technical, support improvements in resource efficiency, economic and other policy-related – vary from readers should refer to the complementary sector to sector and from resource to resource. OECD report on this precise topic as requested The evidence in this Summary for Policy- by the G7 as well. Makers, and in the Assessment Report upon

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers expanding rapidly butlacktheresources to efficiency are notpossible.This may alsobean emerge through theoperation ofmarket forces efficient practices. concerted action for rates of resource efficiency collaboration withpolicy-makers, must take of resource efficiency solutions, showing availability, some investments inresource addressed inanumberofways: by providing alone. Were thisnotthecase, muchgreater are highlighted here. make strategic resource-efficient interventions, resources, economic sectors andprocesses – resources can beachieved. Themeasures differ resource efficiency. Suchincreases willnot with volatile prices requiring shortpayback which itisbased,hasprovided many examples times, or for other actors withlimited capital to increase. For this to happen,there must There are significant barriers to increases in There istheissueofshort-term versus issue withdeveloping economies, whichare in detail –dealingasthey dowithdifferent for example inurbanareas. Thisissuecan be be strong new incentives for more resource- be thenorm.Different economic actors, in levels ofresource efficiency wouldalready but somecommon messages emerge, which how greater efficiency inthemanagement of long-term returns. For firmsinindustries “patient” capital“patient” ordevelopment fundingthat encourage actors to pay for labourto save on economic incentive to usethem efficiently; by overcome thisbarrier:by pricingexternalities; costs can make itcheaperto waste materials off between low material costs andhighlabour on labour. cities to make long-term resource-efficient outlook onfuture policytrajectories across and maintaining orrestoring landquality, and materials, rather thanpay for materials to save not ongenerating quick returns from high uncertainty; orby creating otherincentives to using dynamictaxes to buffer pricefluctuations, support to enabledeveloping countries and sectors, to helpbusinessesmake orjustify long- are notalways linked. For example, thetrade- wastage. There are numerous possibleways to than invest inthelabourrequired to avoid such thereby reducing volatility andfuture term investments; andby providing financial Ongoing processes ofurbanization must increase pricesofmaterials andthereby the infrastructure planningdecisions. in price-volatile sectors, orproviding aclear inputs; by offering support for businesses focuses onimproving long-term productivity by introducing resource extraction taxes to Resource efficiency and economic efficiency become more resource-efficient. Resource Summary for Policy-Makers

efficiency needs to be a guiding principle for flows. This could include revisiting definitions the towns and cities springing up and being and provisions for waste management, and extended in many countries around the world. removing counter-productive subsidies. This applies to buildings, transport systems The issue of possible “losers” from resource and infrastructure to enable the coordinated efficiency needs to be addressed. In some management of materials, water and energy, industries reduced material extraction will making full use of modern information and translate into reduced revenues and job losses. communication technologies. Public as well as In this context it is important that transitional Resource Efficiency: Potential and Economic Implications for • Summary Policy-Makers private investment in such infrastructure may issues are properly addressed and appropriate be required. compensation for “losers” considered. However, it should be noted that resource efficiency has A range of issues must be addressed around the potential to create jobs in other areas, so logistics and supply chains. The reuse and that rather than resist resource efficiency or recycling of resources require used materials support resource-inefficient activities, which to flow in the opposite direction to product may anyway be in decline, it may be preferable supply chains. This requires various actors to set up programmes to transfer redundant to adopt a coordinated approach to the workers to, and re-train them for, resource- planning of resource management, and to the efficient sectors and activities. logistics of material and product supply and return. Synergies and benefits can occur from considering these areas in an integrated way, for example through industrial symbiosis.

