Manufacturing 7 Conclusions

This chapter provides an overview of a number of greening opportunities in the manufacturing industries, focusing in particular on sub-sectors that are main contributors to GHG emissions globally and that have high impact by virtue of their broader contribution to global resource use, associated environmental impacts, GDP and employment. It notes the growing importance of manufacturing to developing countries, responsible for 22 per cent of global GDP by 2009.

The analysis has shown challenges manufacturing faces, highlighting the costs and risks of inaction and an illustrative BAU scenario to 2050. In major economies, the external costs of air pollution–mainly in the form of health costs–could be well over 3 per cent of global GDP. The possible future scarcity of some natural resources, for example growing dependency on water, poses risks associated with operations, markets, finance, regulations and reputation. Reserves of easily accessible oil are being depleted. While global demand for metals such as copper and aluminium is increasing, high quality metal ores are gradually being depleted. Increasing resource scarcities put upward pressure on commodity prices and on the manufactured products for which they are used as inputs.

While progress is being made in responsible chemicals management, concerns persist about the lack of thorough evaluation of the effects on human health and environment of thousands of chemicals on the market. The case of three toxic metals–mercury, lead and cadmium–show the challenges that globalisation and trade brings; metal is often sourced in one region of the world, refined in a second, incorporated into products in a third, and disposed of in yet another region. These realities challenge large corporations and their supply chains to improve traceability and safe management practices globally. Recent industrial accidents provide stern reminders of the costs of unsafe practices in the management of hazardous substances.

Real opportunities for manufacturing lie in taking a life cycle approach to its logical consequences and pursing supply and demand side strategies to close the resource use cycle in manufacturing. Such strategies could enable even rapidly industrialising economies to decouple environmental damage from economic growth and improve their longer term competitiveness. At the industry level, the greening transformation involves a value chain that starts with the re-design of products, production systems and business models, and leads to extended producer responsibility in the form of take-back or reversed supplies, remanufacturing and

recycling on a scale not seen before. The case of metal stocks in our economies is illustrative. While only a few metals currently have an end-of-life recycling rate of above 50 per cent, many opportunities exist that can help to improve recycling rates and increase secondary production, which requires potentially only a fifth of the energy and causes up to 80 per cent fewer GHG emissions than primary production.

Investment strategies for greening manufacturing highlighted investment in cleaner technologies and innovation, associated benefits in efficient use of energy and water, investment in a transition towards green jobs and likely prospects for resource efficient growth in developing markets. Following years of automation and related cuts in manufacturing jobs, the greening of manufacturing will not generate jobs in all sectors. However, recycling and re-manufacturing have considerable potential to create jobs. There will also be more skilled jobs in energy-service companies, in repair and maintenance and in recycling scarce materials. Government training programmes to upgrade skills will be needed in virtually all countries, but the kinds of skills required will vary according to the level of development of the local industry.

Results of the simulations indicate that investing in greening the manufacturing industries will help reduce energy consumption and emissions, reduce the upward pressure on prices of fossil fuels and – through avoided energy costs – help boost productivity and profit whilst stimulating GDP and overall employment. From the sectors covered in this chapter, the chemical and plastics industry shows the greatest potential for energy savings. To track progress in how a green investment scenario evolves, governments need to begin to collect improved data on industrial resource efficiency.

Overall, there is abundant evidence that the global economy still has untapped opportunities to produce wealth using less material and energy resources.

It

is important to understand though that increasing resource efficiency is consistent with almost any definition of green, whereas cutting carbon or other GHG emissions per se may not be consistent with increased efficiency. An example of this is CCS technology, which is very energy intensive and resource inefficient. In sharp contrast, the wider implementation of comprehensive efficiency

incentives, recycling, and CHP, together

with closed-cycle manufacturing (repair, renovation, remanufacturing and recycling), will correspondingly increase resource efficiency. In many cases this could

281