Resource Effciency: Potential and Economic Implications

Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Acknowledgements coordinaton andsupport,especially Shaoyi Li, The UNEPSecretariat team provided essental Thomas Graedel, Maarten Hajer, SeijiHashimoto, John Ingram, Katja Kruit, BenMilligan, Yuichi Moriguchi, Jacqueline AloisideLarderel, Chika Aoki-Suzuki, Jim West andHenkWesthoek. Abraham Pedroza. Astrid Schomaker, Birgit Schwenk, Yoshinori Suga, Anu Ramaswami, HeinzSchandl,Sangwon Suh, Yonglong Lyu, AnneMiehe,Jonathan Murphy, Kazunobu received by Hezri Adnan,Shardul Agrawala, We are grateful for thevaluable comments Christna Bodouroglou, Vera Gunther and former Co-ChairoftheInternatonal Resource Panel, for Onogawa, Antonio Pedro, M.A. TlouRamaru, Charles Arden Clarke, MarinaFischer-Kowalski, their contributons, dedicaton andcommitment. the Internatonal Resource Panel, andAshokKhosla, ontriutn autors: Special thanks go to Janez Potočnik, Co-Chairof Steve Hatield-Dodds, Petr Havlik, Edgar Hertwich, Erinç Yeldan. Ernst von Weizsaecker, Anders Wijkmanand Lea Kauppi, Pawel Kaźmierczyk, Vijay Kumar, Patrice Christmann, Jefrey Herrick,TimKasten, Mariano Castro Sanchez Moreno, MinpengChen, Peter Borkey, Werner Bosmans,HansBruyninckx, EsterMark Swilling, van derVoet, BrianWalsh, Nabil Nasr, David Newth, MichaelObersteiner, Lead authors: Editor: Internatonal Resource Panel. Paul EkinsandNickHughes. Stefan Bringezu,

do notnecessarilyrepresent thedecisionorstated expression ofany opinionwhatsoever onthepartof consttute endorsement. of itsauthorites,orconcerning delimitaton ofits of thematerial inthispublicaton donotimplythe The fullreport shouldbereferenced asfollows: This publicaton may bereproduced inwholeorpart The designatons employed andthepresentaton Copyright ©United Natons Environment Programme, 2016 All photos ©:AFP nor doescitngoftrade namesorcommercial processes policy oftheUnited Natons Environment Programme, prior permissioninwritngfrom theUnited Natons publicaton that usesthispublicaton asasource. No provided acknowledgement ofthesource ismade. any othercommercial purposewhatsoever without and inany form for educatonal ornon-proft purposes use ofthispublicaton may bemadefor resale orfor UNEP would appreciate receiving acopy ofany without specialpermissionfrom thecopyright holder, fronters orboundaries.Moreover, theviews expressed the legal status ofany country, territory, cityorarea or the United Natons Environment Programme concerning EP Resource Efciency: Potental and Resource Panel. Ekins,P., Hughes,N.,et al. Environment Programme. Printed by: UNESCO Design/layout: UNEPDCPI Economic Implicatons Disclaimer Areport oftheInternatonal

Summary for Policy-Makers

Resource Effciency: Potential and Economic Implications

Produced by the Internatonal Resource Panel.

This document highlights key fndings from the report and should be read in conjuncton with the full report.

The report can be downloaded from www.unep.org/resourcepanel. Additonal copies can be ordered via email: [email protected] Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Two historic events in2015fgure prominently S Preface With thepublicaton of15assessment reports with decoupling economic growth from Sustainable Development highlights that environmental degradaton asoneofthekey and contnuous dialogueswithpolicy-makers, on Climate Change confrms that on resources issues:the2030Agenda on of natural resources andthat artculates the the escalatng useofnatural resources and to poverty eradicaton andto thesustainable technological andeconomic potental of the urgency for thesustainable management towards abeter tomorrow for current and stood outasacredible voice intheinternatonal industry leaders andcivilsociety, thePanel has state, managementuse ofnatural and resources. sustainable resource management iscritcal relevant scientfc assessments onthefuture related publicpolicies. resource efciency andways forward for the decarbonisaton must go handin future we want; andtheParis Agreement community that underlinesimperatves and future generatons. components for achieving thetransformaton Internatonal Resource Panel has ince itsincepton in2007,the independent, authoritatve andpolicy been commited to providing

- developed, newly industrialized anddeveloping. The assessment demonstrates that because This rapid assessment report istheresult with climate policycould at thesametme which shows that resource efciency combined who thoroughly reviewed thebest science It isexactly for these reasons that theG7at Internatonal Resource Panel to produce a economicgrowth andemployment, if supported efciency can have, ifitisimplemented carefully experts oftheInternatonal Resource Panel and supported across diferent sectors andat as well asthehuge potental that resource available. Thefndingsofthereport point out of themodellingundertaken for thisstudy, of atrulycollectve efort by scientsts and of theirincreased commitment to improving their SummitinGermany inJune2015,aspart the importance ofjoiningforces for actngnow their eforts inresource efciency, asked the is tremendous. Thisissupported by theresults inefcient, thepotental for resource efciency in resource efciency could actuallyleadto a solutons for resource efciency for allcountries many areas ofresource useare relatvely by well-designed policies. how resource efciency can leadto higher positve economic outcome. Thereport shows multple levels. Thepressing needto invest report onthemost promising potentals 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 efort in presentng a comprehensive Looking forward, the report demonstrates up-to-date perspectve for understanding the numerous examples from diferent countries potentals and economic implicatons around the world of increasing resource of resource efciency. Their remarkable work efciency in diferent sectors. It thereby puts gives us hope that with engaged actors, it

the diferent challenges ahead into perspectve will be possible for us to improve wellbeing Resource Efciency: Potental and Economic Implicatons 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, •

Internatonal Resource Panel IRP forSummary Policy-Makers

r ane Potonik r licia rcena Ljubljana, Republic Santago, of Slovenia Chile

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Foreword O efciency. Thisrapid assessment report - efciency asacore element ofsustainable considerably, culminatng last year inthe As partofthat commitment, theG7asked developing countries. developed countries, emerging economies and development. across theeconomic anddevelopment acton by allcountries to change theway and most promising solutonsfor resource and trends ofresource efciency andpresents promote ambitousactonsto improve resource Implicatons Resource Efciency: Potental andEconomic spectrum. Genuineandefectve internatonal synthesis report that highlights thepotental will notbesufcient. Achieving anincrease to championresource-efciency, that alone the Internatonal Resource Panel to prepare a that resources are produced andconsumed in resource efciency willrequire aconcerted While itisessental andsignifcant for theG7 Development Goalsandinthedecisionby leaders oftheGroup ofSeven (G7)natons to historic adopton ofthe17Sustainable best-practces andpossiblesolutonsfor and sustainable management of natural resources hasincreased ver thepast decade, the importance ofresource efciency -provides ananalysis ofthestatus

economies whilepreserving thenatural cooperaton willmake transformaton to a challenges determined by local contexts that of resource efciency represents amajor generatons. Inshort,theglobalimprovement Achieving thiswillonlybepossible with appliances for setng therequired average reaching nearly45percent for household at alllevels, alongwiththeacknowledgement an historic opportunityto builddynamic, resource efcient future areality. make a‘one size ftsall’solutonimpossible. resource baseandenvironment for future standard inafuture year, ledto efciency signifcantly to increased recycling rates, The examples inthisreport illustrate what sustainable, innovatve andpeople-centred waste in2012.Italsoshows that Japan’s ‘Top waste in2014,upfrom 26percent for overall with notonlyamajorchallenge, butalso the highest performing energy-efcient that there are diferences inresource the 2030Agenda. Such atransformaton presents allcountries is working andwhy. Thereport shows that a instrument to achieve thegoals we have set in Runner’ scheme, whichusesasabenchmark Runner’ focused politcal will,actonanddeterminaton landfll tax intheUnited Kingdom contributed Summary for Policy-Makers

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

felds planted with acacias, compared to 1.3 t/ Resource Efciency: Potental and Economic Implicatons ha outside of the tree canopy.

These examples show what is possible if we work ambitously and jointly and should fll us with hope and motvaton for the way forward. It is my strong desire that the fndings of this cim Steiner nder-Secretary eneral important report will inspire determined and Eecute irector acton in increasing resource efciency. UNEP Nairobi, Kenya, March 2016

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Summary forSummary Policy-Makers

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Summary for Policy-Makers Contents

ey Messaes 3 Introducton 6

e imperate and opportunity of increased resource efciency 12 e imperate of increased resource efciency 12 2.1.1 Substantal increases in resource efciency are essental for meetng the SDGs 12 2.1.1.1 Future availability of material resources 13 2.1.1.2 Volatlity and long-term increases in resource prices 16

2.1.1.3 Sustainable use of renewable resources 17 Resource Efciency: Potental and Economic Implicatons 2.1.1.4 Environmental impacts of resource extracton and use 22 2.1.2 Substantal increases in resource efciency are essental for meetng climate change targets cost efectvely 24 e economic opportunity of increased resource efciency 26 2.2.1 Costs and benefts of increasing resource efciency 26 2.2.2 The benefts of reducing externalites 28 2.2.3 The macroeconomic benefts of resource efciency 30

est practces for increasin resource efciency 32 ercomin arriers to resource efciency 34 Initates and prorammes for increased resource efciency 35 est practce eamples of successful resource efciency 38 3.3.1 Materials 38 3.3.2 Land and soils 44 3.3.3 Water 49

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3.3.4 Energy 55 forSummary Policy-Makers Systems tinkin and neus issues 61

Conclusions 62 e imperate and opportunity of resource efciency 62 est practces for increasin resource efciency 63

References 67

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

Key Messages

With concerted acton, there is signifcant potental for increasing

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resource efciency, which will forSummary Policy-Makers have numerous benefts for the economy and the environment

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers envisaged by theSDGs. protecton to deliver “thefuture we want”, as such development withenvironmental vital for humandevelopment, andfor balancing critcal to providing theresource securitythat is resilience. Increases inresource efciency are improves overall economic andenvironmental both short- and long-term benefts, and human well-being. Resource efciency yields consumpton have many negatve efects on natural resources. Current paterns ofresource economy-wide management ofawholerange of (SDGs), 12directly dependonthesustainable Of the17Sustainable Development Goals Resource useiscentral to humanprosperity. cost eectely meetn climate cane tarets efciency isindispensalefor protectn teenironment enalin deelopment ile eelopment oalsSs to meet teSustainale resource efciency are essental Improin resource Sustantal increases in

require muchenergy, at present mainlysourced The extracton, processing anduseofresources reform andstrategic useoffscal policy in enablinginfrastructure, environmental tax and targeted regulaton, appropriate investment change, andsomecombinaton ofintelligent and directon ofinnovaton andtechnical to beovercome through changes to therate this willrequire barriers to resource efciency growth and employment. However, achieving resource efciency can yieldhighereconomic There isstrong evidence that increasing (CO from fossil fuelswithresultng carbon dioxide and ocreaton contriute to economic rot 2 degrees Celsius ( to keep average globalwarming well below it willbedifcultandsubstantally more costly signifcant improvements inresource efciency, for many low-carbon technologies. Without from theincreased material usethat isrequired substantally, aswell astheadverse impacts Resource efciency can reduce theseemissions CO and landusechange entails emissionsofboth

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

Summary for Policy-Makers

and sustainable public procurement in use in 2050 by 28 per cent relatve to existng support of resource efciency and innovaton. trends, while reducing greenhouse emissions Targets for resource efciency increases and boostng income and economic growth. need to be set and progress towards them monitored. Increased resource efciency ere are sustantal areas of is practcally aainale Resource Efciency: Potental and Economic Implicatons opportunity for reater resource efciency There are numerous examples from countries around the world at very diferent stages Many areas of resource use are relatvely of development of increasing the resource inefcient, presentng signifcant opportunity efciency of diferent sectors and economic for improvement in many areas of the economy. actvites, thereby gaining social, environmental Developing countries have further opportunites and economic benefts and helping to realize to design their infrastructure and development a world worth living in. The challenge for policy- paths in a resource-efcient way from the makers is to learn from and scale up these good outset. New modelling undertaken for this practces, and to conceive and implement a set report fnds that resource efciency combined of transformatve policies suitable to countries’ with climate policy could reduce global resource specifc circumstances.