Regulations that discourage resource efficiency should be changed. For example, rules set up to manage a linear material management chain may prevent materials classified as waste from re-entering the supply chain. This suggests that regulations that govern materials, water and energy flows, while continuing to safeguard human health and the environment, should be revised to enable more circular resource

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers establishing acommon view ofthefuture efficient initiatives, and fromthe interactions energy efficient. There may alsobe complexities consumption-production basis,withtheinsights other environmental impactsofresource- A monitoring process to assesstheresource as materials, water, landandcarbon, could and businessesto prioritize resource efficiency. approach needsto assess resource useand against suchsituations, awhole-system and unintended consequences, interms of necessary. use andresource efficiency of countries, with used to inform andamendpolicywhere set oftargets covering key resources such specific resource efficiency target, orasmall To someextent thissituation willbeimproved progress towards themmonitored. This resource efficiency shouldbeadopted and resource efficiency. Inparticular, there may would give agreater incentive to policy-makers the impactsofproducts onalife-cycle and There may belimitsto someaspectsof if itisrealized that resource efficiency isin However, itshouldalsoberecognized that a fact essential to the attainment oftheSDGs. between government, industry and society. be effective indrivingperformance, and between different resources. To guard be points after which recycling isnolonger National andinternational targets for

emerging anddeveloping nations a to adopt emissions reduction inthe Paris Agreement, of the SDGs. common aspirations that led to theagreement gives practical expression to the spiritand a higherprofile andlead to greater ambition to regular intervals, could give resource efficiency development, to the benefit of all humankind. support, learning and capacity building that sustainable development now andinthe and cooperation at all levels, involving mutual a process of continuous exchange, partnership action in these and other industrialized, and apressing needfor furtherconcerted an increase inglobalresource efficiency more resource-efficient andsustainable of path placed to take aleadingrole indemonstrating ranks amongthetop priorities for enabling wealthiest andmost dynamiceconomies. At what ispossibleinsomeoftheworld’s the sametime,there isbothsignificant room the SDGsandaspirations for GHG The new G7Alliancefor Resource Efficiency The globalcommunity can supportthisthrough Given itslinks to theattainment of increase it,inthesameway ascurrently occurs for GDPgrowth. harmonized metrics andresults publishedat future. is a welcome initiative, with G7 nations well

Summary for Policy-Makers

References

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers Efficient Economy). (Policy Options for a Resource- D3.7a for theFP7project POLFREE GINFORS/LPJml results. Deliverable integrated scenariointerpretation: Beringer, T. (2015).Report about Meyer, B.,Distelkamp, M.,and Washington, DC.:IslandPress. and HumanWell-being: Synthesis. Assessment (2005).Ecosystems MEA (2005).MillenniumEcosystem Management, 96 Augustinegrass. irrigation controllers onSt. conservation potential ofsmart and Miller, G.L.(2009).Water McCready, M.S.,Dukes, M.D., Food Security. on Innovations inAgriculture and Symposium, Panel 16:SpecialPanel presented at theClimate Change A case ofTanzania andMalawi. climate change in agriculturalsector: and political domains to adapt to capacities to individuals,institutions opportunities for enhancing (2011). Majule, A. Irrigation Futures, DarlingHeights. Cooperative Research Centre for Area. Queensland,Australia.: systems intheSydney Metropolitan and auditofresidential irrigation Maheshwari, B.(2006).Theefficiency AgriculturalWater (11),1623-1632. Exploring Paper

