Opinion - 19/June/2019

Aiming for systemic change

Transforming energy systems will not be enough to decarbonise our economies, argue Janez Potocnik, Co-Chair of the International Resource Panel and Partner at Systemiq, and colleague Julia Okatz. They call for the energy transition to be part of a wider shift to reduce the production of goods and consumption of all natural resources

Around 20% of greenhouse gas emissions are caused by the extraction and processing of metals and non-metallic minerals


The energy transition is still widely used as a synonym for the decarbonisation of economies. Transforming energy systems away from fossil fuels and towards renewables and energy efficiency is crucially important, but to avoid climate chaos, environmental trade-offs and promote truly future-fit innovations in technology and business models, we also need the transition to target a wider system-shift in the production and consumption of natural resources.

Natural resources have been at the heart of economic growth and wellbeing as we know it: fossil fuels (coal, gas and oil), metals (such as iron, aluminium and cooper), non-metallic minerals (including sand, gravel and limestone) and biomass (wood, crops, including food, fuel, feedstock and plant-based materials). The post-Second World War economic success stories of Europe, the US and Japan were driven by a stark increase in resource use, as are more recent growth stories, with China the most striking example.

Global Resource Outlook 2019, published by the UNEP International Resource Panel (IRP), reveals that the use of resources globally has more than tripled and almost doubled per capita in the last 50 years. The report also shows that this development has reached its limit as our resource use is causing dramatic impacts.

The extraction and processing of natural resources causes 90% of global land-use related biodiversity loss and water stress, and more than half of global climate change impacts. About 20% of greenhouse gas (GHG) emissions are caused by the extraction and processing of metals and non-metallic minerals. This means that even before we use products like our cars and houses, significant emissions have already been put into the atmosphere, contributing to the climate crisis.



Materials for energy production

The latest special report by the Intergovernmental Panel on Climate Change (IPCC) shows industry is the largest GHG emitter. Industry needs to reduce emissions by 75-90% below 2010 levels by 2050 for the world to have a chance of keeping global warming below 1.5°C above pre-industrial levels.

Material production (specifically steel, non-ferrous metals, chemicals and non-metallic minerals) plays a central role in this challenge being particularly energy and emissions intensive and tricky and costly to decarbonise through solutions such as electrification and energy efficiency. And supplying the rapidly growing global demand for electricity (due to population growth, income growth and enhanced electrification) implies massive resource needs. Solar panels and wind parks require significant amounts of metals and construction minerals and use large areas of land and sea surface.

The production of materials for energy provision will likely produce carbon dioxide and particulate matter, impact biodiversity systems and increase competition for land use. Some materials are already scarce in their availability, such as tellurium used in photovoltaic technology. Shifting to renewable energy technology is highly beneficial and must be rapidly scaled, but this cannot be the only solution pursued.

Innovative decarbonisation strategies

We need to urgently innovate decarbonisation strategies that are more effective, cost less and go beyond the usual focus on the production side of the economy. We need a systems-shift in production and consumption that reduces the need for energy-intensive production in the first place, while maintaining or increasing the quality of vital services, such as housing.

Materials management is a powerful, and potentially the key, tool in systemic decarbonisation efforts because materials extraction and processing are particularly emissions-intense and cause additional challenges such as air pollution.

The IRP and IPCC calculate that, under a business-as-usual scenario, the production of infrastructure materials will generate around 470 billion tonnes of CO2 emissions by 2050, using up our remaining carbon budget for a 1.5°C warming limit. Resource-smart city planning with the principle of “circular urban metabolism” can reduce material consumption massively, while increasing productivity and social inclusion.


Decoupled business models

Decoupling prosperity from resource use and environmental impacts must become our economic paradigm to secure a safe future for humans and redefine growth. The material lens is not only a mitigation tool, focused on becoming “less bad” or “less costly”, but a powerful approach to guiding systemic innovation for a new type of economic prosperity that overcomes our dependency on natural resource consumption.

Smart resource use in decoupled business models is a huge untapped field for innovation and can have positive effects on economic development and wellbeing. IRP modelling sees an increase of 8% in the global economy above a historical trends scenario until 2060 through efficiency measures in construction and manufacturing. Fully embracing the decoupling transition, by employing it as the general innovation principle across all sectors, could deliver far greater benefits.

The circular economy is a powerful concept in this transition. Targeted strategies in the use-phase have great GHG mitigation potential in high-emitting countries, as a report to be published by the IRP in December 2019 will show. For G7 countries, analyses show that socio-economic strategies for system change, such as car sharing, have higher climate action potential than traditional resource efficiency strategies focused on production, such as lighter materials or recycling (although these are also important).

This means that we need to develop specific resource-smart strategies for different sectors considering the production and use-phase of products and services and their respective importance in regional economic contexts.

In short, resource decoupling should become an explicit perspective in climate and industrial policies. It is time to step up and go to the next level, integrating the energy transition in the resource decoupling transition.

If you want to find out more about Global Resource Outlook 2019, you can contact Julia.okatz@systemiq.earth and Janez.potocnik@systemiq.earth

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