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Sustainable Society Importance of Resource Management

JANEZ POTOČNIKCo-chair UNEP International Resource Panel (IRP)

Partner SYSTEMIQ

Brussels, 1stJuly 2020

• Population growth (2050 – 9.7 billion)• The world’s richest 1% have more than twice as much wealth as 6.9 billion people

and the 22 richest men have more wealth than all the 326 million women in Africa• We throw away one third of the food we produce• More than 50% of urban fabric expected to exist by 2050 still needs to be

constructed. 2011-13 China has used more cement than USA in 20th century• Climate change experts warned us that emissions need to be about halved by 2030

to limit warming to 1.5˚C• Biodiversity: Living Planet Index – 60% fall in just 40 years. Biomass of the mammals

living in the nature has been reduced in recent decades for 82%• Health: COVID-19 forced the world population and world economy in a lock-down • A million of plastic bottles are bought every minute (9% of plastic recycled, 12%

incinerated, 79% landfills). Drinking only bottled water one consumes 130,000 plastic particles per year from that source alone, compared to 4,000 from tap water

THE TASTE OF THE THE WORLD

For the first time in a human history we face the emergence of a single, tightly coupled human social-ecological system of planetary scope. We are more interconnected and interdependent than ever. Our individual and collective responsibility has enormously increased.

Safe Operating Space - "doughnut" perspective

Basis human needsincl. minimum requirements of resource supply

Outer limit by Planetary Boundaries

Adapted from Raworth 2017

From Raworth 2017

Empty World and Full World

Source: Club of Rome: Simplified after Herman Daly

Labour and Infrastructure limiting factors of human wellbeing

Natural resources and Environmental sinks limiting factors of human

wellbeing

Our Economy

Source: UN, 2018 Inclusive Wealth Report 2018 Inclusive Wealth (IW) Index (and its components) evolution - 1992 to 2014

IW – Inclusive WealthPC – Production capitalHC – Human capital NC – Natural capital

Growth of GDP in the past decades has been achieved at the cost of depleting natural

capital

Economic, social and environmental (in)balance

Natural capital not

valued

Human capital

undervalued

Production capital

overvalued

Producers/Consumers Rational Behaviour

Market Economy

LIVING WELL WITHIN ECOLOGICAL LIMITSECONOMIC SYSTEM FUNCTION OF ECOSYSTEM

Ecosystemservices

ECOSYSTEMS

Policy

Values

TechnologyScience

Market

Industry

SOCIO-TECHNICAL SYSTEMSproviding social needs and value

Environmental externalities

Withdrawals from the ecosystems

Deposits Emissions Pollution

system

system system

Foodsystem

Energysystem

Mobilitysystem

Environmental externalities

Profits privatized

Costs socialized

RESOURCE RELATED CHALLENGES

• Natural R es ources have been in the human his tory always clos ely related to s tability, conflicts , wars (land, water, oil, precious minerals …)

• According to the UN IR P , in the mid-term, except in s pecific cas es ,res ource s hortage will not be the core limiting factor of our (economic)development …

• But the environmental (climate change, biodivers ity los s , pollution …)and health cons equences caus ed by exces s ive and irres pons ible us eof res ources will be!

Resources:

Fossil fuels (coal, gas and oil)

Biomass (wood, crops, including food, fuel, feedstock and plant-based materials)

Metals (such as iron, aluminum and cooper…)

Non-metallic minerals (including sand, gravel and limestone)

Provide the foundation for the goods, services and infrastructure that make up our current socio-economic systems

Relentless demand: Global resource use, Material demand per capita and Material productivity

• Global resource use has more than tripled since 1970

• Global material demand per capita grew from 7.4 tons in 1970 to 12.2 tons per capita in 2017

• Material productivity started to decline around 2000 and has stagnated in the recent years

BiomassFossil fuelsMetalsNon-metallic minerals

Environmental impacts in the value chainresource extraction and processing phase

50% of global climate changeimpacts1/3 of air pollution health impacts

90% of global biodiversity loss and water stress

Decoupling concept

CIRCULAR ECONOMY WHERE TO (RE)FOCUS OUR ATTENTION

Circular Economy s hould be s een as an ins trument for deliver decoupling of economic growth from res ource us e and environmental impacts and as a part of the bigger picture of economic, s ocietal and cultural trans formation needed to deliver the S DGs .Green Deal is bas ed on Circular Economy.