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Summary forSummary Policy-Makers

5 Summary for Policy-Makers

Summary for Policy-Makers Summary for Introduction •

ote: This report on resource is is a report aout prospects for resource efciency has been produced by efciency It considers o resource efciency the United Natons Environment can contriute to economic rot and Programme’s (UNEP) Internatonal deelopment at te same tme as reducin te NResource Panel (IRP) in response to a request by orlds use of materials enery iomass and G71 Leaders at the Summit held in June 2015 in ater and te resultn enironmental 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 confrm the internatonal community’s IRP and other internatonal organizatons and shared commitment to achieving equitable and researchers in this area (UNEP, 2017). sustainable development. The 2030 Agenda for Sustainable Development, with its 17

1 The Group of Seven (G7) natons is made up of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States. The European Union (EU) is also represented. Prospects and Economic Implicatons of Resource Efciency of Resource Implicatons and Economic Prospects

6 Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

Sustainable Development Goals (SDGs), is now industrialized and emerging economies and the most complete expression of the positve other developing countries to join forces to aspiratons of human societes worldwide eradicate poverty, and protect Earth’s resources through to 2030. Further, the agreement in Paris and ecosystems for the beneft of present and • at the 21st Conference of Partes (COP 21) to future generatons. forSummary Policy-Makers the United Natons Framework Conventon 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 defniton and terminology of Both the 2030 Agenda and the Paris Agreement resources that are used in this report, and how are highly signifcant in that they commit resource use is measured.

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers resources produced orenvironmental Measures may distnguish between its volume (for instance, incubicmetres). (for instance, insquare metres) andwater by tonnes. Landisusuallymeasured by itsarea quanttes ofwhichare ofen measured in metals, andnon-metallic minerals, the four majorcategories: fossil fuels,biomass, Material resources are ofen dividedinto example, metal ores, rather thanmetals). extracton 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, thecombuston ofthelater beingthe metal ores, non-metallic minerals, andfossil biodiversity. Sub-soilresources comprise conjuncton withsoilproduces biomassand or thehabitats ofother species),whichin of terrestrial space(for humanhabitaton (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 impacts occurringinaterritory, andthose unit ofvalue added. similarly theenvironmental pressure per value added.Environmental intensity is measured by resource useperunitof of resource productvity, andistherefore impacts). Resource intensity istheinverse environmental pressures that cause such resource efciency impliesreducing the impacts ontheenvironment (increased resource extracton orusehasnegatve resource input);andtheextent to which useful outputorvalue addedperunitof given quantty ofresources (measured by to whicheconomic value isaddedto a input); theresource productvity, orextent output perunitofenergy ormaterial (measured by theuseful energy ormaterial the technical efciency ofresource use used to encompass anumberofideas: The term “resource ishere efciency” minerals) andcarbon dioxide. biomass), water, materials (metals and the landrequired for theproducton of footprints are thosefor land(whichincludes or “footprints”. Thefour maincalculated called “consumpton-based” indicators a country’s fnaldemand.Thelater are supply chainofaproduct or orservice associated withorarisingfrom thewhole

Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

Earth provides natural resources in In many parts of the world, supplies of abundance, and human populatons use freshwater are stressed or scarce (WWAP, them abundantly. In 2015, 84 billion tonnes 2015). of materials were extracted and used by the human economy (UNEP, 2016c). A third of Human actvity is changing ecosystems rapidly • land on Earth is now cultvated to meet human and extensively, largely in response to increasing forSummary Policy-Makers needs and wants (FAO, 2016; UNEP, 2014a). demands for food, fresh water, tmber, fbre, Globally in 2005 humans consumed 25 per cent minerals and fuel (MEA, 2005; UNEP, 2012a). of the biomass produced on land in that year These changes have depleted and degraded (Haberl et al., 2014; Krausmann et al., 2013). many ecosystem services, increased risks of An estmated 61 per cent of commercial fsh sudden and disruptve environmental change, populatons are fully fshed, and 29 per and exacerbated poverty for some groups of cent are overfshed (FAO, 2014). people (MEA, 2005).

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Source: UNEP(2011a),Figure1,p.xiii iure : the sameperiod(OECD, 2012). for water could increase by 55percent over cent, respectvely, by 2050(FAO, 2012).Demand could increase by 60percent and80–95per the amount in2015.Demandfor food andfbre 2050 (Schandlet al.,2015),more thandouble been projected to reach 183billiontonnes by usual’, annualglobalmaterial extracton has UNEP, 2012a).For example, under‘businessas demand for resources (Krausmann et al.,2009; increase pressures ontheenvironment and business-as-usual mode,islikely to dramatcally coupled withcontnued economic growth ina of Africa andAsia (UN, 2015).Thisincrease, is likely to beconcentrated inurbanregions from 2015.Muchofthepopulaton growth 9.7 billionin2050,anincrease of33percent The world populaton isprojected to reach Decoupling ofresource useandenvironmental impactsfrom GDPgrowth.

that there are majorconstraints onthesupplies This report draws onmany sources to show and environmental impactsactuallydeclining decoupling) resource (relatve GDP than rate slower much a at increasing use resource of theSDGs.However, Figure 1alsoshows such asmight be implied by theachievement domestc product –GDP)andhumanwell-being gross by (measured performance economic for Figure 1, whichshows increasing trajectories The concept ofdecoupling isrepresented 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 Economic actvity (GDP) Resource use Environmental impact Human well-being Impact decoupling Resource decoupling decoupling ofresource useand Time Summary for Policy-Makers

(absolute environmental decoupling). This imperatve of increased resource efciency conceptual fgure therefore indicates the ideal come opportunites for increased economic goal of resource efciency through the noton of growth and employment. The report then decoupling – that economic output and human documents some best practces in resource well-being shall contnue to increase, at the same efciency in the use of materials, food, land, tme as rates of increasing resource use and water and energy, and how they have been environmental impact are slowed, and in tme implemented. The study concludes that the

brought into decline, thereby sustaining resource opportunites for resource efciency are Resource Efciency: Potental and Economic Implicatons use and the delivery of ecosystem goods and numerous and benefcial for both the economy services for current and future generatons. and the environment, and could facilitate social development. They are also atainable The capacity of Earth to contnue to with public policy interventons. provide resources for human populatons in the immediate and more distant future is a mater There are therefore strong reasons for seriously of critcal importance. In order to addressing resource efciency and exploring avoid dangerously depletng that capacity, more deeply the opportunites for it. These it is vital that humans use Earth’s resources reasons explain the increasing interest from more efciently. governments and other policy-makers in resource efciency, and the large volume of This report frst makes the case that literature on this subject, on which this report increased resource efciency is essental 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 scientfcally delineated “safe operatng space” (Stefen et al.,

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2015). Remaining within such ecological limits, forSummary Policy-Makers as is pledged in the case of climate change by the COP21 agreement, is an imperatve 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 disruptons and associated resource price volatlites. It is then shown that with the

11 Summary for Policy-Makers

2. The imperative and opportunity of increased resource effciency Summary for Policy-Makers Summary for

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e imperate of iure : Number of Sustainable Development Goals that increased resource efciency directly depend on the sustainable use of natural resources.

Sustantal increases in resource efciency are essental for meetn te Ss

While atainment 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 (2017) Resource Efciency: Potental and Economic Implicatons and Economic Potental Efciency: Resource

12 Summary for Policy-Makers

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

of renewable resources, and the environmental Resource Efciency: Potental and Economic Implicatons impacts of resource extracton and use. iure : Global material extracton in billion tons, and global GDP in trillion US $ (2005 prices), uture aailaility of 1970-2015. material resources

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

and biomass – increased eightold between 40 30 GDP 30 1900 and 2005. This was twice the rate of billion tonnes 20

populaton growth, but somewhat less than 20 trillion US$, 2005 prices aterial etracton (ued) etracton aterial 10 the rate of GDP growth, which increased by 10 0 0 an estmated factor of 19, at constant prices, 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

over the twenteth century (De Long, 1998). Biomass Fossil fuels Metal ores These statstcs therefore present long-run Non-metallic minerals GDP

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evidence of “relatve decoupling” of material forSummary Policy-Makers extracton from GDP. However, such relatve resource decoupling does not entail an absolute Source: Material extracton data from UNEP (2016c), reducton in resources used. Figure 3 shows GDP data from UNSD (2015).

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

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers manufacturing, andtowards service-based structural shifsaway from heavy industry and in thesecountries, itmay also becaused by to amore economically efcient useofmaterials increasing MPofG7countries may bepartly due developing world. Thus,whilethehigherand industrial transformaton inmany partsofthe material productvity. This istheresult ofrapid productvity to countries withmuchlower of producton from countries withhighmaterial productvity occurred because ofaglobalshif 3). Therecent fall inoverall globalmaterial rate thanGDPduringthisrecent period(Figure fact that material extracton increased at a faster declined slightly since2000,whichrefects the has remained practcally constant, andeven that at theglobalscale material productvity year onaverage. However, Figure 4alsoshows increases slightly, at arate of1.2percent per lower throughout theperiod,thoughitalso in theBRICS of 1.9percent peryear. Material productvity countries increased steadily at anaverage rate domestc material consumpton (DMC) amount ofeconomic outputperweight of material productvity (MP)–measured asthe Figure 4shows that over theperiod1970-2010, 4 3 Brazil, RussianFederaton, India,China,SouthAfrica DMC measures thetotal amount ofmaterials directly usedby aneconomy, andiscalculated asdomestc extracton, plus allphysical sumpton_(DMC) imports, minusallphysical exports. See:htp://ec.europa.eu/eurostat/statstcs-explained/index.php/Glossary:Domestc_material_con 4 group ofcountries issubstantally 3 –inG7

aterial productvity Source: Data fromUNEP(2016c) economy, 1970-2010. kg ofdomestc material consumpton (DMC)inthe BRICS andG7countries, inconstant US$2005per iure : share andimported ofservices manufactured actvites. Economies withanincreasing US$, 2005 prices/kg burden oftheirconsumpton “exportng” thematerial andenvironmental may rather involve economies service-based productvity onagloballevel, andindeed this doesnotnecessarilyincrease material their changingeconomic structure. However, productvity, onaDMCbasis,asresult of goods can therefore increase theirmaterial 3.0 2.5 2.0 0.0 1.0 0.5 1.5 1970

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2010 . . - Summary for Policy-Makers

This efect 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 afer the later sufered a substantal and the world as a whole. The MF measure drop following the 2008 global fnancial crisis. allocates all upstream material extracton 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 fnal consumpton, rather than the consumpton than BRICS countries or the world

country or countries of producton. The fgure average, even if the material extracton and Resource Efciency: Potental and Economic Implicatons shows that the MF of BRICS countries has been resultng environmental impacts do not all take rising steadily and is now approaching the place within G7 countries. global average, representng rising consumpton Overall, these data suggest that while long-run relatve decoupling of material extracton from GDP can be observed at a iure : Per capita material footprint of global level, this relatve decoupling is not domestc fnal demand in the G7, the BRICS sufcient to prevent a persistent increasing and the global economy, 1990-2010, in tonnes. trend in absolute resource extracton. Indeed, in contrast to the long-run relatve decoupling trend over the 20th century, recent years’ 30 data suggest that resource extracton has 25 begun to increase at a faster rate than GDP,

20 suggestve of “recoupling”.

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tonnes Human populatons are stll growing, as

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10 are their economies. Current trends forSummary Policy-Makers suggest that a growing global populaton

Per capita Material Footprint Material capita Per 5 with rising average wealth will contnue to 0 1990 1995 2000 2005 2010 drive up the consumpton and use of materials. World ...... BRICS G7 These drivers have been projected to push material extracton towards 183 billion tonnes per year by 2050 as previously mentoned. The Source: Data from UNEP (2016c) mobilizaton of such quanttes of materials

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers over tme(UNEP, 2015b; and seeFigure 6for highly volatle resource andcommodity prices of resource supply, whichhave produced The second issuerelates to themarket dynamics increases inresource prices their future availability. the risks andthreats ofseriousdisrupton to and recycling ofsuchmaterials can reduce (BMUB, 2012;UNEP, 2014a).Theefcient use inputs to landfor theproducton ofbiomass 2013c). Nitrogen andphosphorusare crucial turbines (BMUB, 2012;UNEP, 2010,2013b, photovoltaic cells,bateries, catalysts andwind in low-carbon technologies suchassolar to reduce carbon emissionsdueto theirroles quanttes, willbeincreasingly critcal to eforts and neodymium,thoughmobilized insmaller elements suchasindium,platnum, rhodium in providing large-scale infrastructure, and iron, copper andaluminiumplay critcal roles sustainably consumed. Bulkmetals suchas which placesboundsonwhat can be while renewable, hasalimited rate ofrenewal, concentrated (UNEP, 2015b).Biomass, are fnite, andmany are geographically increasingly challenging.Ores andminerals and tmelymanneryear afer year, willbe within theglobaleconomy, inasmooth olatlity andlon-term

