ROSS GITTINS. World growth a toxic danger for the environment. (SMH 27.10.2018)
October 31, 2018
_If the worlds population keeps growing, and the poor worlds living standards keep catching up with the rich worlds, how on earth will the environment cope with the huge increase in extraction, processing and disposal of material resources?
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Its a question many people wonder and worry about without much sign its even crossed the mind of the worlds governments.
Until now. The Organisation for Economic Co-operation and Development is about topublisha_Global Material Resources Outlook_, which uses much fancy modelling to make an educated guess about whats likely to happen in the future.
The report projects that, over the 50 years to 2060, annual global use of materials including metals, fossil fuels, biomass (food and fibres) and non-metallic minerals (mainly sand, gravel, limestone and other building materials) will more than double, from 79 gigatonnes in 2011 to 167 Gt in 2060. Gosh.
So how did the report reach that figure? It started by estimating the likely growth in the worlds population. Although its rate of growth is expected to slow, the world population could increase from 7 billion to 10 billion by 2060.
At the same time, material living standards in the developing countries are expected to continue converging on those of the developed countries.
Gross domestic product_per person_is expected to continue growing at a much faster rate in the poorer countries than the rich ones. So much so that, by 2060, the global_level_of real GDP per person is expected to have reached where it was for just the (richer) OECD countries in 2011.
This implies a tripling in_global_income per person to about $US40,000 a year after adjusting for PPP, purchasing-power parity, to allow for one US dollar buying a lot more in a poor country than it does Stateside. The fastest catch-up will be in China and, to a lesser extent, India and south-east Asia.
Thats good news for the worlds non-rich. It would be a bit rich for the well-off countries to expect the poor countries to stay poor just to reduce pressure on the natural environment in a way were not prepared to.
Multiply world population by world income per person and you get world GDP. Its expected to quadruple.
Even so, its rate of growth may slow. Whereas at the turn of the century world GDP was growing at an average rate of about 3.5 per cent a year, its expected to stabilise at a rate of less than 2.5 per cent well before we reach 2060.
(Why? Partly because of arithmetic. Its much easier for a small number to grow by a high percentage than for a big number to. But also because, when youre way behind, its relatively easy to catch up with the worlds technological frontrunner, the US, by adopting its better existing technology. Once youve done the easy bits, however, it gets harder to grow as fast. China will account for much of the global slowing.)
But hang on. If world GDP is expected to quadruple, how come materials is expected only to double?
Its because other things helpful things will be going on at the same time. The first is that the world economy is dematerialising.
Machines and gadgets are getting smaller and using less metal, but more to the point is the servitisation of the world economy (theres a new ugly buzz word to add to your collection) the tendency for more of each dollar we spend to go on services rather than goods.
Services have lower materials intensity materials use per unit of output - than goods. The shift in the mix from goods to services is a function of economic development. When youre poor the main thing you want is more goods, but as you get richer theres a limit to how much you want to eat or wear and how many cars and TV sets you need. But theres no limit to how many things youd like to pay other people to do for you.
This shift is already well advanced in the rich countries, but the poor countries have a lot of infrastructure and housing to build (and a lot of cars and TV sets to buy) before they begin to approach material satiation.
The share of services in world GDP is projected to rise from 50 per cent to 54 per cent over the 50 years.
A second helpful factor is that technological advance should increase the efficiency with which materials are used. The two factors are projected to reduce the materials intensity of world GDP at the faster average rate of 1.3 per cent a year.
So, the report finds, were materials used to keep up with economic growth, annual use would increase by 283 Gt to 362 Gt. But the shift to services will reduce that increase by 111 Gt and technological advance will reduce it by 84 Gt, meaning materials use rises to just 167 Gt in 2060.
It would be a bit rich for the well-off countries to expect the poor countries to stay poor just to reduce pressure on the natural environment in a way were not prepared to.
Note, however, that this is growth in primary materials extraction, not secondary use of recycled materials, which the report says is likely to become more competitive and grow at the same rate. So increased recycling is another factor helping to explain the lesser growth in primary extraction.
With GDP growing faster than materials use, the report is expecting a partial decoupling of the two.
Of course, therell still be a big increase in pollution. Greenhouse gas emissions, but also acidification, freshwater aquatic ecotoxicity, terrestrial ecotoxicity, human toxicity via inhalation or the food chain, photochemical oxidation (smog), ozone layer depletion, and not forgetting increased land fill to dump the materials when were done with them.
Final point: this baseline scenario assumes no change in government policy. Thats the point: its intended to show the worlds governments how great is the need for them to make a policy response.
Such as? Id like to see a tax on materials use, with the proceeds used to reduce the tax on labour income. Similar to a price on carbon, this would do much to encourage recycling, repair and renovation, and economising in the use of materials.
Ross Gittins is the Heralds economics editor.

Ross Gittins
Ross Gittins is the Economics Editor of The Sydney Morning Herald.