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Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers S., Gee,D. Edens, B.,Schulte, P., von Wirén-Lehr, J.L.,A., Martinez-Lagunes, R., Alfieri, Mathews, Liu,J., R., Ercin, E.,Weber, Wackernagel, M.,Hoekstra, A., S., Berger, M.,Farell, C.,Hyde, K., Sonnemann, G.,Aldaya, M.,Pfister, M., Matlock, M., Jefferies, D., McGlade, J., Werner, B.,Young, to theInternational Resource Panel. Working Group onWater Efficiency in agreen economy, AReport ofthe UNEP (2012b).Measuringwater use Environment Programme. future we want: United Nations Outlook 5:Environment for the UNEP (2012a).GlobalEnvironmental M.; Hagelüken, C. Sibley, S.F.; Sonnemann,G.;Buchert, Allwood, J.; Birat, J.-P.; Reck, B.K.; Resource Panel. Graedel, T.E.; Metal Flows to theInternational of theWorking Group ontheGlobal Metals –AStatus Report, AReport UNEP (2011c).Recycling Rates of Report. Nairobi: UNEP. UNEP (2011b).Green Economy Lankao, P., A. SiribanManalang, N., Giljum,S.,Hennicke, P., Romero W., Krausmann, F., Eisenmenger, E.U., Ren, Y., Moriguchi,Y., Crane, M.,vonM., Swilling, Weizsäcker, Resource Panel. Fischer-Kowalski, Decoupling to theInternational Report oftheWorking Group on impacts from economic growth, A resource useandenvironmental UNEP (2011a).Decoupling natural M., Rodrigues, M. J, Hargroves, K.,Hudson,C.,Smith, Weizsäcker, E.U., deLarderel, International Resource Panel. von Working Group onDecoupling to the policy options. A Report ofthe technologies, opportunitiesand UNEP. (2014b).Decoupling 2: and HerrickJ. Howarth Kauppi R., L.,Swilling M., W., O´BrienM.,Garcia F., SimsR., Panel. Bringezu S.,SchützH.,Pengue Soils oftheInternational Resource of theWorking Group on Land and with Sustainable Supply. AReport Land Use:BalancingConsumption UNEP (2014a).AssessingGlobal Hegeluken, C. Heiskanen,A., K.,Meskers, C., Reuter, Hudson,C.,van M.A., Schaik, International Resource Panel. on theGlobalMetal Flows to the A report oftheWorking Group opportunities, limits,infrastructure. UNEP (2013c).Metal recycling: Hischier, R. Eckelman, M.,Mudd,G.,Norgate, T., Panel. van derVoet, E.,Salminen,R., Flows to theInternational Resource the Working Group onGlobalMetal metals flows andcycles. A report of and challenges ofanthropogenic UNEP (2013b).Environmental risks S.andHodsonM. B., Marvin Resource Panel. Swilling M.,Robinson Group onCitiesoftheInternational transitions. A Report ofthe Working governance ofinfrastructure Urban resource flows andthe UNEP (2013a).City-Level Decoupling:

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73 Resource Efficiency: Potential and Economic Implications • Summary for Policy-Makers Summary forSummary Policy-Makers

Despite enormous progress in the past The report conducts a rigorous survey to decades towards improving human prosperity assess and articulate the prospects and and well-being, this has come at the lasting solutions for resource efficiency. It considers cost of degradation of the natural environment how more efficient use of resources can and depletion of natural resources. Meeting contribute to economic growth, employment the needs of a growing and increasingly affluent and development, at the same time as reducing population, will require natural resource the world’s use of materials, energy, biomass and extraction to increase from 85 to 186 billion water, and the resulting environmental impacts. tonnes by 2050. This can cause irreversible environmental damage and endanger the The report documents many examples of capacity of Earth to continue to provide best practices for increasing the resource resources which are essential for human efficiency of different sectors from countries survival and development. around the world. The challenge for policy- makers is to learn from and scale up these Analysis in the report shows that policies good practices, and to conceive and implement and initiatives to improve resource efficiency a set of transformative policies that will and tackle climate change can reduce global enable countries to reap the associated resource extraction by up to 28 per cent globally social, environmental and economic benefits. in 2050, against the baseline. In addition to Ambitious action to use resources in a more slower growth in resource extraction, such efficient and sustainable manner can help policy actions can also cut global greenhouse place the world on the right track to meet gas emissions by around 60 per cent, while also its commitments under the 2030 Agenda on boosting the value of world economic activity Sustainable Development and the Paris Climate by 1 per cent. Change Agreement, and thereby to realise a more equitable and sustainable future.

This report has been produced by the For more information contact: UNEP’s International Resource Panel in response International Resource Panel Secretariat to a request by leaders of the G7 nations in the United Nations Environment Programme Division of Technology, Industry and Economics, context of efforts to promote resource efficiency Email: [email protected] as a core element of sustainable development. Web: www.unep.org/resourcepanel