In additon,there isevidence that thelong, commodity pricemovements over 2010-2015). especially in resource-importng in especially regions. security, resource increase and resources, improve equitable andafordable access to the negatve economic impactsofprice volatlity, dampen to able be may it then resources, for If resource efciency can reduce thedemand high food prices. countries in2007-2008partlyresponse to atested by theriotsthat broke outinnumerous and even underminingpeaceandsecurity, as investment, owing to increased uncertainty; poorest andmost vulnerable groups; hampering restrictng market access, partcularly among the serious economic andsocialchallenges by High andvolatle resource pricescan present an upward course again. the pricesofcommodites, includingfood, on demand growth inemerging countries willset by climate policy, itislikely that induecourse fuels, demandfor whichmay beconstrained (see Figure 6),andwiththeexcepton offossil p.6). Despite thedramatc fall inprices2014 2000 to 2012(Dobbs et al.2013,Exhibit1, commodity pricesincreasing steadily over to anendat thestart ofthetwenty-frst, with that characterized thetwenteth century came slow declineinresource andcommodity prices

Summary for Policy-Makers

iure : IMF commodity price indices, statstcs, 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 Efciency: Potental and Economic Implicatons 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

100 agricultural land in regions such as South-East Asia and South America have ofset 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 reductons in cropland in Europe with increased Source: IMF (2016) htps://www.imf.org/external/np/ imports of soybean for catle feed from Latn res/commod/index.aspx America, as these replace the domestc growing of fodder crops (Dalgaard et al. (2008), in UNEP Sustainale use of (2014a), p. 25). The locaton of any expansion reneale resources of agricultural land is signifcant 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 partcular 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). forSummary Policy-Makers biodiversity and fsh stocks. These resources critcally underpin the viability of such vital Global producton of primary crops more sectors as agriculture, fsheries and forestry. than tripled from 1961 to 2013 (FAO, 2016). Over the same period, global cropland area Vast areas of land are now cultvated 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

17 18

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers possible outcome ofcontnued highproducton resource shortages andpricerisesare a geographically concentrated resources, and challenges. Fertlizer inputsare fnite and expansion infood producton, itcomes with important to global supportanecessary Although thisproductvity increase hasbeen Source: Data from(FAO, 2016) and crop yields,1961-2013.Index: 1961=1. iure : (FAO, 2016). almost three tmesbetween 1990and2011 also asignifcant input–theirapplicaton grew increasing by around fve tmes.Pestcides are the period,withapplicaton offertlizers cropland equippedfor irrigaton doubledover inputs. Asshown inFigure 7,thearea of delivered by substantal increases inagricultural productvity ofland,whichinturnwas Index: 1961=1 5 6 4 3 1 2 0

1961 1964 1967 Growth incropland, agricultural inputs 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000

2003 2006 2009 2012 or irrigaton Cropland area equipped ertlier Cropland yield Cropland area

will bediscussedinthefollowing secton,the (BMUB, 2012;Senthilkumar et al.,2014).As based food (UNEP, 2009). land for agiven level ofnutritonthanplant- rearing animalsrequires nearlyfve tmesmore by 90percent (FAO, 2015a).Food derived from (1990-2015) globalmeat consumpton increased of theglobalpopulaton. Inthesameperiod 1990, whichat that tmewas almost 19percent people hasdecreased from around 1billionin 23 percent. Thenumberofundernourished Saharan Africa hasthehighest prevalence, at undernourished peoplelive inAsia,whilesub- were undernourished.More thanhalfofthe people, 11percent oftheworld’s populaton, unevenly distributed. In2015about795million Rosegrant, 2009; UNEP, 2014a). Access to foodis associated withrisingafuence (Msangiand hunger andmalnutriton,dietary changes by populaton increases, eforts to combat for food supplymay beexpected, driven At thesametme,anincreased demand al., 2008;Bruinsma,2009;UNEP, 2014a). growth rates to contnue to slow (von Witzke et previous decades, andexperts expect yield cereals are increasing at aslower rate thanin indefnitely. There isevidence that yields for and pestcides can contnue to increase yields not clearthat increasing applicaton offertlizers compounds causes polluton.Furthermore, itis extracton andconcentrated applicaton ofthese Summary for Policy-Makers

Owing to the expected contnued future growth for biofuels and biomaterials, and loss of land in food demand, the OECD projects global to the built environment and soil degradaton. agricultural land (cropland and permanent UNEP (2014a) estmates 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 contributon and considers – in additon to food demand – of diferent drivers to this projected cropland

other pressures, including increasing demand expansion is shown in Figure 8. Resource Efciency: Potental and Economic Implicatons

iure : Trend of global cropland expansion from 2005 to 2050 for satsfying food demand and compensaton of soil loss.

o Etmate a ig Etmate egend

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

•

Summary forSummary Policy-Makers

Source: UNEP (2015c) htp://www.unep.org/resourcepanel/Portals/50244/publicatons/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 shif of cropland to other areas due to losses from severe land degradaton – in partcular from soil erosion – and built-up land.

19 20

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers 2010. Thisrate ofgrowth inwater consumpton in 1900to 4,500billioncubicmetres per year in use grew from 600billioncubicmetres per year human need. Water consumpton for human Access to clean water isanother fundamental very limited. growth withinthe“safe operatng space”is (FAO, 2016),itisclear that thescope for further that cropland now covers around 1,580Mha With more recent FAO statstcs suggestng cropland area usedasthebaselinefor thestudy. Mha, ora10percent increase from the2005 1,640 Mha.Thisrepresents anexpansion of140 for landonlyallows cropland to expand to upto UNEP’s estmate ofthe“safe operatng space”

stressed orcritcally depleted. Arate ofwater partcular areas can become contaminated, water cycle water isunchanging, resources in Though thetotal amount ofwater intheglobal between 1961and2013, asillustrated inFigure 7. the doublingofcropland equipped for irrigaton the intensifcaton ofagriculture isevidenced by 2009; FAO, 2011).Theimportance ofwater to industrial anddomestc demand (Addamset al., between evenly fairly divided being remainder the withdrawals, water global of cent per 71 for intensifcaton. At present, agriculture accounts lifestyles, aswell asindustrial and agricultural 2012b), refectng increasingly water-intensive (UNEP, growth populaton of rate the twice was 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 substantal 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, resultng is ‘critcal’” (FAO, 2011). East and South-East in unsustainable depleton 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 Efciency: Potental and Economic Implicatons iure : Total renewable water resources per capita (2013).

•

Summary forSummary Policy-Makers 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 (htp://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

21 22

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Mobilizing billionsoftonnes ofraw materials impacts ofresource extracton and use. The fourth issuerelates to theenvironmental resource etracton anduse of somefshpopulatons. levels ofextracton threaten seriouscollapse are therefore overfshed (FAO, 2014).These fshed at biologically unsustainable levels and 61 percent are fullyfshedand29percent are exploitaton. Ofcommercial fshpopulatons, threatened by unsustainable levels of under pressure, withmarinebiomass Marine andaquatc ecosystems are also serious concern inmany partsof theworld. (WWAP, 2015).Water scarcity istherefore a change could furtherexacerbate suchproblems prices, andindeedto confict. Increasing climate et al.,2009).Thismay leadto efects onfood this defcit (Addams is larger than50percent” in developing countries, willlive inbasinswhere that “one-third ofthepopulaton, 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 andnoefciency gains, by 2030annual It isprojected that, withaverage economic Enironmental impactsof

in terms ofpolluton,landdegradaton and each year hasseriousenvironmental efects, The extracton offertlizer inputssuchas considerable increases inagricultural inputs. agricultural landhasbeenachieved through Figure 7theincrease intheproductvity of and biodiversity (UNEP, 2013b).Asshown in with corresponding efects on humanhealth such asthrough smelter stack emissions, compounds into water, soilsandtheair, for example therelease oftoxic oracidic has signifcant environmental impacts, The extracton ofmetals andminerals also UNEP (2010). causing algal bloomsthat harmecosystems of environments suchaslakes withnutrients, causes “eutrophicaton” –the over-enrichment health; andemissionsofnitrogen, which toxic pollutants, whichare harmful to human the release ofsmallpartculates andother sulphur oxides –SOx) that cause acidrain; of acidpollutants (nitrogen oxides –NOx, and to climate change. Theseinclude emissions negatve environmental impactsinadditon which are amajorsource ofawiderange of dominated by fossil fuels:coal, oilandgas, climate change. energy Globalprimary is fuels isthelargest contributor to anthropogenic The extracton andcombuston offossil loss ofbiodiversity.

Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

phosphates can create polluton through the as its environmental quality (UNEP, 1997). The release of heavy metals and radionuclides main causes of land degradaton are water (BMUB, 2012). The increased applicaton of erosion, wind erosion, nutrient mining, water nitrogen and phosphorus fertlizers has resulted logging and salinizaton caused by irrigaton, in considerable nutrient polluton, including lowering of the water table, over-use of eutrophicaton, increases in atmospheric ozone, chemical inputs, soil compacton and loss of fne partculate mater, acidifcaton of surface organic mater (FAO, 2015b; Scherr, 1999). waters, which contributes to biodiversity loss, Globally, according to FAO, about 25 per cent and GHG emissions due to the producton of of all land is highly degraded or fast degrading.

• nitrous oxide (N2O) (UNEP, 2014a). Moreover, Around 8 per cent is moderately degraded forSummary Policy-Makers the producton of fertlizers is energy-intensive with a moderate degradaton trend, while 36 and generates energy-related CO2. Pestcides, 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 substantally since 1990 (FAO, 2016), also improving (FAO, 2011). have negatve environmental impacts. Intensive land use can also degrade the Overall, the four issues discussed above “productve capacity” of the land itself, as well consttute signifcant threats to achieving

23

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Meetng at the21 a cost-eecte manner meetn climate cane tarets in resource efciency are essental for services. those resources andrelated provisioning protectng theecological systems that underpin afordable accessto thoseresources; 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 efciency iscentral to 6 and for GHGemissionsto be“nearzero Gt 2050 to be40-70percent lower thanin2010, scenarios require globalGHGemissions in 450 partspermillion(ppm)CO atmospheric concentratons in2100ofabout this goal isachieved, “are characterized by (IPCC) Intergovernmental Panel onClimate Change above pre-industrial levels. According to the keep globaltemperature riseto lessthan2°C 2015, theworld’s governments pledged to on Climate Change (COP 21) Gigatonnes carbon dioxide equivalent. , scenarios in which it is “likely” that, scenariosinwhichitis“likely” Sustantal increases in to theUNFramework Conventon st Conference ofPartes (UNFCCC) inParis in 2 eq”. Such

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

2

Summary for Policy-Makers

In order to achieve the emissions reductons In the light of this conclusion, the Internatonal 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 critcal, in Paris. The IRP concluded these messages as is explored in detail in numerous scenarios as follows: “Raising resource productvity by the IPCC and others (IEA, 2010, 2012a; IPCC, through improved efciency and reducing 2014). However, in additon to supply-side resource waste … can greatly lower both

decarbonizaton, energy demand reducton resource consumpton and GHG emissions. Such Resource Efciency: Potental and Economic Implicatons through resource efciency will also have a measures also confer additonal, highly desirable crucial role. The IPCC states that “efciency social benefts 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 polluton. Decoupling economic to baseline scenarios without compromising growth and human wellbeing from resource use development, are a key mitgaton strategy has, therefore, to be an integral part and prime in scenarios reaching atmospheric CO2eq concern of climate policy” (UNEP, 2015a). concentratons 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 meetng climate change targets level of demand reducton relatve to baselines provide a strong imperatve for resource in the transport, buildings and industry sectors efciency, 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 consumpton. show even higher sectoral demand reductons of up to 60 per cent (IPCC, 2014). Increasing But there is also evidence that resource

• resource efciency is a critcal strategy to efciency can bring substantal economic forSummary Policy-Makers enable such necessary demand reductons to be benefts, including higher rates of economic achieved, without negatvely afectng human growth and increased employment. This development and well-being. evidence is documented below.

