The overuse and waste of valuable natural resources is threatening to produce a fresh economic crisis, the European Union's environment chief has warned.
Janez Potočnik, the EU commissioner for the environment, 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."
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, Potočnik warned.
He 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."
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.
Potočnik 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," Potočnik 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," Potočnik said.
"If we want things to stay the same, things will have to change." He added: "This will be an enormous pressure on resources, which we are already overusing."
Labour costs now make up a much smaller proportion of most manufacturers' overheads than the cost of raw materials and energy, according to Potočnik. 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.
China has about a third of global rare earth deposits in its territory, but it accounts for nearly all of the production because of its efforts in this key market. Recently, the Beijing government has made moves to reduce exports, in order to help its indigenous manufacturers, and this trend has worried western governments.
But these supply constraints are not yet fully priced in to world markets, and while the economic crisis continues the issue is likely to remain overshadowed – which could lay up future problems, according to the European commission.
"There are real problems with security of supply and this is not yet on the radar screen," Potočnik said.
Potočnik called for resource use to become a "mainstream" issue in economics. Recalling his own education as an economist, he noted: "I was taught that water was a free commodity, like air. We really do need to have the internalisation of these costs."
Comments
29 December 2011 10:47AM
How much contribution do we pay to the EU for this ?
29 December 2011 10:48AM
Thanks Janez, everything has its price, presumably freedom too.
29 December 2011 10:49AM
Absolutely, and even from a societal perspective, it makes me very sad how much overconsumption and wastage there is.
And if we keep buying stuff from China and not making that much ourselves... that will obviously not work for the economy- even with a financial service sector.
Back to household goods with 20 year life expectancies?
29 December 2011 10:51AM
Instead of shouting thier mouths off tell the chinese,and stop buying thier goods if they dont comply
29 December 2011 10:52AM
After four decades of sleep-walking the message still hasn’t gotten through
29 December 2011 10:52AM
About time this was highlighted......
If Ed Milliband is looking for a new path for economic development thats positive, its the one represented by this challenge to economic development.
The global macro-trends over the next 3-4 decades show energy supply outrsipping demand; food supply outstripping demand and the many of the key factors are interlinked, feeding back into each other.
So the issue is price and affordability- not just for economies and industry sectors but ultimately for individuals and particularly the poor. This is not just marginal; the efect is being felt in terms of energy and food prices now.
Its the price issue here that mainstream economics has not picked up on yet, despite the price issue being described by classical theory. The only reason seems to be perspective.
Which is exactly why it should be politically appealing: environmental sustainability also offers economic sustainability - of which one key element is affordability.
29 December 2011 10:53AM
He is correct but out by about 20 years in advance.
29 December 2011 10:54AM
How much contribution do we pay to the EU for this ?
And how much longer do we have to put up with inane, reactive statements? Mention the word "EU" and crawling out of the woodwork they come. A Polish commisioner talks sense and that's all you can say.
29 December 2011 10:55AM
"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,' "
A clear and self-evident truth.
Wait for the propaganda campaign from the right-wing press and thinktanks
denying that there is a serious problem to be solved.
We in Europe ignore this message at our peril - and have the strengths
to succeed in changing our economies and way of life - and still live well.
29 December 2011 10:55AM
I defer to Heinberg
29 December 2011 10:59AM
EU warns wasting environmental resources could spark new recession...
And?
Once again the Gruaniad misses the significance: nothing is this report on food production and phosphorus, proving once again that people starving out of the sight of tv cameras; or starvation becoming a key issue related initially to food price in future is of no interest to any of the mainstream press.
Just a hint. Food prices and Phosphorus prices in 2008
29 December 2011 11:00AM
A continued cycle of growth and consumption is unsustainable - how about a steady state economy?
29 December 2011 11:00AM
Whilst waste can't help, I'm still amazed by the lack of attention that is given to population as a cause for scarcity. I was absolutely shocked by the graph of population over the years in my son's Guinness Book of Records - this needs to be addressed properly and not simply dismissed as the 'rich countries opt-out'.
29 December 2011 11:01AM
How insightful. I'm so glad this highly paid unelected person has told us that businesses are more competitive when they are more efficient. Now he's pointed that out, I expect a revolution in the way European companies operate. Thank God for this organised top down technocratic leadership, so much more "efficient" than just letting companies do what they think is best.
Christ, how they got a whole article out of some grey man stating the obvious in order to appear useful is beyond me.
