TRANSITION TO A NEW ECONOMIC MODEL WHY AND WHAT LJUBLJANA, MAY 8, 2016 Janez Potočnik Co-Chair UNEP International Resource Panel (IRP) SistemiQ

Transcription

1 TRANSITION TO A NEW ECONOMIC MODEL WHY AND WHAT LJUBLJANA, MAY 8, 2016 Janez Potočnik Co-Chair UNEP International Resource Panel (IRP) SistemiQ

2 WORLD IN WHICH WE LIVE

3 GLOBALISATION MULTIPOLARITY INCREASED POLITICAL RISKS PROPERTY DISTRIBUTION (OXFAM REPORT) PROXIMITY OF CRISES: INCREASED AWARENES FOR CHANGE

4 PLANETARY BOUNDARIES Source: Steffen et al. 2015

5 THE GLOBAL MATERIAL METABOLISM OF SOCIETIES , IN RELATION TO GDP GROWTH

6 RESOURCE USE AND ECONOMIC GROWTH

7 20 th CENTURY THE GREAT ACCELERATION GROWTH OF POPULATION BY A FACTOR 3.7 ANNUAL EXTRACTION OF CONSTRUCTION MATERIALS GREW BY A FACTOR OF 34, ORES AND MINERALS BY A FACTOR OF 27, FOSSIL FUELS BY A FACTOR OF 12, BIOMASS BY A FACTOR OF 3.6 TOTAL MATERIAL EXTRACTION GREW BY A FACTOR OF 8 GHG EMISSIONS GREW BY A FACTOR OF 13

8 MAIN PROBLEM (IN ONE SLIDE)

9 DEVELOPMENT TRAJECTORY Source: Global Footprint Network, 2012; UNDP, 2014a

10 FACTS WE TRY TO IGNORE POPULATION GROWTH ( BIL) PER CAPITA CONSUMPTION GROWTH LIMITED RESOURCES - FRESH WATER, OCEANS, LAND AND SOIL, CLEAN AIR, RAW MATERIALS, BIODIVERSITY, ECOSYSTEMS, FUEL TODAY 60% OF ECOSYSTEMS DEGRADED OR USED UNSUSTAINABLY

11 SUSTAINABLE, LOW-CARBON, CIRCULAR, GREEN, RESOURCE EFFICIENT, ENERGY EFFICIENT, DECOUPLING, BIOECONOMY, ECO-ECONOMY, BLUE WHAT WE ACTUALLY TALK ABOUT SUSTAINABILITY ECONOMIC, SOCIAL, ENVIRONMENTAL ECONOMY IS IN DENIAL OF PHYSICAL LAWS

12 LIVING WELL WITHIN ECOLOGICAL LIMITS ECONOMIC SYSTEM FUNCTION OF ECOSYSTEM Withdrawal s from the ecosystems Ecosystem services Policy ECOSYSTEMS SOCIO-TECHNICAL SYSTEMS providing social needs and value Energy Food system system system Industry Environmental externalities Values systemmobilitysystem system Science Technology Market Deposits Emissions Pollution

13 ECONOMIC ARGUMENTS FOR CHANGE (EU) RESOURCE INTENSIVE MODEL OF PRODUCTION AND LOCK-INS CHANGE OF RESOURCE PRICE TRENDS AND INCREASED PRICE VOLATILITY

14 A HUNDRED YEARS OF DECLINE OF RESOURCE PRICES

15 RESOURCE PRICES ON THE RISE DESPITE RECENT TRENDS

16 ECONOMIC ARGUMENTS FOR CHANGE (EU) RESOURCE INTENSIVE MODEL OF PRODUCTION AND LOCK-INS CHANGE OF RESOURCE PRICE TRENDS AND INCREASED PRICE VOLATILITY COST STRUCTURE OF MANUFACTURING SECTOR

17 Taxes other than on income 3% Interests 1% COST STRUCTURE IN THE MANUFACTURING INDUSTRY 2011 VDI GERMAN AGENCY FOR MATERIAL EFFICIENCY Trade goods 11% Contract work 2% Energy 2% Material 47% Others (Depreceation, Lease, etc) 16% Labour 18%

18 % SHARE OF TOTAL COST SHARE OF COSTS IN THE MANUFACTURING SECTOR VDI GERMAN AGENCY FOR MATERIAL EFFICIENCY Material Costs Labour Costs Energy Costs

19 ECONOMIC ARGUMENTS FOR CHANGE (EU) RESOURCE INTENSIVE MODEL OF PRODUCTION AND LOCK-INS CHANGE OF RESOURCE PRICE TRENDS AND INCREASED PRICE VOLATILITY COST STRUCTURE OF MANUFACTURING SECTOR IMPORT DEPENDENCY

