Figure 2: Global material extraction in billion tons, 1900–2005 (Krausmann et al., 2009). Industrial production drives most of the ores extraction, and significant parts of biomass and construction
1.3 Scope and definition 50 80 40 60 30
This chapter focuses on those manufacturing sub- sectors that are energy-intensive or heavy users of natural resources. It excludes power generation as well as food and refined petroleum products, which are dealt with in the chapters on agriculture and energy. The following manufacturing sub-sectors are given special attention in this chapter: 1
Construction minerals Ores and industrial minerals Fossil energy carriers Biomass Gross domestic product (GDP)
Figure 2: Global material extraction in billion tonnes, 1900-2005. Industrial production drives most of the ores extraction, and significant parts of biomass and
construction Source: Krausmann et al. (2009)
exports. In a front-page article entitled “The collapse of manufacturing”, The Economist (2009), noted the challenges governments face in dealing with the varied and constantly changing difficulties in the world’s manufacturing industries. Governments are often slow to design and amend manufacturing programmes.
If anything, the recent financial crisis highlighted a broader shift in the location of centres of manufacturing that supply global value chains. The contribution of manufacturing to developing world GDP increased to almost 22 per cent by 2009, compared with 18 per cent in 1990 (UNIDO 2010). Broadly defined, industry (excluding agriculture and services, but including manufacturing, extractive industries and construction) accounted for about 23 per cent of global employment, representing over 660 million jobs in 2009, and grown by more than 130 million since 1999 (ILO 2011). In manufacturing, the chemical, iron and steel, and paper and pulp industries generate the highest revenues. However, in terms of employment, the textile sector (highly important for Lesser Developed Countries (LDC) and developing countries) and the basic metals sector (highly important for transition and developed countries) are leading, each accounting for 20-25 per cent of global employment in manufacturing (ILO 2010).
250 0
■ Iron and steel (ISIC 241) Cement (ISIC 239) ■ Chemicals and chemical products (ISIC 20) ■ Pulp and paper (ISIC17) ■ Aluminum (ISIC 242) ■ Textile and leather (ISIC 13 + 15) ■ Electrical and electronic products (ISIC 26 + 27)
Throughout the analysis in the above subsectors, it should be noted that manufacturing is not a uniform sector and that geographic dispersion in its value chains is part of the complexity that the industry faces. Figure 1 illustrates where the products of some of the above-listed manufacturing industries go. The breakdown signals end products such as buildings, vehicles and consumer products that end-users are familiar with from their daily lives. It signals resource intensive consumption clusters related to housing and transport (cf the buildings and transport chapters). This is a reminder of insights from following a value-chain approach, considering green innovations upstream and downstream. Some would say the point of departure for green intervention needs to be design, since most of the business cost of production is determined during the initial design stage. A range of options, upstream and downstream, will be considered in this chapter.
In terms of CO2 emissions, the branches of manufacturing
covered in this chapter account for 22 per cent of global emissions. Emissions from the iron and steel, cement and chemical industries account for most of them, while industries such as textiles and leather can generate significant negative externalities if their effluents are not handled properly. The electrical and electronic goods industries have a crucial role in the global economy, with 18 million jobs (ILO 2007), and account for most of
1. The International Standard Industrial Classification of All Economic Activities (ISIC), Revision 4 (United Nations 2008) divides manufacturing into 24 divisions, which are in turn divided into numerous groups and classes. The activities discussed in this chapter include those found in all or parts of eight of the ISIC divisions. Among the manufacturing industries not discussed explicitly in this chapter are glass, ceramics, wood products and machinery. This chapter needs to be read in conjunction with the Energy, Buildings, Forests, Waste and Water chapters of the Green Economy Report.