"Wasteful" is of course both a relative concept and a rather culturally loaded one. If I choose to have a lawn rather than a vegetable garden, people don't call me wasteful. If I have a vegetable garden and let the vegetables rot in the ground because I don't pick them, they call me a bit wasteful. But if I pick them, clean them, store them, and then eat a few and throw the rest out, they call me very wasteful, even though that is the only case where I have actually got any useful nutrients out of the land/sun/rain that year.
Of course the agricultural policies of the mighty technocratic EU are not wasteful at all...
29 December 2011 11:02AM
Too many Humans - too little planet. Limit to numbers of children produced needed now.
29 December 2011 11:07AM
"And if we keep buying stuff from China and not making that much ourselves... that will obviously not work for the economy- even with a financial service sector."
That's not really true.
There are many, many things the Chinese cannot design or make -
they just do not have the skills or knowledge.
Many goods exported from China are only assembled or have labour intensive
work done on them there.
Manufacturing is only one part of the production of goods and services
and its largely the "low value added" part that done in China.
And some of that is being withdrawn from China - at least by German
firms, because the Chinese cannot provide acceptable quality.
(e.g. decidedly low-tech Steiff teddy bears - now made in Germany, Portugal and Tunisia).
And, rather frightningly, - China is about the 80th exporter in the world on
an exports per head basis.
On the other hand it has a huge and expanding internal market to satisfy.
29 December 2011 11:10AM
"How much do we pay for this?" Brilliant question! Probably a good sight less than we pay for dishonest politicians like Cameron to tell us that everything's fine, burn petrol and throw away aluminium cos that's progress, and we only need to protect the City.
If it takes te EU to say the obvious about something this important, then thank god for the EU
29 December 2011 11:12AM
And does our government understand or do anything about this that makes it so much better than the EU? That is the point of a supranational body.
29 December 2011 11:12AM
Top Post - I was going to post something much less apposite and with much less clarity.
I'm not going to bother now!
29 December 2011 11:13AM
Pifle , poppycock, balderdash and grunk.
Euroclaptrap, innit, again !!!
Ja Ja !
29 December 2011 11:14AM
And do our businesses do what is required? Or are Brits better at minimising waste and abuse of resources? Short answer no. Mr Potochnik has just a weeny bit more sense than most Brits.
29 December 2011 11:14AM
He said "his department was scouring through existing regulations and proposed new ones in order to ensure that none would encourage resources to be used profligately".
Wow. Good to see this being taken so seriously by the bureaucrats.
Here's a thought: "Rare earth" immediately makes these materials seems precious - how about applying them to all our resources? Rare water. Rare fish. Rare cereal. Rare oil.
29 December 2011 11:15AM
If this statement - which is the blindingly obvious mixed with erronous conclusions - by an unelected unaccountable non-entity is the point of the EU then it clearly has no point.
29 December 2011 11:16AM
What happens when prices "spike"?
Twice recently in the Graun I've seen this new usage and I neither like it nor understand it. Stick to English please.
(I'm assuming you mean "rise".)
29 December 2011 11:17AM
It wouldn't have worth saying the rubbish that afinch does.
29 December 2011 11:19AM
Growth is the only way forward as far as our politicians are concerned. Snag is, as has been demonstrated, it does not work.
But a stable, equilibrium economy has much more of a future.
29 December 2011 11:19AM
Know how the systems works, see how the powers that be have created their own future, see how democracy and justice have been left at the way-side. Then stand up and tell them NO.
We dont need their 'notions' and 'manufactured problems', its not the 'runaway world' that has been suggested to you, its all a lie for power and profit.
Problem with todays big thinkers is that they 'think' that the system can be controlled if all the risk is catered for, if all the risk is spread across the economic spectrum then those at the top will suffer less losses and receive less harms, all this is done in the name of trust, trust funds, investment banks et al, anything that suggests future thinking, like hedge funds, futures markets, and 'sustainable business practices'. These practices are basically lies covered up in clever numbers, hence why they called it the craft many moons ago.
Its become clear to many many people that this illogical thinking has steered humanity up the wrong path, its in the wrong path because the thinking behind all these fantastic methods in systems theory is flawed , systems thinking resides in the space between 'Knowledge' and 'reasoning', it sets its goals way ahead in the future then reassess themselves using what they call 'reflexivity'.
This causes fundamental problems in the motion of society as it disregards balance and motion, what it tries to do is dictate the balance and predict the motion. This is where the inequality is produced.
