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World can earn $2 trillion more with smarter resource use

Mar 17, 2017

Smarter use of resources can add $2 trillion annually to global economy, says a new report by the International Resource Panel.

New Delhi: Improving resource efficiency is indispensable for meeting the costs of climate change targets, says a new research by the United Nation's International Resource Panel.

The report underlines that increased resource efficiency is practically attainable, and there are substantial areas of opportunity for enhanced resource efficiency.

Betting high on the smarter and more efficient use of the world’s natural resources, the report clarifies that resource efficiency can contribute to economic growth and job creation.

The report, Resource Efficiency: Potential and Economic Implications, released at the G20 meeting in Berlin, called for smarter use of the world’s natural resources as it could help the next generation to reap annual economic benefits of $2 trillion by 2050.

The report also revealed that while investment in ambitious climate action would cause a 3.7 per cent fall in per capita Gross World Product by 2050, this cost to the economy could be offset by efficient use of resources.

This economic benefit would be helpful in offsetting the costs of ambitious climate change action given that for G7 countries, resource efficiency, coupled with ambitious climate action, would increase GDP by $600 billion in 2050 ($600 per person, or 1 per cent).

With the world population set to grow by 28 per cent, it is predicted that the world will use 71 per cent more resources per capita by 2050. Without urgent steps to increase efficiency, the global use of metals, biomass, minerals such as sand, and other materials, is set to rise from 85 to 186 billion tonnes per year by 2050.

For example, between 2005 and 2010, a UK programme recycled or reused seven million tonnes of trash destined for the landfill. This move saved six million tonnes of carbon dioxide emissions, close to 10 million tonnes of virgin materials and 10 million tonnes of water. It also increased business sales by £176 million, reduced business costs by £156 million and created 8,700 jobs.

Globally, more sustainable use of materials and energy would not only cover the cost of keeping global warming below 2 degrees Celsius, but also add an extra $2 trillion to the global economy by 2050.

“This is an environmental win-win,” said Erik Solheim, Head of UN Environment. “By making better use of our planet's natural gifts, we will inject more money into the economy to create jobs and improve livelihoods. At the same time we will create the necessary funds to finance ambitious climate action.”

The report highlights four paths that countries could take over the next three decades, ranging from ‘business as usual’ to a scenario where countries adopt both ambitious climate policies and improve resource efficiency.

The report also found that economic gains of resource efficiency will be unevenly distributed. A slower resource extraction would reduce revenues and affect jobs in some industries, such as mining and quarrying.

In addition to economic benefits, the analysis also shows that resource efficiency and climate action would reduce global resource use by around 28 per cent in 2050 compared to current trends.

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