A new United Nations backed report starkly warns the world is already in the grip of a resource crunch that is driving up costs for businesses and fuelling price volatility for key commodities.
The major new UN-backed report reveals how globally metal prices have climbed 176 per cent since 2000, rubber prices have increased 350 per cent and energy prices have risen 260 per cent.
The report from the United Nations Environment Program (UNEP) supported International Resource Panel (IRP), argues these rising prices “signal a potentially crippling trend of increasing costs as current consumption patterns rapidly deplete the world’s non-renewable resources”.
In addition, the report titled Decoupling 2: Technologies, Opportunities and Policy Options, warns that as well as pushing up prices in the long term, resource constraints are leading to short term price volatility for key commodities.
Most notably, food prices have seen a three-fold increase in volatility between 2000 and 2012 compared to the period between 1990 and 1999, the report said.
UN Under-Secretary-General and UNEP Executive Director Achim Steiner said urgent action was needed to tackle a problem that was likely to intensify in the coming years.
“The worldwide use of natural resources has accelerated-annual material extraction grew by a factor of eight through the 20th century-causing severe environmental damage and depletion of natural resources,” he said in a statement.
“Yet this dangerous explosion in demand is set to accelerate as a result of population growth and rising incomes.”
The report argues that while resource constraints pose a major challenge to the global economy, well established business models and technologies have shown that it is possible to deliver drastic improvements in resource efficiency the deliver net financial savings for businesses.
It details how most production and utility systems can improve efficiency by between 50 and 80 per cent by switching to best in class technologies, while 60 to 80 per cent improvements in energy and water efficiency are commercially viable in sectors such as construction, agriculture, hospitality, industry and transport.
The report highlights a number of case studies where sectors have slashed operating costs by enhancing energy efficiency, such as the Rathkerewwa Desiccated Coconut Industry in Sri Lanka where an investment of less than $5000 in basic efficiency measures resulted in annual financial savings of around $300,000 as water and energy use was slashed.
In the same way, it reveals how plans to switch traffic lights to energy efficient LEDs in Cape Town is expected to save US$2.9m and 39,000 tonnes of carbon emissions.
The report calculates that adopting so-called “decoupling technologies” in developing countries could cut annual energy demand growth from 3.4 per cent to 1.4 per cent over the next 12 years, while still ensuring development goals are met.
“This would leave energy consumption some 22 per cent lower than it would otherwise have been, a reduction equivalent to the entire energy consumption of China today,” UNEP said.
“Dramatic improvements in resource productivity are a vital element of a transition to a Green Economy that will lift one billion people out of poverty and manage the natural resources required for the well-being of nine billion people by 2050,” said Mr Steiner.
“This requires an urgent rethink of current practices, backed by a massive investment in technological, financial and social innovation.”
“The report clearly demonstrates that business as usual is not an option. Rising commodity prices mark the end of an era of cheap and abundant resources,” said EU Commissioner for the Environment Janez Potoenik.
“On the contrary, the report gives many examples that show improving resource efficiency is a way out of the crisis.
“Resource efficiency provides innovation and market opportunities to business, allowing them to maintain competitiveness, enjoy sustainable profits and minimize the risks of resource scarcity and degradation,” Mr Potoenik said.
