Wed, Jan 04, 2012 - Page 9 News List

Wasting the globe’s environmental resources could spark new recession: EU

By Fiona Harvey  /  The Guardian

The overuse and waste of valuable natural resources is threatening to produce a fresh economic crisis, the EU’s environment chief has warned.

EU Commissioner for the Environment Janez Potocnik linked the current economic crisis gripping the eurozone with potential future crises driven by price spikes in key resources, including energy and raw materials.

“It’s very difficult to imagine [lifting Europe out of recession] without growth, and very difficult to imagine growth without competitiveness, and very difficult to be competitive without resource efficiency,” he said.

Unless consumers and businesses take action to use resources more efficiently — from energy and water to food and waste, and raw materials such as precious metals — then their increasing scarcity, rising prices and today’s wasteful methods of using them will drive up costs yet further and reduce Europe’s standard of living, Potocnik said.

“We have simply no choice. We have to use what we have more efficiently, or we will fail to compete. Resource efficiency is a real competitiveness issue for European companies,” he said.

Some European regulations will have to be altered in order to ensure the efficient use of energy, water and raw materials, and to protect the natural environment.

Potocnik gave notice that his department was scouring through existing regulations and proposed new ones in order to ensure that none would encourage resources to be used profligately, and to safeguard the EU’s natural resources for the future.

The stark warning highlighted the increasing scarcity and rising price of some key resources, including energy and water, but also food and raw materials from metals, ores and minerals.

Although most of the West is still mired in economic woes, much of the developing world including rapidly emerging economies such as China and India are forging ahead financially, and as a consequence are consuming a far greater share of the world’s resources.

The current economic models used by businesses and governments have failed so far to take this rapid change into account, and one of the associated problems is that many business models are predicated on cheap resources and an inefficient use of raw materials and energy.

“This is an issue of competitiveness,” Potocnik said. “China is understanding that this is a megatrend. We can’t ignore it.”

Resources are under increasing constraint, as developing countries lift more of their population out of poverty.

“If our current living standards are to be maintained, and the aspirations of developing countries satisfied, then the global economy will need to be changed drastically,” Potocnik said.

“If we want things to stay the same, things will have to change,” he said, adding: “This will be an enormous pressure on resources, which we are already overusing.”

Labor costs now make up a much smaller proportion of most manufacturers’ overheads than the cost of raw materials and energy, according to Potocnik. A greater proportion of those resources is also coming from overseas, with the attendant potential problems around security of supply.

“Europe is importing more than half its resource use in many areas,” he said.

Concerns have grown in recent months over the supply of some key resources, such as rare earths. These are used in many modern products, from mobile phones to renewable energy equipment, but the supply is small and China controls many of the sources.

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