Linear Economy is like a River Circular Economy is like a Lake

OUTLINE OF A CIRCULAR ECONOMY SYSTEM

Foster system effectiveness by revealing and designing out negative externalities

Optimise resource yields by circulating products, components and materials in use at the highest utility at all times in both technical and biological cycles

Principles

2

3

Preserve and enhance natural capital by controlling finite stocks and balancing renewable resource flows

1

Minimise systematic leakage and negative externalities

Refurbish/remanufacture

Reuse/redistribute

Share

Stock management

RestoreVirtualise

Technical materials

Maintain

Biochemical feedstock

Cascades

Extraction ofbiochemical feedstock

Soil restauration

Biogas

Farming/ collection

Renewables

Biological materials

Renewables flow management

BiosphereProduct manufacturer

Service provider

Parts manufacturer

Collection Collection

Substitute materials

Finite materials

Renewable materials

Consumer User

Recycle

Regenerate

Source: Ellen MacArthur Foundation; McKinsey Center for Business and EnvironmenStiftungsfonds für Umweltökonomie und Nachhaltigkeit;

LAND MATERIALSENERGYWATER

CARBON MANAGEMENT

DECOUPLING - CIRCULAR ECONOMY

SUPPLY SIDE SOLUTIONS

DEMAND SIDE SOLUTIONS

ECO-SYSTEM SERVICES, ENVIRONMENTAL SINKS

NATURE BASED SOLUTIONS

S TR UCTUR AL WAS TE IN A MOBILITY S YS TEM

A S HAR ED MOBILITY S CENAR IO IS A HIGHLY ATTR ACTIVE VIS ION FOR P AS S ENGER CAR S

CO2 impact of materialsMt CO2 per year, Europe

Total cost of ownershipEUR per 1000 pkm

Externalities and cost to societyEUR per 1000 pkm

264

68

Current Circular scenario,

2050

-74%

155

35

Current Circular scenario,

2050

-77%

Circular scenario,

2050

18

Other

Baseline scenario,

2050

Plastics

Aluminium

Steel

60

-70%

pkm = passenger kilometre

PRODUCER CONSUMER SOCIETY

Ownership and resource (under)utilisation - Producer Better Connecting Producer with his Product

PRODUCER CONSUMER PRODUCER

Production ConsumptionEnd of Use

Design, business models

Retaining the Value, Rethinking Ownership, aligning Incentives with Regulation

We do not need cars … We need mobilityWe do not need light bulbs … We need lightWe do not need chairs … We need to sitWe do not need refrigerators … We need chilled and healthy foodWe do not need CDs … We want to listen to the musicWe do not need pesticides … We want healthy plants

Dematerialisation, Rethinking Ownership, From Efficiency to Sufficiency

Ownership and product (under)utilisation - ConsumerIt is not not about owing it is about using

Ownership and product (under)utilisation - ConsumerIt is not not about owing it is about using

• Problem: Preferences from consumers to own products like houses, cars, refrigerators, cloth … are driving consumption in a massive lock-in in underutilization

• Solution: Explore the opportunity that the young generation has less ownership biased constraints and provide alternative options

Circular Economy Action Plan 2020Structural overview

• Designing sustainable products• Empowering consumers and public buyers • Circularity in production processes

Sustainable Product Policy

• Enhanced waste policy (waste prevention, circularity) • Enhancing circularity in a toxic-free environment • Creating EU market for secondary raw materials• Addressing waste exports from the EU

