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Int Econ Econ Policy (2010) 7:227–244 DOI 10.1007/s10368-010-0170-z ORIGINAL PAPER International economics of resource productivity – Relevance, measurement, empirical trends, innovation, resource policies Raimund Bleischwitz Published online: 29 June 2010 # Springer-Verlag 2010 Abstract This paper undertakes a step to explaining the international economics of resource productivity. It argues that natural resources are back on the agenda for four reasons: the demand on world markets continues to increase, the environmental constraints to using resources are relevant throughout their whole life cycle, the access to critical metals could become a barrier to the low carbon economy, and uneven patterns of use will probably become a source of resource conflicts. Thus, the issue is also of relevance for the transition to a low carbon economy. ‚Material Flow Analysis’ is introduced as a tool to measure the use of natural resources within economies and internationally; such measurement methodology now is being harmonized under OECD auspices. For these reasons, the paper argues that resource productivity—that is the efficiency of using natural resources to produce goods and services in the economy—will become one of the key determinants of economic success and human well-being. An empirical chapter gives evidence on time series of resource productivity increases across a number of economies. Introducing the notion of ‘material flow innovation’, the paper also discusses the innovation dynamics and issues of competitiveness. However, as the paper concludes, market barriers make a case for effective resource policies that should provide incentives for knowledge generation and get the prices right. 1 Introduction Besides the major concern with climate change, it is increasingly evident that the natural resource base is one of the major issues of international environmental A previous version has been presented at the ‚Shanghai Forum 2010’, Subforum on the “Emerging Energy & Low Carbon Economy: the Engine for Asia Economic Transformation”, May 29 – 31, 2010. I wish to thank the participants as well as Meghan O’Brian for useful comments. R. Bleischwitz (*) Wuppertal Institute Co-Director, Research Group “Material Flows and Resource Management”, P.O. Box 100 480, 42004 Wuppertal, Germany e-mail: raimund.bleischwitz@wupperinst.org
228 R. Bleischwitz economics and policy. This paper argues that resource productivity – that is the efficiency of using natural resources to produce goods and services in the economy – will be one of the key determinants of economic success and human well-being in the upcoming years and decades. Deviating from ongoing political struggle about burden sharing and abatement costs, our paper underlines that international economic policy shall promote resource productivity as a source of future competitive advantage as well as a pillar for the transition to a low carbon economy. Using materials more efficiently will allow for grasping more opportunities to save energy along the whole value chain, to save material purchasing costs and to enhance competitiveness. Thus it is clear that a key abatement strategy such as energy efficiency will be enhanced by attempts to use materials more efficiently. In a broader context, moreover, fossil fuels are but one natural resource that is used in societies worldwide. All potential substitutes such as biofuels and renewable energies depend upon natural resources such as land, steel and platinum. Providing these natural resources in the most sustainable manner will thus become a key strategy for climate change abatement as well as for green growth. How industry and economies take up these challenges will become a major issue for economic research. Our paper starts with an overview of why caring for natural resources is relevant from a sustainability point of view that addresses the whole lifecycle-wide use of resources and thus goes beyond just the supply side. The methodology of material flows is introduced in chapter three. Chapter four compares the resource productivity rates and levels of different economies worldwide. Chapter five analyses the relationship between innovation and competitiveness, and chapter six outlines pillars for a sustainable resource policy. 2 Why caring about resources is relevant Caring about natural resources usually starts with addressing the scarcity of supply. Following findings of geological surveys, however, the Earth’s crust contains a resource base that is considered to be sufficient. Many basic materials such as iron ore, bauxite (used for aluminium production), magnesium, sand and gravel (essential for construction minerals) are almost abundantly available. From such a perspective, a general absolute scarcity can hardly be concluded. On the other hand there are strong reasons to analyse natural resources in a more comprehensive manner (MacLean et al. 2010), which in the end leads to fundamental concerns about their use due to: 1. Increasing demand on world markets 2. Environmental constraints 3. Resource constraints to the low carbon economy 4. Misallocation and uneven patterns of use. This paper will shortly discuss these issues before it moves on to analysing sustainable resource management. Our perspective follows the fundamental issues of substitutability, technological progress and long-term prosperity that have been the
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