A real future thinking society will not act in these ways, awareness of the structure and the motion of society will grow into something like that of the Pythagorean method seen in Alexandria 2500 years back, utilising four fundamental blocks, blocks or spheres the reside in both individual human beings and society as a whole, as mentioned above -
Knowledge - reasoning- balance -motion
Its both linear and cyclical, its reflexive, each section is in a constant relationship with each other section, one cant be had with out it affecting the other. When one of these spheres are bypassed as is today we see how society becomes turbulent, its complexity no longer offers variety but instead installs singular thinking, repressive actions and dark ages ensue.
That is all for now
29 December 2011 11:19AM
Labour costs now make up a much smaller proportion of most manufacturers' overheads than the cost of raw materials and energy, according to Potočnik
Right. So stop subsidising all forms of energy including nuclear, wind, solar and gas/ oil. Those subsidies are a tax on energy users that drive misallocation of resources.
29 December 2011 11:20AM
a self sustaining economy is the key... china recognise this hence the investment in domestic self sufficiency. the change needs to happen now over the next decade... but we know it will come too late unfortunately
29 December 2011 11:20AM
Note to M Potocnik.
The efficient use of resouces will be driven by the price mechanism - not by regulations which normally drive entiely unintended consequences, often the precise opposite of their intention.
29 December 2011 11:20AM
he could start with the monthly trek of eu apparatchiks from Brussels to Strasbourg and back again which is undertaken as a sop to french vanity
29 December 2011 11:23AM
Good and actual article..... It seems to me mankind starts to look forward coming cataclysms.....while this is happening at a subconscious level....I'm sure prices will rise to all the resources and basic food .... And it's not just a matter of economy or environment .... that the market responses to the possible social and environmental threats.....
Reasonable people think about conservation and resource saving ..... while some countries are parasitic on them .... sell them in huge scale, depriving them of their future generations ...... Meanwhile, profitable stocks of oil are limited in some countries.... WRA
29 December 2011 11:23AM
I think, put as simply as possible, that you miss my point.
29 December 2011 11:26AM
Hear, hear. The wasteful, backwards, greedy practices of the Tories and their banker/businessman puppeteers will do nothing but alienate the UK further and burn the planet even more. As undemocratic as it is, we NEED more technocrats; they, by definition, know what they're doing better than most others, especially Mr "I-went-to-Eton-so-I-must-be-worth-three-of-you" Cameron. If we let people with vested interests in widening the class divide even more and polluting the environment (and thereby screwing over our children) even more lead our countries, then OF COURSE the class divide will be widened and our children will be screwed over with a choking planet.
These problems can only be solved by people who know what they're doing. Tory methods just make stupid people feel clever while they toddle along leaving anguish in their wake. That's what got us into this mess; it's bloody well not going to get us out.
29 December 2011 11:26AM
Well the guy certainly has my vote.
Oh no...he doesn't need it.
29 December 2011 11:30AM
Economic growth is unsustainable. Capitalism cannot survive without growth. Ergo capitalism is unsustainable.
So why don't we act accordingly and start building a post-capitalist society? More leisure and creative time, less work and less consumption and waste. Seems a pretty good deal to me.
29 December 2011 11:30AM
It is not a problem in the developed world - the EU is actually contracting:
FERTILITY RATE
In Europe 2.1 children per woman is considered to be the population replacement level. These are national averages
Ireland: 1.99
France: 1.90
Norway: 1.81
Sweden 1.75
UK: 1.74
Netherlands: 1.73
Germany: 1.37
Italy: 1.33
Spain: 1.32
Greece: 1.29
29 December 2011 11:32AM
A lecture from the EU on waste. Brilliant. More please.
~
29 December 2011 11:35AM
Next week, an EU sermon on the importance of democracy...
29 December 2011 11:36AM
'These problems can only be solved by people who know what they're doing.'
Yeah, my Masters in environmental management with distinction might qualify me.
Unfortunately in reality no one gives a fuck if I can read or write and I think you will find that someone's mate with a media studies degree is making all the important decisions.
Personally, with all my academic knowledge, Mankind is doomed. The people that run things are so poorly informed and ignorant they can't make the decisions needed without the lobbyists telling them what they need to do.
Which will be the opposite of what is needed and protects their vested interests and future profits. Business first, planet second.