Less Waste, More Value

• Circularity as a prerequisite for climate neutrality• Getting the economics right• Driving the transition through research, innovation and digitalisation

Crosscutting Actions

Key Product Value Chains

• Electronics and ICT; Batteries and vehicles;• Packaging; Plastics; Textiles; • Construction and buildings; Food, water and nutrients

Align Montenegro accession efforts with EU - CEAP activities: • “The transition to the circular economy will be systemic, deep and transformative, in

the EU and beyond. Commission invites EU institutions and bodies to endorse this Action Plan and actively contribute to its implementation, and encourages Member States to adopt or update their national circular economy strategies, plans and measures in the light of its ambition.”

• “EC will reinforce the monitoring of national plans and measures to accelerate the transition to a circular economy as part of refocusing the European Semester”

Circular Economy Roadmap - the first step in CE journey • Understanding and embracing the CE concept• Providing the Government’s leadership and building the stakeholders ownership From Roadmap to Action Plan - from setting the direction to implementing it • Identifying the necessary measures and getting the commitments of ministries• Agreeing on the timeline of implementation

Montenegro going Circular

Inventing Tomorrow’s TourismCommissioner Breton - April 21st 2020

We have to reinvent and rethink a sustainable, digital and resilient European tourism sector.

Three components of such a strategy:Firstly, tourism must be at the heart of the EGD and promote sustainable tourism in the face of the "over-tourism" that can be observed in certain cities or regions. It will be a question of finding a balance between the preservation of tourist ecosystems and economic realities.Secondly, tourism will have to go digital and find a balance between the so-called traditional players and the major digital platforms.Finally, tourism must become strategic: because of its economic and social weight, and because it is based on a rich European history and priceless European cultural diversity, it must also protect itself. In particular, it must protect itself from aggressive investment strategies by non-European countries.

Circular Economy in Travel and Tourism

• Implementing the CE regenerative vision offers a pathway towards a resilient and sustainable,tourism ecosystem. Travel and tourism has an important role to play in the CE transition, asthe industry is deeply interlinked with and dependent on multiple key resource flows, assetand commodity value chains in society - agriculture and food, built environment andtransport industries to name a few. Travel and tourism can act as enablers of circularity andbenefit from shared circular value creation and value capture within relevant value chains.

• The report suggests CE transformation pathways applicable for key tourism industry sectors;accommodation, transport, activities, food and beverages, event organizers and distribution.Different organisation sectors and market contexts will generate different circulartransformations. In terms of key circular value creation levers, a key distinction can be madebetween ‘asset heavy’ and ‘asset light’ industry actors.

EUROPEAN GREEN DEAL ”A NEW GROWTH STRATEGY”

In her speech before the European Parliament in July 2019, Ursula von der Leyen identified six priorities for her new team:

New Commission Priorities

• A European Green Deal• An economy that works for people• A Europe fit for the digital age• Protecting our European way of life• A stronger Europe in the world• A new push for European democracy

• “This Communication is an initial roadmap of the key policies andmeasures needed to achieve the EGD. It will be updated as needs evolveand the policy responses are formulated. All EU actions and policies willhave to contribute to the EGD objectives.”

• “To deliver the EGD, there is a need to rethink policies for clean energysupply across the economy, industry, production and consumption, large-scale infrastructure, transport, food and agriculture, construction, taxationand social benefits.”

European Green DealWhen we say European Green Deal what do we mean?

European Green Deal

Farm to Fork Biodiversity Strategy

And many more documents existing and coming

Annual Sustainable Growth Strategy 2020Climate Pact

A New Industrial Strategy for EuropeCircular Economy Action Plan 2020

Shaping Europe’s Digital FutureWhite Paper on Artificial Intelligence

A European Strategy for Data

• It is “a new growth strategy that aims to transform the EU into a fair andprosperous society, with a modern, resource-efficient and competitiveeconomy where there are no net emissions of greenhouse gases in 2050and where economic growth is decoupled from resource use.”

