Smarter use of resources to add $2 trillion to global economy according to UN
Globally, more sustainable use of materials and energy would not only cover the cost of keeping global warming below 2°C, but also add an extra $2 trillion to the global economy by 2050 – according to the United Nations (UN).
The global population – which is set to grow by 28 per cent – is predicted to use 71 per cent more resources per capita by 2050; increasing demand for metals, biomass and minerals from 85 to 186 billion tonnes per year.
However, research released by International Resource Panel indicates that smarter and more efficient use of the world’s natural resources means the next generation will reap annual economic benefits of $2 trillion by 2050, while offsetting the costs of ambitious climate change action.
The report “Resource Efficiency: Potential and Economic Implications” commissioned in 2015 and released at the G20 meeting in Berlin on 16 March found 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 more efficient use of resources.
The report analysed four paths that countries could take over the next 30 years, ranging from a ‘business as usual’ approach to an approach where countries adopt both ambitious climate policies and improve resource efficiency.
Erik Solheim, Head of UN Environment, said: “This is an environmental win-win. 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 UN gave the example of a programme in the UK that, between 2005 and 2010, recycled or reused seven million tonnes of trash destined for the landfill; saving six million tonnes of carbon dioxide emissions in addition to almost 10 million tonnes of virgin materials and 10 million tonnes of water.
Furthermore, the programme increased business sales by £176 million, reduced business costs by £156 million and created 8,700 jobs.
The report also found that economic gains of resource efficiency will be unevenly distributed and slower resource extractions; reducing revenues and affecting jobs in certain industries, including mining and quarrying.
However, countries still stand to gain more by implementing compensation and transfer policies to ease the transition to more efficient practices, than by continuing to support inefficient activities, according to the report.
The analysis shows that, in addition to economic benefits, resource efficiency and climate action would reduce global resource use by around 28 per cent in 2050 compared to current trends.
For G7 countries, resource efficiency, coupled with ambitious climate action, would increase Gross Domestic Product by $600 billion in 2050 ($600 per person, or 1 per cent).
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