25 26

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers would be $2.9 trillion per year. In 70 per cent of of cent year.per 70 per In trillion $2.9 be would implementng allthe technologies considered private investor, thesavings in2030arisingfrom (2011). Thisstates that from the perspectve ofa one ofthe most ofen cited isfrom Dobbs et al. which efciency,of resource increasing of costs There have been anumberofestmates ofthe resource efciency to increase economic outputandemployment. macroeconomic implicatons, withthepotental increased resource efciency have positve And third, thecost reductons arisingfrom resource usebringsubstantal external costs. the negatve environmental efects ofinefcient that would provide net cost savings. Second, there are ways to increase resource efciency efciency may beexpressed inthree ways. First, The economic opportunityofincreased resource increased resource efciency 8 7 While Sorrell et al.(2004)seemto bethinkingofprivate organizatonsconnecton, inthis suchfailure could apply to public These benefts have beencalculated at the market pricesofresources prevailing in2010.To theextent that resource priceshave de bodies aswell. achieve environmental improvements at lower cost thanthrough other means. resource efciency can present opportunitesto reduce frms’andcountries’ vulnerability to pricevolatlity, andmay provide ways to clined since2010,andthisisespeciallytrueoffossil fuels,thebenefts ofresource efciency willbeproportonally less.Buteven then e economic opportunityof osts andenets ofincreasin • • investments istheproduct ofthree phenomena: failure to make cost-efectve energy efciency resources. Sorrell et al.(2004)suggest that the the arguments applyequallywell to other thoroughly explored for energy efciency, but realize thesebenefts. Thisissuehasbeenmost do notmake investments thenecessary to investments inresource efciency, investors such benefcial cost-saving opportunitesfrom It may immediately beasked why, ifthere are would ofer a rate of return greater than 10 per per 10 than greater return of rate a ofer would cases, the required resource-efcient investment million jobs” (Dobbs et al.,2011, p.12). 25 to million 9 create potentally “could required cent per year. The total $900 billion investment

policy imperfect organizatonal structure and Organizatonal failure informaton; competton andasymmetric orimperfect and negatve externalites, imperfect result of incomplete property rights, positve Market failure 8 ; and , normallyidentfed asa , asaresult of

7

- Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

• Non-failure, where organizatons and The existence, strength and persistence of these

individuals are in fact behaving ratonally in barriers vary from issue to issue. Therefore, •

not taking up the efciency opportunites atempts to improve resource efciency should forSummary Policy-Makers because of hidden costs. These may seek to understand the barriers individually, in include “overhead costs for management, order to correctly identfy the most appropriate disruptons to producton, staf replacement measures to surmount them. In doing so, there and training, and the costs associated is evidence that increasing resource efciency with gathering, analysing and applying will tend to strengthen the innovaton capacity informaton” (Sorrell et al., 2004, p.55). of economies (Bringezu, 2015).

27 28

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers in fossil fuelconsumpton could be achieved et al.,2015).Muchoftherequired reducton regional GDPwithsubsidy eliminaton (Coady a welfare gain equivalent to 6.9percent of populaton livinginAsia,which experiences to themore than50percent oftheworld’s GDP in2013.Most ofthisgain would accrue trillion, equivalent to 2percent ofglobal externalites) isestmated to beUS$1.4 is, thosedueto bothfnancialsubsidiesand from eliminatng allfossil fuelsubsidies (that potental globalgain ineconomic welfare in 2015to bearound US$4trillion.The local airpollutonfrom burningfossil fuels external costs related to climate change and The IMF(Coadyet al.,2015)estmated the subsidies to that use,are very large indeed. resource use,whichmay alsobeconsidered The environmental externalites of which they may result. any otherbenefts (suchascost savings) in improve economic efciency, over andabove measures that reduce theseexternalites will in market transactons. Resource efciency environment, that are nottaken into account is, negatve impacts,for example onthe results innegatve externalites –that The extracton anduseofresources ofen eternalites e enets ofreducin

Summary for Policy-Makers

through increased energy efciency rather fnancial subsidies to energy, agriculture and than reducton 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 efciency “opportunites” society from resource efciency 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

perspectve to US $3.7 trillion from a social categories are shown in Figure 11. Of these 15 Resource Efciency: Potental and Economic Implicatons perspectve 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 beneft.

iure : The top 15 categories of resource efciency potental.

ieen group o opportunite repreent Energy and percent o te reource aving ater teel ocietal perepectve otal reource enet¹ verage ocietal cot illion ( dollar) eciency²

uilding energy eciency 696 0.5 argecale arm yield 266 0.4 ood ate 252 0.5 unicipal ater leaage 167 0.2 ran denicaton 155 0.9 Iron and teel energy eciency 145 0.2 mallolder arm yield 143 0.4 ranport eciency 138 0.5 Electric and yrid veicle 138 1.2 and degradiaton 134 0.5 Endue teel eciency 132 0.4

il and coal recovery 115 0.5 •

Irrigaton tecniue 115 0.2 forSummary Policy-Makers oad reigt i 108 0.7 Poer plant eciency 106 0.3 ter³ 892 0.6 aed on current price or energy teel and ood plu unuidied ater price and a ado cot or caron nnualied cot o implementaton divided y annual total reource enet Include oter opportunite uc a ood eciency indutrial ater eciency air tranport municipal ater teel recycling ateater reue and oter indutrial energy eciency E ciney analyi

Source: Dobbs et al. (2011), Exhibit 4, p. 14 Note: in the fgure above, ‘resource savings’ refers to the fnancial benefts of resource efciency

29 30

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers 2015). Inthiscase the result was driven by McKinsey Center for Business andEnvironment, trends (Ellen MacArthurFoundaton and with 4percent and15percent under current per cent by 2050inacircular scenario, compared European GDPby 11per cent by 2030and27 increase could transport and waste food buildings, in opportunites efciency resource economy,found which that implementng Another example isareport onthecircular exporters worse of. energy-importng countries, butmakingenergy 2035, withenergy efciency policiesbeneftng global GDPwould increase by 0.4percent by compared withtheIEA New Policies Scenario, of itsEfcient World Scenario.It found that, calculated themacroeconomic implicatons efciency, anexample isIEA (2012b),which macroeconomic efects ofincreasing energy In respect ofmodellingstudies ofthe yields macroeconomic benefts. All suggest that increasing resource efciency have beenundertaken usingdiferent models. implicatons ofincreased resource efciency Investgatons into themacroeconomic resource efciency 10 Theanalysis assumesthat: “an environmental tax suchasanemissiontax isusedto cutGHGemissions,butrevenues generated are used to stmulate theeconomy at thesametme.” (CEandBioIS,2014,p.46). e macroeconomic enets of (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 abiotc raw materials falls by more than50per GDP by 5.2percent in2050,whiletheuseof resource efciency measures increase global study usingasimilarmodelfound that the the use ofresources. However, itshouldbenoted in reductons cost to leading progress technical environmental tax reform (ETR). policy mechanismusedto bringitabout–an increase inresource productvity asby the increase inGDPisdriven notsomuchby the and BioIS,2014).However, inthiscase the with net positve impactsonEU28GDP(CE per cent perannumcould beachieved improvements ofaround 2percent to 2.5 Commission found that resource productvity exercise undertaken for theEuropean A diferent macro-econometric modelling above (Böhringer andRutherford, 2015). the barriers to increased efciency mentoned achieving thistechnical change, orovercoming is taken ofany costs that may beincurred in that in the executon of this modelling no account 10 Another Summary for Policy-Makers

study found that economic growth in the economic growth it has stmulated will increase Green scenario became higher than that in resource use and environmental impacts the BAU run afer about 2017, with the green through what is called the “rebound efect”. This investments proving more productve than the arises because money saved through resource conventonal investments they replaced efciency can be spent either on more of the (UNEP 2011b, Figure 14, p.523). same good or service, or on other goods or services, both of which may increase resource

If increased resource efciency leads to use. Rebound efects can be mitgated by policy Resource Efciency: Potental and Economic Implicatons increased output, then other things being measures (Herring and Sorrell, 2009), most equal it might be expected that it would also obviously where these measures increase lead to increased employment, and this is the cost of the resource that has been the indeed the result of some studies. Thus the subject of the efciency measure (for example, CE and BioIS (2014) study reports a 1 per through resource or environmental taxaton). cent increase in EU employment (about 2 This will be required where the objectve of million net extra jobs) in its resource efciency resource efciency improvements is actually scenario by 2030, with similar gains reported to reduce the quantty of resources used or its by Meyer et al. (2015). In the UNEP (2011b) associated environmental impacts by a given Green scenario, global employment is 0.6 per amount (for example, if increases in energy cent (21 million) lower in 2020 than in the efciency are intended to aid the atainment comparable BAU case, but 28 million higher of fxed carbon reducton targets), and explains by 2050. A report by the Club of Rome that why publicatons focusing on green growth or uses an input-output model rather than a full increased resource efciency ofen advocate macroeconomic model fnds that measures to a shif of taxaton from labour or capital to increase energy and resource efciency, and polluton or the use of resources (for example,

• the deployment of renewables, can reduce OECD, 2015; UNIDO, 2013; World Bank, 2015). forSummary Policy-Makers unemployment by up to a third in the fve Macroeconomic modelling results such as European countries studied (Wijkman and those reported above should include any Skånberg, 2015) rebound efects, which are likely to counteract to some extent the impact of resource It should be noted that, if increased resource efciency on reducing consumpton and related efciency is achieved, there is a danger that the environmental impacts.

31 32

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers effciency increasing resource 3. Bestpractices for 11 T of thismodellingexercise willfeature intheforthcoming fullIRPAssessment Report summarized here (UNEP, 2017). approach usedintheAustralian Natonal Outlook(seeHatield-Dodds et al.2015).Furtherdetails oftheanalytcal approach andresults fow model providing insights into resource efciency potental. Thisbuildsoninternatonally recognized integrated nexus modelling economic model(GTEM) to two othermodels:GLOBOIM, providing additonaldetail onlanduseand biofuels,andMEFISTO, astock- The scenarioprojectons are developed usingamult-modelframework, linkingaglobalcomputable general equilibrium(CGE) efciency carried out for this study further further study this for out carried efciency economicgrowth employment, and for most confrms such trends. The novel analysis analysis novel The trends. such confrms of them even whenenvironmental benefts are not taken into account. Original economicOriginal modellingofresource resource efciency can lead to higher higher to lead can efciency resource secton difer inthesize oftheirestmates, but allofthem show that increasing he modellingstudies cited intheprevious economically atractve resource efciency, efciency and address climate change. climate address and efciency global resource use, greenhouse emissions, ambitous actonto improve resource and economic actvityto 2050, through adopts anintegrated mult-model framework providing win-winoutcomes that reduce the in summarised are work this of results six graphs ofFigure 12, whichshow that there issubstantal potental to achieve to explore potental future pathways for pathways future potental explore to 11 The Summary for Policy-Makers

environmental pressures while increasing tonnes over the next 34 years to 2050 (top economic growth. The modelling projects lef graph), refectng a 28 per cent increase in that, under existng trends, natural resource populaton and a 71 per cent increase in per extracton will increase from 85 to 186 billion capita resource use. In contrast, the modelling

iure : Global and G7 projected resource use, economic actvity and GHG emissions under existng trends, resource efciency policies, and resource efciency plus a 2°C climate pathway, 2010-2050. Resource Efciency: Potental and Economic Implicatons

Global Resource Use (DMC) loal economic actity P per capita Global Greenhouse Gas Emissions

200 16 80

1-6% 14% 150 12 higher in 60 increase from 2015 17-28% 2050 100 reducton 8 40 in 2050 t e 50 4 20 $’000 USD (2015 real ) $’000 USD (2015 real reducton 0 0 Billion Tonnes (DMC) Billion Tonnes 0 from 2015 2020 2030 2010 2030 2040 2050 2010 2040 2050 2020 2010 2020 2030 2040 2050

G7 Resource Use (DMC) economic actity P per capita G7 Greenhouse Gas Emissions 40 80 20

13-74% 30 60 15 reducton 1-3% from 2015 higher in 20 40 2050 10 22-31%

reducton t e

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 •

Summary forSummary Policy-Makers

Eistn rends Resource Efciency E Resource Efciency plus E

Policy impacts are for Resource Efciency lue stripes and Efciency Plus reen solid scenarios in relate to or to Eistn rends scenarios in

Source: UNEP (2017).

