Decoupling economic growth from exploitation of natural resources

by Adrian Braun

July 2019

The pursuit towards economic growth has prevailed long time ago. The idea is to increase productivity and business and society will benefit largely. However, a few other major discourses emerged rapidly in the past few years and decades, too. Notably, the discourse of sustainable development belongs to those. How could sustainable development work in line with continual economic growth on the markets? There are a myriad of answers and opinions towards this question.

One crucial factor is the extraction and consumption of natural resources, renewable and non-renewable. Fossil fuels, biomass, metal ores and minerals are primary raw materials that are essential for the global economy. Every industrial sector depends largely on them and even hardly any service sector cannot exist without the consumption of natural resources. By looking at the emerging markets with high growth rates, we perceive increasing percentages of resource usage. Imports of oil, gas and metals rise in these markets enormously. By considering that fossil fuels and metals are non-renewable, rising exploitation efforts decrease the overall level of sustainability. Future generations will not have the possibility to get access to the same amounts of natural resources as the present generation.

The solution is often wrapped up in a single word, “De-coupling”. But is that even possible? Is it possible to achieve economic growth without exploiting natural resources in the same way it has been done to this day? In local, regional cases in the framework of specific projects and initiatives it has worked, but how to manage de-coupling holistically for all markets and the entire globe? There is a lot of talk that it needs to be done, lot of theories and models from academia, NGO´s and corporations. However, the practical implementation is lacking still too largely. One step into the right direction is the stronger focus to move from a linear economy to circular economy. Re-usage and recycling of materials instead of exploiting the treasures of the nature continuously are the core principles behind this idea. Finland for example has developed its own roadmap towards circularity and several organizations (Business Finland, The Finnish Innovation Fund, multiple cities and municipalities), encourage innovators, scientists and businesses to develop novel solutions to decrease waste and being more resource-efficient.

Another concept that is controversially discussed is the post-growth (de-growth) economy. This requires an even more drastic shift in the mindsets of business and society than it is the case for circular economy. To achieve post-growth economy, many initiatives and steps would be needed, amongst others societal consensus. One idea is to share individual workloads between the employer and the own subsistence. It means people would partly work to produce their own food, for example with urban gardening. Of course this idea alone cannot be the solution and as said before, it is controversially discussed whether a post-growth economy could work and to what extent the lifestyles need to be changed.

One thing is nonetheless evident, the business as usual approach is misleading. Natural resources, such as, metals, oil and gas are finite and if we do not manage to utilize them more responsibly the future economies tend to serious crises and will be forced to a transition process no matter if there is societal will or not.

 

 


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