Does anyone think they would print £275bn to improve anything environment related? How about £500bn Euros? Not a snowball's in hell.
A bloke that can't find his arse with both hands, a GPS and a guide in the BOE and a PR consultant housing minister that has 'an interest' in housing, translated to selling off all social housing, giving public land to his property developer mates and making BTL landlords preferable to ownership.
People like that run things and is why we are all knackered.
29 December 2011 11:38AM
I'd have thought this is th eleast of the EU's problems.
A year from now it probably wo't exist.
Bad for them but good for us.
29 December 2011 11:41AM
That's the essential problem skills and knowledge can be bought and are highly portable. However that doesn't help most people in high-cost Western Economies, only the small number with those skills and knowledge.
29 December 2011 11:44AM
Perhaps he should direct has comments at China. After living here for the last six years the waste and inefficiency I have witnessed is truly breathtaking.
But if Beijing says they're doing something about it, who are we to doubt them?
In fact, better not doubt them or you might end up doing ten years!
29 December 2011 11:47AM
First, population growth.
Currently, 20 per cent of the world's richer citizens - generally in countries with low birth rates (see above) - consume 80 per cent of its resources; the US, with 5 per cent of the world's population, consumes 25 per cent of its energy resources. That's the problem.
Otherwise, the gent's argument is right. Whatever the global warming deniers say, we're the ones laying the planet to waste. Cutting down the rain forests in Amazonia, Indonesia and elsewhere, over-fishing the oceans and dumping our waste in them, hunting animal species to extinction in Africa and Asia (and that bit isn't about feeding the over-populating poor in those continents, either)...
We have to change our lifestyle or we and the planet won't survive.
But then, it's much more fun and so British to blame it all on the EU...
29 December 2011 11:53AM
Surely the point is that resource issues have caused the economic contraction which has already been in evidence for several years? Predominantly the peak of conventional oil c2006 evidenced by the combination of flatlining production, stuttering demand and yet obstinately high prices. The correlation between oil price and recession is very strong, although the causal link is more obscure.
Decades of casual profligacy and waste have created premature depletion of natural resources, overloading of the environments ability to absorb human waste (most dangerous being global warming) and a consumerist culture which is blase about the throw-away society which neoliberalism actually encourages.
Never too late to address this issue, but the problem is systemic and culturally endemic. It'll take more than the odd speech by a minor beaurocrat to address.
29 December 2011 11:53AM
And once the limits of efficiency savings and resource availability are reached where does growth come from?
The logical impossibility of infinite growth within a finite system (the Earth) is the real problem here.
29 December 2011 11:53AM
The environmental cause and efficiency go hand in hand, joined by sustainability. Only if more people realised this, and if only more people thought about the multiple implications of energy and resource wastage, and not just pin the environmental tag to it, even though alone it should be enough for action to be taken on the issue.
29 December 2011 11:55AM
Amazes me how such people get into positions of power.The optimal use of scarce resources is the foundation of all economics and can be found on the first page of most economics textbooks.
It doesn't need to become mainstream - it already is!
29 December 2011 11:58AM
Adkult 29 December 2011 10:54AM How much contribution do we pay to the EU for this ? And how much longer do we have to put up with inane, reactive statements? Mention the word "EU" and crawling out of the woodwork they come. A Polish commisioner talks sense and that's all you can say.
I know it's awful the way some folk react to cliche mongering EU officials. It is as if they believe that the EU is wasteful, corrupt and that its agricultural policies are malign. The EU is obviously an exemplar of frugality and the husbanding of scarce resources whose officials and politicians are models of self-denial. How dare anyone criticise it. My ass!
29 December 2011 11:58AM
I understood your point to be that our government (and by extension all governments) are doing nothing to address inefficient resource use and so you were glad that there was a supra-national body able to highlight and perhaps even address the problem.
My problems with specific area are;
(i) lack of democratic accountablity of the EU Commisioners specifically and the institution generally
(ii) the policy conclusion put forward - regulation - is entirely superfluous as the price mchanism will drive efficient use of scarce resources much more effectively.
My problem with the EU more widely is that legislation (which is what EU "Regulations" are) should sit with the UK Parliament.
If the UK Parliament and the EU are in agreeement then there is no need for the EU.
If the UK Parliament and the EU disgreee then te UK Parliament has precdence and so there is no need for the EU.
Conclusion - there is no need for the EU, all we need are a Free Trade Area and a "Shengen-lite" ageeement on travel.