33

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers 12 extracton by around 17 per cent globally in in globally cent per 17 around by extracton emissions in 2050 relatve to 2015 (top right right (top 2015 to relatve 2050 in emissions compared to the baseline. This refects a refects This baseline. the to compared climate acton, helpingto achieve emission graph). lef (top trends existng to compared climate change, globalresource extracton can on acton global ambitous with combinaton graph). G7natons could see theiremissions 2050 (top lef graph), against thebaseline. resource efciency improvements is beyond beyond is improvements efciency resource realized in practce. The ensuing part of the the of part ensuing The practce. in realized provides valuable informaton andknowledge reducton of around 60 per cent of global GHG GHG global of cent per 60 around of reducton 2050, in globally cent per 74 of reductons resource efciency policies more than ofsets ofsets than more policies efciency resource Though analysis of policy optons to support support to optons policy of analysis Though suggests that resource efciency policiesand the scope ofthisreport, the near-term economic costs ofambitous the stronger economic growth associated with initatves alonecould reduce resource global When resource efciency isimplemented in In this scenario, the modelling also fnds that that fnds also modelling the scenario, this In for policy-makers and other stakeholders on on stakeholders other and policy-makers for fall by up to 74 per cent by 2050, compared to to compared 2050, by cent per 74 to up by fall how increased resource efciency can be levels in2015(botom right graph). be reduced even further by upto 28percent, Implicatons. G7 to develop policyguidanceto supplement theIRP’s scientfc synthesis report on This task isbeingundertaken by theOrganisaton for Economic Co-operaton andDevelopment (OECD), whichwas invited by the

12 itnonetheless examples of how resource efciency has been been has efciency resource how of examples efectve. Butthere are many otherbarriers to efciency, even whenthey seemto becost- categories of resources – materials, land land materials, – resources of categories of local andnatonal governments, businesses of new concepts, andthe commited actons resource efciency and soils, water, andenergy. Itconcludes and citzens andcommunites. The main and natonal programmes, theimplementaton and resource efciency, expressed through low as expressed through well-functoning markets, are market andorganizatonal failures and part of this sectonpart ofthis explores best-practce resource efciency that arisebecause ofthe report presents examples of how barriers barriers how of examples presents report systemic or “resource nexus” issues. nexus” “resource or systemic successfully increased across thefour main successfully addressed, through internatonal wastage ofmaterials andtheirretenton of to increased resource efciency are being being are efciency resource increased to value over longperiods of tme. Secton 2ofthisreport showed that there by stressing the importance of cross-cutng, cross-cutng, of importance the stressing by basic diference between economic efciency, hidden costs that prevent increases inresource ercomin arriers to Resource Efciency: Potental andEconomic

Summary for Policy-Makers

The most important of these barriers arises an economically efcient calculus of the relatve because of the relatvely low cost of materials magnitude of the costs of materials, and the and of generatng waste, compared to the costs of design, logistcs and repair. costs of labour and logistcs. Components and products could in many cases be designed with Remedying such situatons requires public less material to meet their design purpose, with policies either that change directly the relatve less material wastage during the manufacturing prices of labour and materials, for example

process, to last longer and to be repaired more through reduced labour and increased resource Resource Efciency: Potental and Economic Implicatons easily. However, this sometmes does not happen taxaton, or which in other ways give greater because the added costs in terms of labour value to materials during and at the end of and logistcs to design, manage and repair the the lives of the components and products in components and products does not justfy the which they are embodied. Such policies are saved material cost or the avoidance of a new outside the scope of this report, but it should purchase. For example, in the constructon sector, be noted that it will be impossible to achieve materials are ofen found to be over-specifed considerable increases in resource efciency beyond the needs of the safety standards (UNEP, across the economy in their absence. 2014b). Material wastage during manufacture of products and components can also occur when Initates and prorammes for parts are cut from standardized intermediate increased resource efciency products such as metal sheets, leaving as much as half of the original material behind as waste. There are numerous internatonal programmes In many situatons, “counter to expectatons, and initatves to increase resource efciency, it makes good business sense to over-specify and even more at natonal levels. This materials when doing so allows a greater saving

report mentons a few important initatves to • in labour costs, and this is a difcult issue to exemplify what public policy and commited forSummary Policy-Makers overcome” (Allwood, 2014). corporate and citzen acton can achieve.

There are also innumerable examples in daily One of the most systematc approaches experience of when it is cheaper to throw away to increasing resource efciency at the even relatvely new products than to have them internatonal level has been through repaired, even when repair is possible. Such the concept of Sustainable Consumpton resource-inefcient outcomes frequently refect and Producton (SCP). The 10-Year Framework

35 36

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers of Programmes onSustainable Consumpton Another globalprogramme istheResource diminishing thegeneraton ofwaste and dependence onnatural resources and and transiton economies. Actvitesinclude actvites to promote theshifto SCPpaterns. areas, whichaimto buildcapacity to implement and Producton (10YFP)was adopted at productvity whilereducing industry’s practces, informaton andawareness-raising policies, voluntary instruments, management programmes are organized around thematc producton paterns (UN,2012).The10YFP pursue RECP practces inmany developing 60 Natonal CleanerProducton Centres that the Rio+20conference in2012asamechanism initatve, whichseeks to improve industrial Efcient andCleanerProducton (RECP) for achieving thisshifinconsumpton and harmful emissions.There are now around

eco-industrial parks, transfer ofenvironmentally others. Arecent example isthe initatve ofthe all tmes, distnguishing between technical and approaches, product andorganizatonal foot- and safe andinnovatve chemicals management materials at their highest utlity and value at promoted internatonally, includingby China, eco-labellingprintng, andcorporate repostng models, water stewardship, life-cycle based The idea ofa“circular isalso economy” sound technologies, responsible producton which aimsto keep products, components and which defnes circular economy as“one that the European Commission, Japanandmany is restoratve andregeneratve by design, and (UNEP, 2016a;UNIDOandUNEP, 2015). (including chemical leasing),new business industrial waste minimizaton, eco-innovaton, Ellen MacArthur Foundaton. The Foundaton – Summary for Policy-Makers

biological cycles” – works through a number the most infuental of which has been “the of programmes. These seek to bring together 3Rs” – reduce, reuse, recycle. In the context businesses, governments, cites and universites, of the G7, the 3R concept has played a key so as to accelerate a shif towards and build role within resource efciency strategies. The capacity around a circular economy (Ellen 3R Initatve to encourage more efcient use MacArthur Foundaton, 2016). of resources and materials was launched at the 3R Ministerial Conference in Tokyo in

China adopted the Circular Economy Promoton April 2005 (Moriguchi, 2007; Takiguchi and Resource Efciency: Potental and Economic Implicatons Law in 2008. The legislaton aims to decrease Takemoto, 2008). Later in 2008, the Kobe 3R the use, and maximize the recycling and Acton Plan was adopted under the Japanese recovery of materials in producton and presidency of the G8. consumpton. As part of its implementaton, 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 actvites. In Japan, the sound material- a Circular Economy Package to stmulate cycle society (SMCS) policy sets out fve steps the transiton of European businesses and in order of priority: reduce, reuse, recycle, consumers towards a circular economy, where energy recovery and fnal disposal. A similar resources are used in a more sustainable waste hierarchy is adopted in the EU’s Waste manner. The mix of regulaton and incentves Framework Directve. to encourage greater recycling and reuse is envisaged to help protect the environment and The Kobe 3R Acton Plan was also the mitgate climate change, alongside fostering building block for the G7 Alliance on Resource

• economic growth, job creaton, investment and Efciency, established in 2015 as a forum to forSummary Policy-Makers 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 efciency in terms advance resource efciency opportunites, of a resource management hierarchy, one of practces and innovaton (G7, 2015).

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

37 38

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers of successful resource efciency efciency agency (demea)ofers quantfed efciency can yieldquickbenefts for some energy), butwithoutlosingsight oftheircritcal demand would bethefrst priorityofmaterial are becoming increasingly aware ofthe and complex interactons, synergies and material fow analysis to helpsmallandmedium- processing materials. ExperienceinGermany management strategies, asitreduces theenergy material efciency policynotjust asafxed resource management hierarchy, andseeing number ofbest practces andsolutonsfor received thegreater partofpolicy atenton use andenvironmental impactsofextractng and suggests that, withguidance, improving material strategies and targets. However, governments The ensuingpartofthereport documents a target, butasatransiton path. Ideally, reducing trade-ofs. through natonal andlocal government (namely, materials, landandsoils,water, and increasing resource efciency. Itdistnguishes In thearea ofmaterials, recycling hasto date businesses. TheGermangovernment’s material benefts ofmoving upwards through the between diferent categories ofresources est practce eamples Materials

of-cuts lef over from material blankingsheets. of thecomponent by 25percent (Despeisse components to be produced to specifcaton with 2.3 percent ofannualcompany turnover, with Abbey Steel intheUKhasfound anicheusing development inthisregard may beadvances assist beter design ofthearrangement of and Ford, 2015).Computerizaton can also potental for mutualbeneft. For example, metals (Allwood, 2014;UNEP, 2014b). manufacturing. Suchtechniques are usedinthe reducing material wastage duringcomponent nozzles for jet enginesinthismanner, with no wastage. General Electricisnow producing manufacturing are likely through improved manufacturers andcutsit into regular blanks savings potentals. Onaverage, companies saved sized enterprises (SMEs)to identfy material smaller companies saving agreater proporton. signifcant material saving reducing theweight textle industry andare alsobeingadopted for Synergies between companies alsoofer in 3Dprintng. Thisallows highlycustomized innovatve designapproaches. Animportant (UNIDO, 2013). More substantal material reductons inproduct Investments generally paidofwithin13months It purchases blankingscrap from car body for manufacturers ofsmallercomponents blanks to ftmore closelyonafxed widthsheet, Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

(Allwood, 2014). This is an example of industrial For example, the Kawasaki Eco-Town “aims symbiosis.14 primarily for efectve utlizaton of residental, 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). Specifc government-led programme was to reduce examples of recycling actvites in Kawasaki waste going to landfll sites, of which there are recycling of plastc 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 producton; as well as paper recycling 15

the conversion of waste from one industrial and PET-to-PET plastc recycling. As well as • process into a valuable input for another reducing material waste, Dong et al. (2014) forSummary Policy-Makers (Van Berkel et al., 2009). estmate that the industrial symbiosis strategy

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

39

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers environmental industries. every government-subsidized recycling plant, of nearly2milliontonnes ofwaste peryear. government actonsto establish anindustrial As aresult ofgovernment subsidies, 61 a further1.5plants were builtby theprivate recycling facilites 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)fndthat for for furtherprivate sector-led development of by around 14percent, mainlyfrom iron and emissions by 11percent (Yu et al.,2014; energy; red mudfrom aluminaproducton alumina producton; carbon monoxide of-gas reused asabuildingmaterial. Themeasures power plants usedto make bricks; carbide slag usedasasubsttute for slaked limein symbiosis links, includingcoal ashfrom The cluster hasestablished 11industrial with aluminiumproducton at itscore. 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 thecalcium carbide factory burnedfor have beenestmated to reduce carbon

Summary for Policy-Makers

Park et al. (2016) report on the frst phase of remanufacture of appliances, packaging and the Eco-Industrial Park (EIP) programme in automotve parts. A related observaton is Korea, from 2005 to 2010. The projects involved that “successful remanufacturing tends to product, energy and water reuse between occur in more vertcally integrated companies, industries. They calculate that the 47 projects but it is not clear if this is cause or efect”. 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 Efciency: Potental and Economic Implicatons around US $97 million of cost reducton from with slow technology development” (Allwood energy and material savings, and US $92 million et al., 2011, p. 370). This guards against of revenue generaton 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 vertcal integraton and mature from material and energy efciencies, due to technologies suggest that potental barriers, in the larger upfront investment typically required additon to waste regulaton, may be the mult- in the later case (Park et al., 2016). actor and fast-evolving nature of many product markets and their supply chains. Considerable Remanufacturing is another concept with atenton to cross- and within-industry growing interest. It involves the disassembly of coordinaton and communicaton between product components and their remanufacture various, sometmes competng, actors, may be into modules or products with “as new” crucial to facilitate further development of this qualites. Potental barriers to remanufacturing promising area. are the public percepton of the goods as

• second hand, regulatons that inhibit re-entry of Many of the novel approaches to material forSummary Policy-Makers material once classifed as waste into the supply efciency discussed in this secton could be chain, as well as market access restrictons 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 contractng with

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers outsource thechemical cleaningactvitesthat of management the include may “and extended chemical cleaning services forchemical cleaningservices anAustrian coated – rather than the chemicals themselves. themselves. chemicals the than rather – coated andofcesupplies clubs, buildingservices of leasingmodels can beseen incar-sharing ongoing contract placesagreater incentve on market conditons dueto theirhighupfront manufacturer ofcar parts,Automobiltechnik an Austrian manufacturer ofmetal-cleaning a company for theprovision The ofaservice. machines, andSAFECHEM, asubsidiaryofthe number ofpiecescleaned, orarea ofproducts stability ofthecontract enabledthecontractors These partners were contracted to provide The responsibility ofthe producer isthus scale aninterestng example ischemical leasing. were notwithinitscore competencies. The which would notnormallybechosenintypical to invest inhigh-quality cleaningequipment, the entre life-cycle” ofthechemical products that can be operated, maintained orreplaced the company to designandprovide products (UNIDO, 2013).Onesuchproject, reported by (UNIDO, 2013;WRAP, 2016a).At theindustrial in amore resource-efcient manner. Examples With chemical leasing theproducer sells the Blau. Themodelallowed thecustomer to Dow Chemical Company ofDüsseldorf, Germany. Erbel (2008), isacollaboraton between PERO, functons performed by thechemicals –suchas estmated that arrangements ofthiskindcan cost, butwhichyieldlonger-term returns. This compared to producton from extracted of bulkmetals hassignifcant energy benefts cent), andrates for precious metals suchas can beaccessedfrom waste streams, andthe gold, silver andplatnum are alsoquite high and aluminiumare already high(60to 90per pilot project was expected to begeneratng rate above 50percent and34elements are per cent, and90-97percent ofenergy used recycling can reduce 60-75percent, 84-88 raw material: steel, copper, andaluminium and cost oftechnologies are abarrier. Recycling reduce energy useby around 50percent and positve returns by itssecond year. Itis rates alsovary amongmaterials, largely driven reasons. For somecountries lackofaccessto such aslithium,gallium, germanium, indium some bulkmetals suchasiron, zinc,copper solvent use by 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 producton, respectvely for administratve, economic andtechnical below onepercent recycling. Specialtymetals by UNEP(2011c),lessthanone-third ofsome 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 proporton of UK waste that was small quanttes in individual products, which landflled in 2012 was 26 per cent.17 While are ofen 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 practces, the landfll tax is likely to have played that there is insufcient economic incentve a very signifcant role.

