Welcome to Canberra and the CSIRO Welcome to Canberra and the CSIRO Study tour: Economic Modelling for National Strategies for Sustainable Development Heinz Schandl | Senior Principal Scientist ECOSYSTEM SCIENCES/SOCIAL AND ECONOMIC SCIENCES PROGRAM
Why economic-environment modelling? • Sustainable resource use will be instrumental for Asia to ensure socio-economic development in a world in which resources are more constrained and the absorptive capacity of ecosystems is decreasing rapidly • Challenge for public policy to achieve a transition to a Green Economy enabled by resource efficiency and systems innovation • Change will not occur spontaneously but will require well • Change will not occur spontaneously but will require well designed policies • Sustainability is a policy domain characterised by complexity, contestation, uncertainty and ignorance • Data, indicators and modelling will establish a knowledge base for policy making 2 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Global challenges and opportunities • 3 billion additional middle class consumers by 2030 • 80% rise in steel and cement demand by 2030 • Price rises in food, energy, materials and water since 2000 • Cost of extraction of oil and metals doubling • Large spending on natural resource subsidies • Converging pressure points of supply security and climate change • Converging pressure points of supply security and climate change • $2.9 trillion of savings in 2030 through capturing the resource efficiency potential (3.7 trillion if carbon is priced at 30$ a tonne) • Large investment in resource systems needed to satisfy demand • Recycling potential for many metals underutilised • Prioritisation – housing, transport, energy and food deliver 75% of savings 3 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
A changing economic context 4 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Focus on the life-cycle of natural resources 5 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Rio+20: renewed global support for SDG’s • Poverty eradication, enabling sustainable patterns of consumption and production and managing the natural resource base of social and economic development are important goals for all nations. • International collaboration, knowledge exchange and improved forms of governance for successful implementation. • Triple dividend of increased standards of living, equitable participation in human development, based on a healthy participation in human development, based on a healthy environmental and resource base. • Inclusive green economy, sustainable production and consumption and sustainable use of natural resources • Green economy and SCP policies and policy instruments 6 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Herman Daly – economics in a full world • Allocation – the division of the resource flow among alternative product uses and producing sectors – through competitive markets • Distribution – the division of the resource flow, embodied in products and services, among different people – justice or fairness of distribution is a separate goal from efficiency and requires separate policy instruments separate policy instruments • Scale – the total volume of the resource flow, the matter-energy throughput taken from the environment as low-entropy resources and returned to the environment as high-entropy wastes. Scale is relative to environmental carrying capacity – but largely ignored in neo-classical economics 7 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Advances in human development in Asia • Large achievements have moved million of people out of poverty • Highly non-linear relationship of elopment Index (HDI) human development and natural resource use • Different costs of education, life expectancy and per-capita income expectancy and per-capita income Human Develo • 1970: Globally uniform high-human development has been restricted by natural resource availability • Today: Enough natural resources but inefficiently used and unevenly Material and Energy Use, Emissions distributed 8 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Absolute and relative decoupling – getting more from less 9 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Economic growth and natural resource use in Asia 10 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
38 billion tonnes of natural resources use in 2008 Domestic Material Consumption (DMC) � � � � waste equivalent 80,000 70 billion Asia-Pacific tonnes (2008) 70,000 Rest of World World 60,000 50,000 illion tonnes Asia-Pacific overtakes (2005) 40,000 Million 30,000 20,000 10,000 0 1970 1975 1980 1985 1990 1995 2000 2005 11 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Transition to new materials Increasing recycling and waste challenges 1970 40,000 6% Metal ores and industrial minerals 17% Fossil fuels 35,000 Construction minerals 54% Biomass 23% 30,000 lion tonnes 25,000 20,000 20,000 Million 2008 2008 15,000 9% 25% 15% 10,000 5,000 51% 0 1970 1975 1980 1985 1990 1995 2000 2005 12 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Growing trade dependency 1,200 Metal ores and industrial minerals 1,000 Fossil fuels Construction minerals Biomass 800 Million tonnes 600 400 Mil 200 0 -200 1970 1975 1980 1985 1990 1995 2000 2005 13 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Reducing material efficiency Asia-Pacific 3.5 becomes less efficient 3.0 Global material 2.5 efficiency declines 2.0 kg/US$ 1.5 Asia-Pacific 1.0 Rest of World World 0.5 0.0 1970 1975 1980 1985 1990 1995 2000 2005 14 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Differences between DMC and Material Footprint Australia Japan 60.0 30.0 50.0 25.0 Tonnes per capita Tonnes per capita 40.0 20.0 30.0 15.0 DMC DMC 20.0 MF 10.0 MF 10.0 5.0 0.0 0.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 Year Year Year China Landing point 20.0 25-30 tonnes per capita Tonnes per capita 15.0 2050 10.0 DMC 9 billion people MF 5.0 225 billion tonnes of natural resource use 0.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 4 times of today Year 15 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Future of material use, example of China Domestic Material Consumption (DMC) China 28.7 tonnes 50,000 per-capita DMC (1970- 40 billion tonnes 2008) 40,000 DMC (2009- 25.6 tonnes 2050) per-capita illion tonnes 30,000 18.2 tonnes Million per-capita per-capita 20,000 19.5 billion tonnes 10,000 - 1970 1980 1990 2000 2010 2020 2030 2040 2050 Assuming decadal GDP growth to decline to 3% per annum by 2050 5% per annum improvement in material intensity Medium population projection of 1.4 billion by 2050 Source: Schandl and West (2010), UNEP (2011), West and Schandl (2012) 16 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Incremental and transformative policies Policies aimed at transforming current systems Production Activity domains Private Consumption Green investment Construction/Housing Eco-labelling Cleaner production Transport/Mobility Service instead of Eco-efficiency Agriculture/Eating purchasing Extended producer Extended producer Manufacturing/Consumer Manufacturing/Consumer Buy responsibly Buy responsibly responsibility goods Government Utilities/Water and electricity Consumption Green infrastructure and Green procurement design Policies aimed at improving current behaviours within existing systems 17 | Opportunities through 3R’s and Resource Efficiency Measures | Heinz Schandl
Transformative policies • Green budget and tax reform – revenue neutrality • Pricing and capping the use of natural resources at source • Paying productivity gains in increased recreation time and not just by rising incomes – helps avoid rebound effect • Replacing subsides on resources • Investing in product service systems, eco industrial parks and eco- • Investing in product service systems, eco industrial parks and eco- cities, resource recycling and cascading 18 |
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