By Nick Hughes, on 10 October 2016
Addressing climate change requires strong measures to decarbonise the supply of energy. However, there are concerns that decarbonising energy supply simply drives up the cost of energy – and that this can have a chilling effect on high energy using sectors, such as manufacturing and industry. In this situation, it is sometimes suggested, carbon reductions are achieved, but only because industry packs up and moves its operations to other countries with lower energy costs, to continue to produce its emissions there.
However, in a recent report for the International Resource Panel (IRP), we suggest that resource efficiency can be a key strategy to enable greater carbon reductions; and that it can do so whilst compensating for any economic impacts of climate policies, and stimulating new activities in manufacturing and industry.
Resource efficiency is a measure of the effectiveness with which an economy, or sector of the economy, generates added value from the use of resources. Put simply, a resource efficient strategy amounts to getting more value out of the same, or less, resource input.
Resource efficiency has numerous benefits – reducing dependence on scarce or expensive materials, and reducing environmental impacts associated with the extraction, use and ultimate disposal of those materials.
No less importantly, resource efficiency can also offer greenhouse gas savings. Recycling of metals can save up to 90% of the energy compared to production from ores. Re-use and remanufacturing keeps materials in use, avoiding the energy costs of producing new or recycled material. Ecodesign and lightweighting enables products to be designed with less material, also avoiding the energy costs of material manufacture. And a more efficient food system reduces “farm-to-fork” food losses, giving greater food outputs for a given amount of farm activity, and associated greenhouse gas emissions.
There is also important potential for resource efficiency to provide economic benefits. A modelling study reported in our recent IRP report suggests that, whilst climate policies may cause some global reduction in economic output by 2050, implementing resource efficiency strategies at the same time more than offsets these carbon mitigation costs, yielding a net economic benefit compared to a business-as-usual trajectory.
Furthermore, for countries such as the UK, there is great potential to use resource efficiency strategies as a means to reinvigorate manufacturing and industry.
The contribution of manufacturing to the UK economy fell from 19% in 1990 to 9% by 2014, while the contribution of the finance and services sectors grew to 80%. The impacts of this economic restructuring have been uneven – regions of the country traditionally linked to manufacturing and industry still tend to be those that experience unemployment rates persistently higher than the UK average.
Building an industrial strategy around resource efficiency has the potential to reinvigorate industrial areas with new industries and related skills, built around concepts such as industrial symbiosis, remanufacturing, servicing and repair. These resource efficient activities have the potential to build on existing manufacturing and industrial skills bases, and create new skilled jobs in these sectors and regions of the country.
A rebalanced economy with less emphasis on finance and services, and more attention to resource efficient manufacturing and industry, has the potential to offer significant social benefits, by spreading the benefits of overall economic growth more widely – as well as delivering environmental benefits.
There does not need to be a choice between addressing climate change and allowing UK manufacturing and industry to thrive – a resource efficient industrial strategy would allow us to do both.
To mark Global Climate Change Week, UCL BSEER academics will be blogging on important issues from their areas. To start the week, UCL ISR Research Associate Dr Nick Hughes outlines how industry and manufacturing don’t have to suffer in our efforts to protect the environment from climate change.