Resource Efficiency III: The Quarry and the Factory

One of the more frustrating aspects of research is when the data will not conform to ones expectations. This article consumed much more of my time than I would have liked because I had wondered whether China and Australia’s opposite positions as importer and exporter of raw materials might be reflected in their policies towards resource use and efficiency.

Fortunately I can report that no such divergence exists. My findings suggest that China and Australia have adopted policies which conform broadly with those of the EU – whose Resource Efficiency Roadmap establishes a framework of structural and technological changes that might lead towards the ‘smart, sustainable and inclusive growth’ that it associates with sustainability. In a globalized world such policy convergence should not surprise us.

Australia: The Quarry

Although Australia is less an economy based on extraction than its national psyche suggests its economic performance since the global slowdown of 2008 has generally exceeded that of its OECD peers by virtue of continued Asian demand for its agricultural and mineral resources. Indeed, its great endowment of natural resources has positioned it at the forefront of providing fuel for the socio-metabolic transformation of the Asia-Pacific region in recent decades. But being “Asia’s quarry” has raised issues of resource dependence in an era of resource depletion and “peak minerals”.

I made enquiries with the Department of the Environment who I hoped might be able to provide a unifying theory to explain how the government’s seemingly discombobulated policies attended to its environmental objectives. However I learnt that there is no unifying theory – rather “the government is engaged in a range of activities that work in concert to provide for effective and equitable resource use”. These policies include a national waste policy, various measures which engage households, business and industry with increasing energy efficiency, and a commitment to international efforts to articulate post-2015 sustainable development goals. Yet I remain unsure how the current government’s controversial attempt to repeal the (two year old) carbon tax and its appointment of a noted climate skeptic to head an upcoming review of the renewable energy target is congruent with these initiatives.

And even if Australia’s policies are aimed at “effective and equitable resource use”, efficiency seems distant. The Material Footprint of Nations report about which I wrote last week calculated Australia’s material footprint to be a staggering 35 tonnes per person annually (ppa). The material footprint approach attributes resource flows, wherever they came from to the final point of consumption. Australia’s consumption was the largest of the 186 countries surveyed and considerably in excess of the EU-27 who consumed around 16T ppa and such countries as the US, Japan and UK 25 T ppa. Whatever its policies, Australia is certainly consuming resources in a manner befitting the title “quarry”.

China: The Factory

China’s drive towards resource productivity comes from a rather different perspective. As the ‘factory of the world’ (or at least the world’s largest trading nation) one of China’s principal concerns is resource security – it worries about its ability to continue to source the inputs at reasonable prices for its massive manufacturing sector and ongoing infrastructure projects. But the Chinese government understands that the last three decades of prodigious economic growth has come with excessive environmental costs. So at the same time as it tries to lift the half billion of its citizens that subsist on less than $2 a day out of poverty, it encounters protests about air pollution and food quality. So what is being done?

China’s 12^th five year plan (covering the period 2011-15) breaks with the earlier focus on headline GDP growth. It aims to rebalance the economy away from investment led growth towards a model based on domestic consumption that might more sustainably meet the rising expectations of 1.3 billion people. Accordingly, the 12^th five year plan has been (optimistically) dubbed ‘China’s green revolution’ and builds upon earlier legislation such as the Circular Economy Promotion Law and the Cleaner Production Promotion Law of 2006. It includes such binding goals as reducing CO2 intensity by 17%, reducing energy intensity by 16% and reducing water use per unit of value added by 30%. The 13^th five year plan is likely to significantly intensify these goals.

Between 1970 to 2008 China improved its material efficiency by 2% per annum compounded and efficiency is likely to continue to improve at the world’s factory. However China will likely continue to be the world’s greatest consumer of resources, even if as noted last week much of these resources are embodied in goods that it exports. The Dragon remains hungry.

Article image by Dave Lisle.