to collect, extract and recycle them. Increases Resource Efciency: Potental and Economic Implicatons in the recycling rates of such metals may be Zero Waste Europe reported two case facilitated if products were designed with a studies from diferent 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 domestc waste segregaton metals may become increasingly important as a for recycling now exceed 80 per cent. In both number of such metals are key consttuents of areas, residents segregate their recyclable low-carbon technologies such as solar PV cells, waste into multple streams. They are wind turbines and bateries. incentvized by “pay as you throw” systems, under which they are charged according to Incentves for resource efciency are also the weight of non-recyclable waste. Incentves important for waste management. For example, are also provided in both municipalites to in the 1990s the great majority of UK waste was encourage compostng. Transparency and sent to landflls, because this was the cheapest communicaton are also important to the mode of waste disposal, once the costs of success of the schemes. In Capannori residents collecton and infrastructure for recycling were were extensively consulted and provided with taken into account. In 1996 the UK introduced informaton prior to the introducton of the

• a landfll tax for non-inert waste at the rate of measures, and in Treviso an online database forSummary Policy-Makers 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 htps://www.gov.uk/government/uploads/system/uploads/atachment_data/fle/496508/Digest_waste_resource_2016_v2.pdf 17 htps://www.gov.uk/government/uploads/system/uploads/atachment_data/fle/487916/UK_Statstcs_on_Waste_statstcal_no- tce_15_12_2015_update_f2.pdf

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers current trends inlanddegradaton could result As noted inSecton2,contnuaton of degraded landthrough practces that retain restoraton ofdegraded agricultural land,and such resource efciency strategies could reduce soil nutrients, are important strategies towards whilst reducing resource andenvironmental the protecton ofcurrently stable ormildly impacts. UNEP(2014a)estmate that amixof improving theoverall productvity of agriculture in aconsiderable lossofarable landandneed for furthercropland expansion. Hence,the Land andsoils

ecological approaches, conservaton agriculture, organic agriculture, agroforestry andintegrated case be unafordable 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 anumberofintegrated 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 Conservaton Farming Unit, maize yields example, Alteri (2002) identfes a number of from felds 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-tll practces can help to protect • Grow plants by building soils, soil organic soils and reduce moisture loss. The benefts of

material and biotc actvity. reusing all available biomass may pay partcular Resource Efciency: Potental and Economic Implicatons • Minimize soil losses by protectng from dividends in integrated crop-livestock systems. direct solar radiaton, strong winds and In such systems manure from livestock may be erosive water fows. transferred to the soil to improve its fertlity, • Maximize diversity to increase resilience. and crop residues may provide additonal feed • Enhance biological interactons and for animals (FAO, 2011). synergies. Restoring degraded land can be capital- The specifcs of implementng these principles intensive, and this can consttute a barrier in vary in diferent 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 plantng of legumes among other crops can investments. However, many of the principles enhance nitrogen fxaton. Plantng trees described above do not necessarily require alongside crops can improve soil fertlity major capital investment. Nonetheless, they through nitrogen fxaton, by creatng more do require knowledge, in order to implement soil organic mater, and due to the fertlizing the right combinaton of measures given each

• efect of dung from animals that graze in the specifc context, to maximize synergies. Thus, forSummary Policy-Makers shade of the tree. In Zambia, 160,000 famers another important barrier is lack of informaton have planted nitrogen-fxing acacia trees among and educaton. As UNEP (2014a) notes, “there their crops. They shed their leaves during the is a large need to expand the outreach and early rainy season and remain dormant during extension educaton eforts to ensure that the crop-growing period. This means they do research results on improved management not compete for light, nutrients or water during practces are transferred and adopted rapidly the crop growing season. According to Zambia’s by farmers”.

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers 14 countries, aslocal meetng placeswhere efectve 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 landusewith landpotental through practces focus onimproving knowledge There are numerous environmental benefts This bothlimitstheneedfor restoraton The most cost-efectve strategy for sustainably sharing andcommunicaton between farmers. showed theimportance ofnetworking between Central America, theCampesinoa increasing producton isofen simplybeter (farmer to farmer) network isanotherexample interventons oflow capital intensity. For investments where they are likely to yieldthe intensifcaton andclimate change adaptaton In acomparison ofconventonal andorganic Numerous eforts to improve farming Boa andBentley (2009)estmate increases In many cases progress can bemadewith farming systems, Hülsbergen and Küstermann farmers receiving advicefrom plant clinics. In farmers for disseminatng knowledge (Majule, farmers can seekadvice from local experts. highest fnancialreturns (Herricket al.,2016). by minimizingdegradaton, andfocuses

et al.(2013)comparing 20UKfarms onfve of environmental criteria at thesametme as on theothers. Thestudy shows, frst ofall,that call for “added knowledge whichwillafect how conventonal systems. cropping andcrop rotaton can substantally on soiltypeandotherconditons (Seufert et challenge oforganic farming inthiscontext is achieving highfood productvity ispossible. a useful guideto improving performance; italso al., 2012).However, Ponisio et al.(2014)fnd and tght margins experienced by farmers mean measuring performance is possibleandmay be physical inputsare combined andmanaged”, or reduce theyieldgap between organic and shows that good performance across arange well onat least three criteria andmoderately tmes higherintheconventonal case. However, that diversifcaton techniques suchasmult- that yieldscan besignifcantly lower, depending that high-inputsystems are incentvized. A (2007) found theGHGemissionsto bethree indicators, andthree others were performing (a mixed farm) was performing well onall indicators: food producton intensity, carbon in shorthand“more knowledge perhectare”. in developed countries themarket pressures Buckwell et al.(2014)report onastudy by Elliot In theEUcontext, Buckwell et al.(2014)also footprint, nitrate lossesto water, ammonia losses to airandbiodiversity. Oneofthefarms Summary for Policy-Makers

Buckwell et al. (2014) describe this outcome as factors. However, a potental “win-win” is that “sustainable intensifcaton”. less resource-intensive diets would in many cases have signifcant health benefts to the Nutrient loss from soils can be mitgated by individuals concerned. In partcular, meat eforts to recapture nutrients from food chain consumpton in most industrialized natons 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 Efciency: Potental and Economic Implicatons efciency of phosphorus is 51 per cent across than the World Health Organizaton (WHO) all waste streams. BMUB (2012) reports that recommendaton (WHO, 2007); red meat the German government is examining potental consumpton 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 fermentaton 2015). residues. Signifcant dissipaton of phosphorus also occurs in industrial processes. In Japan The provision of nutritonal guidelines is a clear the quantty of phosphorus contained in way to address this issue. For example, the dephosphorizaton slag from steel making is ofcial Nordic nutritonal recommendatons comparable to its total imports of phosphate give strong guidance towards less meat- ore. Technologies are being proposed to recover intensive diets, citng environmental arguments phosphorus from this source, which could as well as health reasons (Fogelholm, 2013). create a signifcant new phosphorus stream There are examples of voluntary informaton- (UNEP, 2013c). raising schemes that aim to improve consumers’ understanding of healthy diets. One example is

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Health, climate and land pressure issues the “Livewell for Life” project (WWF and Friends forSummary Policy-Makers can all be ameliorated by reducing the over- of Europe, 2015). This makes suggestons for consumpton of meat, and excess calories diferent healthy diet combinatons, tailored more generally. Barriers to progress in this to the cooking cultures of three diferent 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 nutritonally benefcial, it is calculated low prices of meat available through mass that the proposed country-specifc “LiveWell producton; and general habits and cultural plates” if widely adopted would cut GHGs

Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Source: Gustavsson et al.(2011) iure : efciency opportunity. Figure 13shows the contnuously stocked withproducts that meet of scale and the“supermarketzaton” process, countries. Supplychainwaste isalsosignifcant quanttes offood lossesandwaste percapita, a system geared towards ensuringshelves are are highlevels ofconsumer waste (consumers at consumpton andpre-consumpton stages, potental for co-benefts ofimproved health nonetheless there seemsto bevery substantal There iscurrently very litleinformaton about what, ifany, impactsuchschemeshave had– where highlevels ofwaste are aby-product of throwing away unwanted food) inindustrialized in industrialized countries, dueto economies in diferent world regions. Itshows that there Reducton offood waste isalsoamajorresource from food supplychainsby 25percent by 2020. from more resource-efcient diets. basic food qualitystandards. high uniform cosmetc standards, aswell as Pe r capita food lossesandwaste, at consumpton andpre-consumpton stages, indiferent regions. 350 150 300 100 250 200 50 0 Europe America and Oceania North Per capita food lossesandwaste (kg/year) Industrialized Asia Sub-Saharan Africa causing cancellaton oforders afer crops have cosmetc specifcatons, market volatlity countries. Feedback (2015)reports on during thesameperiod,food packaging was and drinkby 3.7percent, andsupplychain retailers to reduce packaging andincrease the need to discard ediblefood dueto exactng reduced by 10percent, wasted householdfood The Courtauld Commitment, convened by WRAP shelf-life andfridge-life offoods. Itreports that suppliers designedto reduce waste. During standards. Supermarket retailers ofFrench wastage by 7.4percent (WRAP, 2016b). the efectveness ofsimplyrelaxing cosmetc in theUK,isanagreement amongretailers and Supply chainwaste alsooccurs indeveloping its second phase(2010-2012)itworked with factors drivingfood wastage intheKenyan for export products. Oneexample isgiven of hortcultural export sector, whichincludethe been grown, andthelackofdomestc markets North Africa, Central Asia West and South and Southeast Asia Producton to retailing Consumer atn merica Summary for Policy-Makers

beans typically require the beans to be of a combined measures provided savings of specifc length to ft 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). varietes and then “top and tail” them to the required length. Feedback (2015) report that this results in an average wastage of 30-40 per Water cent of the usable mass of beans. However, one

major customer was persuaded to change its There are examples of relatve and absolute Resource Efciency: Potental and Economic Implicatons buying policy and opt for just topped beans, decoupling of water use from GDP, partcularly enabling Kenyan exporters to reduce waste in countries and cites 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 stll, if cosmetc standards on other cent, while its water consumpton reduced products were also relaxed. by around 40 per cent. This was achieved at negligible cost, through cost-efectve measures Supply chain waste in developing countries can in water efciency and demand reducton also be caused by poor storage and processing (UNEP, 2014b). conditons. In such cases, signifcant resource efciency gains may be available with relatvely Around 70 per cent of water extracton is for simple measures. The Rathkerewwa Dessicated agriculture, hence more efcient irrigaton Coconut mill in Sri Lanka was assisted under techniques ofer major potental for water UNIDO’s RECP programme to identfy material saving. Frequently such techniques also ofer efciency measures. These included laying the co-beneft of increasing agricultural yields. rubber carpets on the foor of the loading bays Compared to traditonal food irrigaton,

•

to reduce the likelihood of damage to coconuts irrigaton techniques such as sprinklers or drip forSummary Policy-Makers during loading and unloading, which would irrigaton can reduce water consumpton and cause them to be thrown away; awareness increase yields, by applying the irrigaton more raising among employees to avoid waste at directly to where it is needed. Drip irrigaton the paring stage; reducton of wash water; and involves providing water through a system of re-using coconut shells to fre the boiler. These perforated pipes that are laid on or beneath measures enabled signifcant reductons of the ground. Water drips slowly through the biomass wastage, and also saved energy. The perforatons directly to the roots of the crop

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers Summary for Policy-Makers