20

21 EU - RAW MATERIAL IMPORTS AND EXPORTS EU-28 exports (2014) European Union (EU-28) Total trade EU-28 to ROW In 2004: 455 million tones In 2014: 640 million tones EU-28 imports (2014) Biomass 434 Manufactures (finished man. products) Fuels and mining products (fossil energy, metal ores and non-metallic minerals) Rest of the world (ROW) Total trade ROW to EU-28 In 2004: 1664 million tones In 2014: 1534 million tones Source:

22 FOR 54 SCARCE AND ECONOMICALY IMPORTANT RAW MATERIALS, EUROPE IN ITS ENTIRETY DEPENDS 90% ON RAW MATERIALS IMPORTED FROM OUTSIDE EUROPE (EUROPEAN COMMISSION, 2014)

23 AND SOLUTIONS

24 DECOUPLING GROWTH FROM RESOURCE USE AND ENVIRONMENTAL IMPACTS

25 TWO ASPECTS OF DECOUPLING RESOURCE DECOUPLING HAPPENS WHEN RESOURCE PRODUCTIVITY IS IMPROVED AT A RATE THAT IS FASTER THAT THE ECONOMIC GROWTH RATE (INCREASED ECONOMIC VALUE AND A GREATER LEVEL OF WELL-BEING CAN BE CREATED BY USING THE SAME AMOUNT OF, OR LESS, RESOURCES) IMPACT DECOUPLING REFERS TO ACHIEVING MORE WELL-BEING AND (IF NECESSARY) ECONOMIC GROWTH WITH FEWER NEGATIVE ENVIRONMENTAL IMPACTS, OR INDEED, EVEN RESTORATION OF ECO-SYSTEM SERVICES

26 TWO ASPECTS TO DECOUPLING GROWTH IN RESOURCE USE AND ENVIRONMENTAL IMPACTS

27 DECOUPLING 1 DECOUPLING REPORTS SHOW THAT ONLY RELATIVE DECOUPLING IS HAPPENING. BUT THE GLOBAL RESOURCE AND CLIMATE DILEMMA REQUESTS ABSOLUTE DECOUPLING. DECOUPLING 2

28 CIRCULAR ECONOMY

29 1 PRINCIPLE Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows PRINCIPLE 2 Optimise resource yields by circulating products, components and materials in use at the highest utility at all times in both technical and biological cycles 3 PRINCIPLE Foster system effectiveness by revealing and designing out negative externalities 1. Hunting and fishing 2. Can take both post-harvest and post-consumer waste as an input Source: Ellen MacArthur Foundation; McKinsey Center for Business and Environment; Stiftungsfonds Für Umweltökonomie und Nachhaltigkeit (SUN); Drawing from Braungart & McDonough Cradle to Cradle (C2C)

30 INTERNATIONAL DEVELOPMENTS

31

32 CARBON FREE ECONOMY/SOCIETY

33 NATURAL RESOURCE MANAGEMENT AND CLIMATE CHANGE POLICY ARE INTRINSICALLY LINKED

34 LOW CARBON RESOURCE EFFICIENT ECONOMY CLIMATE DECARBONISATION LAND WATER GHG MATERIALS DECOUPLING RESOURCES

35 * TO CONCLUDE

36 WE HAVE TO FIX A BROKEN COMPASS (PAVAN SUKHDEV) ECONOMIC TRANSITION NECESSARY AND UNAVOIDABLE SCIENCE

37 ALBERT EINSTEIN ABOUT OUR TIME... WE CAN NOT SOLVE OUR PROBLEMS WITH THE SAME THINKING WE USED WHEN WE HAVE CREATED THEM INSANITY DOING THE SAME THINGS OVER AND OVER AGAIN AND EXPECTING DIFFERENT RESULTS GIUSEPPE TOMASI DI LAMPEDUSA EVERYTHING HAS TO CHANGE TO REMAIN THE SAME

38 THE BIG DISRUPTION WORLD IS CHANGING IN FRONT OF OUR EYES AND WE SHOULD USE THE RIGHT OPTICS

39 LARGEST SHOP DOES NOT HAVE STORES (Aliababa) LARGEST TAXI COMPANY DOES NOT HAVE CARS (Uber) LARGEST LODGING PROVIDER DOES NOT HAVE ROOMS (AirBnb) LARGEST MOVIE HOUSE DOES NOT HAVE CINEMA (Netflix) LARGEST PHONE COMPANY DOES NOT OWN WIRE (Skype)

40 21 st CENTURY FROM FRAGILITY TO SUSTAINABILITY INCREASED RESPONSIBILTY

41 *THANK YOU