Towards a green economy

resources (in mass terms) than in economies with low growth rates (Bleischwitz 2010). Similarly, the energy- intensive industrial sectors are not equally affected. The cement industry drives large material flows, but of relatively non-scarce resources such as limestone and clay. Iron ore and bauxite are not particularly scarce, and near substitutes are available. The paper and pulp and the natural fibre-based textile industry use renewable resources where the challenge is to avoid using them beyond the maximum sustainable yield. The challenges for the electrical and electronic industry may be more fundamental. High grade (>1per cent) and easy-to- refine copper ores are becoming scarcer and low-grade ores need more energy in the extraction and refining stages. Rarer metals such as silver, indium and tellurium are mostly extracted from other metallurgical wastes.

One of the major effects of the globalised nature of the world economy is the increasing shift of the manufacturing base from developed to developing and transition economies. This means that associated environmental damages from local pollution are also

shifting. Accordingly, decoupling energy use and CO2 emissions from GDP growth needs to be considered in the international context, rather than in terms of individual countries (see OECD 2008a). The relationship between Global Competitiveness Index ratings, material productivity and the introduction of leading technology strategies have been highlighted in recent research by Bleischwitz et al. (2009, 2010). A correlation was performed between resource productivity, Domestic Material Consumption (DMC) and competitiveness data by the World Economic Forum. Covering 26 countries, it showed a positive relationship between the material productivity of economies (measured by GDP in purchasing power parity US$ per kg DMC) and their competitiveness index scores.

Improving the environmental efficiency of production at the global level can occur through technology and knowledge transfer from developed economies or through technology spillovers that occur as a result of international investment and globalised supply chains. With demand increasingly being driven from outside the advanced economies, these transfers and spillovers have dual benefits – not just reducing the extent of environmental damage exported from developed countries, but also helping developing economies shift to a more resource- efficient growth path (Everett et al. 2010).

3.2 Innovation in supply and demand

Making society more efficient with regard to the use of energy, water, land and other resources is a challenge that requires changes along the full chain of production and consumption. Authors such as Von Weizsäcker et

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2. “Factor X” relates to a factor 4 or 10 improvement in energy and resource efficiency. Achieving factor X would in some cases require the application of disruptive new technologies. In addition, the concept of “exergy” promoted by Ayres (2010) and others focuses specifically on “useful energy” (as opposed to static energy and mass) and efficiency as a ratio of useful output compared to resource input.

al. (1997, 2009) have suggested that one way to realise “Factor X”2

improvements in resource productivity would

be a radical change in end-use products, new ways of (e.g. shared) using products (e.g. sharing), and changes in consumption habits. This includes consideration of concepts such as “sufficiency” and asking critical questions about the function and service of proposed products.

It also requires a life cycle approach, which is what the WBCSD (DeSimone and Popoff 1997) has pursued in promoting the concept of eco-efficiency over the last decade. This concept focuses on those resource efficiency measures that also generate a positive rate of return to business on the required investments. Eco-efficiency provides a graphic tool for combining different measures, yet still has shortcomings in allowing quantification and comparison based on empirical indicators.

The guidelines behind eco-efficiency

include reducing the material and energy intensity of products, enhancing material recyclability, extending product durability and increasing the service intensity of products. Eco-efficiency in manufacturing can be measured through indicators related to resource- use intensity and environmental-impact intensity. Considering its application at national level, UNESCAP (2009) has defined the following as key indicators for manufacturing in the Asia Pacific Region:

Resource-use intensity:

Energy intensity [J/GDP] Water intensity [m3/GDP] Material intensity [DMI/GDP]

Environmental impact intensity:

CO2 intensity [t/GDP]

BOD intensity [t/GDP] Solid waste intensity [t/GDP]

Considering the full life-cycle and chain of supply and demand, Tukker and Tischner (2006) proposed a range of

step-change measures along a full production-

consumption chain, and speculated about their factor efficiency potential.

Importantly, this reflects a full

value-chain perspective, one that reflects product and service combinations as well as producer and user or consumer challenges. The entry point in this chapter is the upstream side and base industries such as steel and iron, cement, chemicals, paper and pulp and aluminum – industries that supply primary materials for the manufacturing of products such as cars, buildings and refrigerators that end-users know from daily life. Considering the full value chain can identify a range of areas for innovation and green investment, including product design and development (PD), material and