• It also “aims to protect, conserve and enhance the EU's natural capital,and protect the health and well-being of citizens from environment-related risks and impacts. At the same time, this transition must be justand inclusive.”

• Is an “integral part of this EC’s strategy to implement the UN’s 2030Agenda and the SDGs”

European Green DealGeneral Orientation

EPC: A promising start and a long road ahead

European Commission needs, in the first place, an appreciation of the work done and a sincere help in

filling some of the gaps identified. Ambition is clear and convincing, implementation is uncertain

European Green DealSummary

We can hardly picture Europe as the center of the World, but we should do everything that Europe remains the

center of the dreams of all the people of the World

Europe is not only blue with yellow starts It is a rainbow

• blue for freedom and democracy• red for social values • green for the protection of environment• yellow for the culture

Importance of European Leadership

There has never been a better moment for

Europe to move form the history of “resource-driven imperialism” into an era of responsible use of natural

resources, mitigating its resource fragility and strengthening preparedness and resilience

This would also clearly position EGD and give it a real historic and strategic weight.

Knowing is not enough; we mus t apply. Willing is not enough; we mus t do.

Johann Wolfgang Goethe

imdb.com

TO CONCLUDE

Transition to a more sustainable economy and society

IS UNAVOIDABLE! Humans are supposed to be intelligent. It is high time to prove it.

We have to fix a broken compass!

Europe’s MomentRepair and Prepare for the next Generation

• Three crises world and EU are facing: The acute health and socio-economic crisis aseconomies have shut down, and a crisis with deeper roots – a chronic crisis of globalisationand economic transformation. The latter has been feeding climate change and incomeinequality and is rapidly leading to massive unemployment.

• Effects will be asymmetrical for countries and for economic sectors. Proposal is based on astrong solidarity to avoid the increase of dangerous extremism, questioning core EU values …and potentially even the future existence of the European Union.

• It is introducing a New 750 billion recovery instrument – Next Generation EU• EC will propose a number of new own resources and introduce a common EU debt• “EU’s recovery plan must guide and build a more sustainable, resilient and fairer Europe for

the next generation.” While the language is clear, delivery mechanisms are not - there is noEGD conditionality introduced for money spent, nor an explicit commitment that, for example,fossil fuels related investments should be excluded

COVID-19 – Basic Lessons

• The world: Many are saying that after Covid-19 will not be the same again.It will be the same. We will just better understand it. Very likely thefrequency and severity of health-related outbreaks, climate related extremeweather events … will in the future increase. We need to rethink the way weare managing the risks, as individuals and collectively, as private companiesand public policy makers, locally and globally – resilience and preparedness

• Precautionary principle is written in EU Treaties. Maybe trying to implementit in practice is not a bad idea. It can save our jobs … and lives.

EGD and the post-COVID Recovery Two Sides of the same Coin

1. The economic policy designed by the EGD and related documents is the mostconvincing competitiveness policy for the European Union

2. EGD already provides convincing answers to some COVID-19 related concernsin relation to reconsidering globalisation effects

3. Both EGD and post-COVID-19 call for an inter-generational solidarity andagreement

4. COVID-19 is providing the necessary missing urgency to the EGD and climaterelated financial efforts

5. Both COVID-19 and EGD related challenges require a new approach togovernance, in particular on the global level

It is the oldest concept on the earth. Nature is a “bio-economy” organized on the principles of the circular economy.

Nothing is lost and everything has its purpose. It make sense to embrace it and finally start to behave accordingly.

In essence there is only question we have to answer: Do we agree that we humans are part of the nature too?

Circular Economy is not a new concept

When as ked why he is s peaking about hims elf always in a third pers on he replied s omething like that: If one is s uch a genius like me, it is very important to es tablis h a healthy dis tance to hims elf.

HERCULE POIROT

To answer this question we probably do not need the help of the most famous Belgium detective, but his advice is always useful

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