(Rejwan, 2011). Dobbs et al. (2011) estmate diferentated tarifs are available, allowing that sprinklers can reduce water use by 15 per low users to beneft from a lower charge, with cent while increasing yields by 5 per cent to 20 extensive metering providing consumers with per cent, and drip irrigaton can reduce water use the informaton to monitor their consumpton. by 20 per cent to 60 per cent, while increasing Farmers beneft from a lower tarif for using yields by 15 per cent to 30 per cent. However, non-potable water for irrigaton. Incentves and this is dependent on soils, crop, climate and penaltes are also directed at the water supply

how the irrigaton system is implemented (van utlites, who are charged for avoidable losses. Resource Efciency: Potental and Economic Implicatons der Kooij et al., 2013). Sustaining drip irrigaton They are allowed to keep low water pressures systems is limited in many areas by salinizaton 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 innovatons in the area of irrigaton (Rejwan, 2011). In Israel, major constraints on water supply have encouraged a range of water-saving Signifcant barriers to the applicaton of innovatons. About 84 per cent of the country’s advanced irrigaton techniques include lack of domestc wastewater is reclaimed for irrigaton informaton 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 domestc 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 irrigaton in its agriculture sector, in the soil, thus allowing more precise irrigaton. combinaton 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 forSummary Policy-Makers water directly to the plant roots. The uptake water savings (UNEP, 2014a). “Smart irrigaton of water efciency measures across sectors is scheduling” aims to provide the specifc stmulated by a range of incentves as well as amount of required water at the specifc tme it penaltes targeted at diferent users. A water is required, to avoid over-irrigatng (McCready quota system for farmers places a strict limit on et al., 2009). Modern ICTs have also been consumpton of potable water, but also rewards used in Uganda to enable farmers to access under-consumpton. For domestc users, informaton on weather forecasts, improving

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers conservaton inurbanareas (Sharmaand groundwater. Thissimpletechnique can during therainy season.Thisimproves soil advanced technologies are notavailable, can new buildingdevelopments andrenovatons pipeline distributon system, are considered rain-fed areas are structures suchasfurrows, moisture, reduces soilerosion andreplenishes upslope areas (ActonAid,2011).Otherefectve showers andwater-saving sinks (Sharmaand soil moisture management techniques for felds can reduce thefow ofwater runof that reduce their water fow have been Vairavamoorthy, 2009).Fitngsonappliances Vairavamoorthy, 2009).Specifctechnologies the most efcient approaches to water vegetatve strips orbenchterraces (FAO, 2011). tming ofirrigaton andwater management to 15tmeswhere runofcan becaptured from tmes, andthebiomassyieldby asmuch10 in West Africa stone barriers builtalongside improve water efciency. ActonAidreport that (UNCTAD, 2011). implemented inAustralia incitessuchas include low-consumpton toilets, low-fow improve water retenton by thelandby 5to 10 Melbourne (UNEP, 2013a);inNew SouthWales, Even relatvely simpleinterventons, where Reducing water consumpton intoilets and bathrooms, andreducing leakages inthe 120 billioncubicmetres ofwater could besaved et al.(2015)estmate that in2012global estmates ranging from 5percent to 80per either lost inleaks ornotbilledto thecustomer cent ofsupply. Thevariaton dependsonthe 2016b). Dobbs et al.(2011)estmate that there due to lackofrevenue collecton, water utlites reducton inpotable water use(Burgin and must submita certfcate showing 40percent priority inmany areas. Water lossesdueto may have litleincentve oravailable capital per cent insomecountries (UNEP, 2014b).Also revenue water proportons can beashigh70 per cent ofwater produced inIndiancitesis management andoperatonal practces (UNEP, supply to commercial, residental andpublic to make tmely investments ininfrastructure (Dobbs et al.,2011). is signifcant potental to reduce water leakage (Agrawal, 2008),andUNEPestmates that non- Water issubsidized inmany countries. Kochhar Webb, 2011). Reducing leaks from water supplyisalsoa from municipalsources, calculatng that 100- for water. TheWorld Bankestmates that 40 leaks andunaccounted fows range widely, with has beenlinked to lackofrevenue collecton buildings. Persistence ofhighwater losses by 2030asaresult ofreducing leakages inthe level ofinfrastructure development, aswell as Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

water subsidies totalled $456 billion. This efectve, provide funds for re-investment and means that there is litle incentve to conserve maintain incentves for conservaton. water, and if the utlity is unable to capture sufcient 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 efciency of the system even worse, and began in 2003. The higher prices increased undermine its fnancial sustainability. Kochhar the income earned by the water utlity, which et al. (2015) note that whereas “getng then invested the additonal money into water

incentves right, notably by reforming water management. The higher prices also prompted • pricing, can help ratonalize water use, promote more water conservaton – extracton was forSummary Policy-Makers needed investment, and protect the poor”, reduced by 16 per cent and consumpton by 29 subsidies may in contrast be inequitable, as per cent between 2006 and 2008. Companies they disproportonally beneft upper-income were motvated to invest in water-saving and groups, who have beter 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 efciency of water use is that of cascading

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Resource Efciency: Potental and Economic Implicatons • 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–domestc wastewater a kindofcascading water usehasemerged, purposes, andisnow common inAustralia not allusesofwater willrequire awater quality uses ofwater. Thisprinciplesuggests that urbanizaton, efcient useandapplicaton safe for irrigatve uses(Reymond et al.,2009). set upalow-cost natural treatmen scale urbanfarmers. Aproject intervened to supplying industrial processes andfushing water insomeform (Maheshwari, 2006).In watering plants orfushingtoilets. More than without treatment for otheruses,suchas were source theprimary ofirrigaton for small- was fowing untreated through streams that that hasbeenusedfor washing –can bereused treat thewastewater sufciently to make it toilets (Weizsäcker et al.,2009).InAccra, Ghana, Ca Given thetrends ofpopulaton increase and (Burgin andWebb, 2011).Grey water –water in nutrients (FAO, 2011). irrigaton, asithastheadvantage ofbeingrich Harvested rainwater can beusedfor various If contaminants can beremoved to avoid for irrigatng landscapes, golf courses andcrops, half ofallhouseholdsinAustralia reuse grey health risks, wastewater can behighlysuited to lifornia inthemid-1990s,grey water was used t system to

efciency hasto beseeninthecontext ofthe can enable consumers to make sustainability- compettve market inwhichtypically onlyprice consumers, allofwhomare locked into ahighly over-fshed. Theproblem isaresult ofacomplex commercial fsheriesare eitherfullyfshedor of water-use efciency. complete hydrological cycle. Inthosepartsof consumers to drive theindustry inamore depleted at unsustainable rates. Asdiscussed are crucialstrategies. However water-use and standards, suchastheMarineStewardship are unsustainable (FAO, 2011;WWAP, 2015), responsibly caught from asustainable source maters. Onepossibleresponse to thisisshown signify tosignify consumers that theproduct was sub-basin level recharge strategies, including sustainable directon. watershed management, have to bemadepart fshermen to retailers, food companies and Council (MSC)label.Thislabelisintended to the world where withdrawals ofgroundwater (MSC, 2016).Informaton labelssuchasthis in theemergence ofqualityassurance labels in Secton2,themajorityofworld’s industries thisopensupt Rivers andoceansare alsosources of food system comprising multpleactors from led purchasing decisions.Inhighlycompettve bio mass, andinmany cases theseare being he possibilityfor

Summary for Policy-Makers

Enery Finnish municipalites have made substantal energy efciency 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 efciency performance codes and a central role in addressing climate change, as subsidies for measures to improve energy well as other environmental impacts associated efciency (UNEP, 2013a). Building efciencies 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 efciency performance Resource Efciency: Potental and Economic Implicatons importance of technological change in energy codes, implementaton of energy efciency systems to replace fossil fuel energy sources measures in public buildings and lightng, a with low-carbon alternatves. However, such house-auditng programme, and a green ofce scenarios also emphasize the importance alliance that works with commercial tenants of demand reducton (IEA, 2010, 2012a; (UNEP, 2013a). IPCC, 2014). Increasing resource efciency in the energy sector is a critcal strategy to The Four Centres building at Red Deer College, enable such necessary demand reductons Alberta, Canada shows the importance of design to be achieved without negatvely afectng and simulaton modelling in optmizing the human development and well-being. Such energy performance of buildings. The buildings consideratons provided the evidence base for are designed to optmize natural lightng, with the IRP’s 10 Key Messages on Climate Change sensors automatcally dimming electric lights to the COP21 climate summit in Paris (UNEP, when they are not required. Efcient ventlaton 2015a), which, as noted in Part One, stressed design is combined with heat exchange to the role of resource efciency in the cost- recapture heat from exhaust air, and the efectve 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 forSummary Policy-Makers emerged from the modelling carried out for this Building Council’s LEED certfcaton process, study, as reported at the beginning of Secton 3. and by computer modelling and simulaton, that helped to test the energy and cost savings of As shown in Figure 10, buildings account for alternatve strategies. The result was a building around 18 per cent of global GHG emissions that exceeds the minimum mandated efciency (IPCC, 2014). Investments in improving the standards by 61 per cent (Natonal Resources energy efciency of buildings are common. Canada, 2015).

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers project hasalsoprovided opportunitesfor local CO comfort ofhomesfor theresidents. Dueto its buildings, reducing billsandimproving the water heaters installed inlow-income housing efcient lightbulbs, insulated ceilingsandsolar in CapeTown, SouthAfrica, hasseenenergy- growth. Asan example, theKuyasa project of rapid urbanizaton andurbanpopulaton infrastructure, butinthiscase inacontext needs for employment housing, andpublic constructon sector are alsocrucialto address Global South,improvements in thebuildingand in developed country cites.Incountries ofthe emissions, can reach low-income households lower energy consumpton andlower carbon for local authority-led sustainable with housing, UNEP, 2017)show ways inwhichprogrammes detail intheScientfc Assessment Report – Ljubljana, Slovenia (both discussedingreater in Boston andthePublicHousingFundin citzens. TheResidental Energy Programme health andwell-being ofvulnerable, low-income efciencies isinmany cases to improve the important objectve for improving building In additonto reducing emissions, an 18 clean development mechanism(CDM mechanisms/clean_development_mechanism/items/2718.php certfed emissionreducton (CER)credits, whichcould becounted towards meetng Kyoto targets. See:htp://unfccc.int/kyoto_protocol/ emission reducton commitments to transfer investment to emissionreducton projects indeveloping countries. Theprojects create A mechanismestablished withintheKyoto Protocol oftheUNFramework Conventon on Climate Change, to facilitate countries with 2 savings, theproject qualifesunderthe

18 ). The 2013a). employment andskillsdevelopment (UNEP, technologies that can reduce electricity undertaking investments incomputer-controlled target year (Kimura, 2012). Somecitesare ranged from 16percent to 80percent inthe improvements indiferent product groups have Top Runnerstandard, ofen inexcess. Efciency targeted product group hasmet therequired performance andencouraging innovaton –each been successful indrivingupenergy efciency 12 years of thisprogramme confrmed ithad standard inafuture year. Areview ofthefrst as aguidefor setng therequired average highest-performing energy-efcient 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 Directves has energy-efciency labelling.Theefect ofthe This hasbeenaddressed withintheEUwith available to customers, andtheircost-sensitvity. consumer energy useisthelackofinformaton A barrierto increasing theefciency of Summary for Policy-Makers

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

Transport accounts for around 14 per cent of populaton density; diversity of uses (such as Resource Efciency: Potental and Economic Implicatons global GHG emissions (IPCC, 2014). There is mixed residental/commercial); distance to public considerable potental to reduce transport transit; design to support multple modes of demand through design and planning of travel, including pedestrian, bicycle, automobile transportaton infrastructures. For example, and public transit; and access to destnatons, Vauban, Germany, is an eco-city development with focus on job locatons. 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 mult-modal transport), to enable sustainable transport, with a tram access to destnatons, having a short distance line connectng 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 fve Ds in stop. The layout of the district has also been a developing world setng. An important factor designed to actvely encourage walking and was the decision of the municipality to undertake cycling and discourage car use. This is achieved its transportaton planning alongside its broader

• by reducing the number of streets through development plan, and to give the resultng forSummary Policy-Makers which cars can pass contnuously through the Integrated Mobility Plan a tme 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 transportaton as complementary to each other,

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers urban distances. Apioneeringexample ofthis spontaneous accessto bicycles to cover short such schemesisto provide cheap,quickand Though taking diferent forms, theessenceof in anumberofcitesvarious countries. sharing scheme,whichhasnow beendeveloped example ofthisistheconcept ofthebicycle- transport innovatons are stll possible.An the 5Dsextensively. Nonetheless, low-energy infrastructure, itcan bedifcultto implement In large citeswithextensive existng urban and Bhakuni, 2014). alongside thebusrapid transit corridors (Swamy pedestrian andbicycle laneswere alsoincluded mass transit systems at hubpoints. Dedicated with local publictransit systems connectng to two important sectors: steel-making andmining. of increased efciency potental are given for 20 percent from today’s level. Here, examples could reduce industry energy consumpton by implementaton ofbest-available technologies industries. According to IEA (2012a),the by country, by industry, andby process within major energy-using industries, butthey difer for increased resource efciency inmany There are considerable untapped opportunites subscripton (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 initatve inParis. Itcomprises a Summary for Policy-Makers Resource Efciency: Potental and Economic Implicatons

The steel industry accounts for around 6 per to be reused at various stages in the process. cent of global fnal energy consumpton. The Other measures within diferent phases of the energy efciency of steel producton 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 efciency 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, recuperatve burners, and rate of efciency improvements fell to 0.5 to 1 controlled oxygen levels”) can reduce direct per cent. McKinsey’s base case assumpton is energy use by 88 per cent and electricity by 5 • that efciency will improve at the rate of 0.7 per per cent. Pulverized coal injecton, top pressure forSummary Policy-Makers cent per year between 2010 and 2030, mainly recovery turbines and blast furnace control driven by a shif 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 preheatng can reduce Opportunites for increased efciency include electricity consumpton by 76 per cent (Dobbs cogeneraton, and the recapture of waste heat, et al., 2011).

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers about thefuture ofspecifcoperatons. material prices,whichcreates uncertainty be deterred by volatlity inbothenergy and also require capital investment, whichcan appropriate engineeringresources. They informaton failures andlackofaccessto in heavy industry include,insomeregions, technologies andbest practce techniques Barriers to implementng suchnew current energy consumpton levels. a total reducton ofover 50percent from saving of409trillionBtu peryear, providing improved technologies would deliver afurther cent. Targeted investment inR&D to develop Btu peryear, areducton ofaround 20per demand from theindustry by 258trillion adopton ofbest practces would reduce energy industry. Asshown inFigure 14,thewidespread by BCS(2007)inrelaton to theUSmining for energy saving inheavy industry isgiven Another optmistc account of the potental

by equipment typeintheUS iure : Source: BCS(2007),p.23,Exhibit18 mining industry. Energy consumpton andsaving potental

Summary for Policy-Makers

Systems tinkin and It is also important to consider resources from nexus issues a supply chain perspectve, using life-cycle analysis. This, for example, afects the perceived resource efciency of service-based economies, The best practces explored above have much of whose resource footprint is felt in been categorized according to the four critcal other countries. It can also afect the perceived resources – materials, land and soils, water benefts of resource substtutons. For example, and energy. However, it is also important to

bioenergy products can substtute for fossil fuels Resource Efciency: Potental and Economic Implicatons consider resource and resource efciency in energy demand – however the full life-cycle challenges in terms of overlapping and impacts of both optons need to be compared, in interdependent systems. terms of land use, processing and transportaton emissions, before it can be clearly established Energy systems are highly interconnected, which has the lowest impact. with demand changes or fuel substtuton in one sector having impacts on another. All of these issues present considerable Food systems are complex webs of interactng complexites for policy-makers. For purely actors in which powerful mult-natonal practcal reasons, diferent ministries typically companies have signifcant infuence. take responsibility for each of the resources Cites are themselves systems of major and systems described in this report. This is importance through which all of the major understandable and largely benefcial as it resources fow. allows policy-makers to achieve tractable and demonstrable progress on partcular issues. The overlaps and synergies between However, it is also highly desirable that resources, or “nexus” interactons, create policy-makers should atempt to balance a

• important efects and are potentally valuable resource- or sector-focused approach with forSummary Policy-Makers sources of win-win opportunites. For a more cross-sectoral, cross-resource and example, water-stressed areas may resort to full supply chain perspectve. This is both to energy-intensive water producton measures such avoid undesired consequences of individual as desalinaton – therefore water-saving measures policy actons going unnotced, and to would save both water and energy. Increased maintain awareness of the potental for win- efciency in food producton and consumpton win opportunites if sectors or resources are can save land, water and energy. considered in a more holistc way.

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers 4. Conclusions of resource efciency efciency arisesfrom thepressures that consumpton, are putngonnatural resources global community to achieve theSDGsand and theenvironment. Thesepressures amount populaton andeconomic growth, combined The imperatve for increased resource with current paterns ofproducton and the Paris Agreement climate targets, thereby to threats which,ifnotaddressed, could make it impossible,ormuchmore expensive, for the beter future for all. hindering sustainable development anda eimperate andopportunity entail anincrease inthetechnical efciency of material andenergy input. driven increases intheresource efciency with and anincrease inresource productvity, orthe and energy inputsinto useful outputs,a averted asfar aspossible,inter aliaby a resource efciency arisefrom itspotental reducton inassociated environmental impacts, The opportunitesofered by increased systematc efort by policy-makers to achieve These threats needto beaddressed and with whicheconomic processes turnmaterial which theireconomies operate. Thiswould value that economic processes addto eachunit both incremental aswell aslarger innovaton- Summary for Policy-Makers

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

higher levels of resource efciency unaided. of biodiversity. Moreover, resource efciency Resource Efciency: Potental and Economic Implicatons The studies that show higher growth and provides opportunites for improving the social employment from greater resource efciency allocaton of resources. Reducing the stress suggest that this is driven by a number of on the quantty and quality of resources will mechanisms. These include higher rates of enable the disadvantaged and the poor to innovaton and technical change than markets access more easily the resources that they need. alone can achieve. They involve policy-led higher The resource efciency agenda is therefore investments in resource-efcient infrastructure also one that ofers the potental to reduce and products, intelligent and targeted regulaton, inequalites and poverty in all countries through as well as environmental tax and other fscal 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 efciency increasing the economic return to resource- can therefore deliver multple benefts across efcient 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 efect, whereby increased economic actvity arising from increased est practces for increasin

• resource efciency reduces the benefts from resource efciency forSummary Policy-Makers lower resource use and polluton that would otherwise have been achieved. For detailed There are no magic bullets to increase resource analysis and guidance on policy optons to efciency. The necessary measures – technical, support improvements in resource efciency, 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 Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers expanding rapidly butlacktheresources to efciency are notpossible.Thismay alsobean efcient practces. emerge through theoperaton of market forces concerted actonfor rates ofresource efciency collaboraton withpolicy-makers, must take of resource efciency solutons,showing availability, someinvestments inresource addressed inanumberofways: by providing make strategic resource-efcient interventons, alone. Were thisnotthecase, muchgreater are highlighted here. resources, economic sectors andprocesses – resources can beachieved. Themeasures difer resource efciency with volatle pricesrequiring shortpayback which itisbased,hasprovided many examples tmes, orfor otheractors withlimited capital to increase. For thisto happen,there must ere isteissueofsort-term ersus ere are sinicant arriers to increases in issue withdeveloping economies, whichare in detail –dealingasthey dowithdiferent for example inurbanareas. Thisissuecan be but somecommon messages emerge, which how greater efciency inthemanagement of be strong new incentves for more resource- be thenorm.Diferent economic actors, in levels ofresource efciency would already lon-term returns For frmsinindustries Suchincreases willnot “patent” capital“patent” ordevelopment fundingthat encourage actors to pay for labourto save on economic incentve to usethemefciently; by overcome thisbarrier:by pricingexternalites; costs can make itcheaperto waste materials of between low material costs andhighlabour on labour. cites to make long-term resource-efcient outlook onfuture policytrajectories across and maintaining orrestoring landquality, and materials, rather thanpay for materials to save not ongeneratng quickreturns from high uncertainty; or by creatng otherincentves to using dynamictaxes to bufer pricefuctuatons, support to enabledeveloping countries and sectors, to helpbusinessesmake or justfy long- are notalays linked wastage. There are numerous possibleways to than invest inthelabourrequired to avoid such thereby reducing volatlity andfuture term investments; andby providing fnancial noin processes ofuraniaton must increase pricesofmaterials andthereby the infrastructure planningdecisions. in price-volatle sectors, orproviding aclear inputs; by ofering supportfor businesses focuses onimproving long-term productvity by introducing resource extracton taxes to Resource efciency andeconomic efciency ecome more resource-efcient For example, thetrade- Resource Summary for Policy-Makers

efciency needs to be a guiding principle for fows. This could include revisitng defnitons the towns and cites springing up and being and provisions for waste management, and extended in many countries around the world. removing counter-productve subsidies. This applies to buildings, transport systems The issue of possible “losers” from resource and infrastructure to enable the coordinated efciency needs to be addressed. In some management of materials, water and energy, industries reduced material extracton will making full use of modern informaton and translate into reduced revenues and job losses. communicaton technologies. Public as well as In this context it is important that transitonal Resource Efciency: Potental and Economic Implicatons private investment in such infrastructure may issues are properly addressed and appropriate be required. compensaton for “losers” considered. However, it should be noted that resource efciency has rane of issues must e addressed around the potental to create jobs in other areas, so loistcs and supply cains. The reuse and that rather than resist resource efciency or recycling of resources require used materials support resource-inefcient actvites, which to fow in the opposite directon 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 efcient sectors and actvites. logistcs of material and product supply and return. Synergies and benefts can occur from considering these areas in an integrated way, for example through industrial symbiosis.

Reulatons tat discourae resource efciency

•

sould e caned For example, rules set up forSummary Policy-Makers to manage a linear material management chain may prevent materials classifed as waste from re-entering the supply chain. This suggests that regulatons that govern materials, water and energy fows, while contnuing to safeguard human health and the environment, should be revised to enable more circular resource

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Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers establishing acommon view ofthefuture efcient initatves, andfrom theinteractons energy efcient. There may alsobecomplexites consumpton-producton basis,withtheinsights other environmental impactsofresource- A monitoring process to assesstheresource as materials, water, landandcarbon, could and businessesto prioritze resource efciency. approach needsto assessresource useand against suchsituatons, awhole-system and unintended consequences, interms of necessary. use andresource efciency ofcountries, with used to inform andamendpolicywhere set oftargets covering key resources such specifc resource efciency target, orasmall To someextent thissituaton willbeimproved resource efciency proress toards temmonitored resource efciency sould eadopted and would give agreater incentve to policy-makers the impactsofproducts onalife-cycle and ere may elimitsto someaspectsof if itisrealized that resource efciency isin However, itshouldalsoberecognized that a fact essental to theatainment oftheSDGs. between government, industry andsociety. be efectve indrivingperformance, and between diferent resources. To guard be points afer whichrecycling isnolonger atonal andinternatonal tarets for Inpartcular, there may This

emerin anddeelopin natons to adopt a emissions reducton inteParis reement of te Ss of teSs areement te to led tat aspiratons common ies practcal epression to tespiritand a higherprofle andleadto greater ambitonto regular intervals, could give resource efciency deelopment to teenet ofallumankind support learninandcapacity uildintat sustainale deelopment no andinte and cooperaton at allleels inolin mutual a process ofcontnuous ecane partnersip acton inteseandoterindustrialied and apressin need for furterconcerted an increase inloalresource efciency more resource-efcient andsustainale pat of placed to take aleadinrole indemonstratn ranks amontetop prioritesfor enalin ealtiest and most dynamic economies t economies dynamic most and ealtiest at ispossileinsomeofteorlds te sametmetere isotsinicant room te Ssandaspiratons for e loalcommunity can supporttis trou e ne lliancefor Resource Efciency ien its links to teaainment of increase it,inthesameway ascurrently occurs for GDPgrowth. harmonized metrics andresults publishedat future is aelcome initate itnatons ell

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73 Resource Efciency: Potental and Economic Implicatons • Summary for Policy-Makers Summary forSummary Policy-Makers

Despite enormous progress in the past assess and artculate the prospects and decades towards improving human prosperity solutons for resource efciency. It considers and well-being, this has come at the lastng how more efcient use of resources can cost of degradaton of the natural environment contribute to economic growth, employment and depleton of natural resources. Meetng and development, at the same tme as reducing the needs of a growing and increasingly afuent the world’s use of materials, energy, biomass and populaton, will require natural resource water, and the resultng environmental impacts. extracton to increase from 85 to 186 billion tonnes by 2050. This can cause irreversible The report documents many examples of environmental damage and endanger the best practces for increasing the resource capacity of Earth to contnue to provide efciency of diferent sectors from countries resources which are essental for human around the world. The challenge for policy- survival and development. makers is to learn from and scale up these good practces, and to conceive and implement Analysis in the report shows that policies a set of transformatve policies that will and initatves to improve resource efciency enable countries to reap the associated and tackle climate change can reduce global social, environmental and economic benefts. resource extracton by up to 28 per cent while Ambitous acton to use resources in a more also boostng the value of world economic efcient and sustainable manner can help actvity by 1 per cent in 2050, against the place the world on the right track to meet baseline. Such policy actons can also cut global its commitments under the 2030 Agenda on greenhouse gas emissions by around 60 per cent Sustainable Development and the Paris Climate in 2050 relatve to 2015 levels. Change Agreement, and thereby to realise a more equitable and sustainable future. This report has been produced by the UNEP’s Internatonal Resource Panel in response or more informaton contact: to a request by leaders of the G7 natons in the Internatonal Resource Panel Secretariat context of eforts to promote resource efciency United Natons Environment Programme Division of Technology, Industry and Economics, as a core element of sustainable development. Email: [email protected] The report conducts a rigorous survey to Web: www.unep.org/resourcepanel