Our International Resource Panel came up with a huge surprise ….
Specialty metals recycling rates are below 1%!! (Int. Resource Panel: Graedel et al, 2011)
Next question: Is the efficiency revolution coming from alone? Or do we need to intervene? And if so, in which way?
I fear almost nothing is moving in the right direction if all is left to the markets. But interventions should avoid being super-bureaucratic. Let prices steer the direction and let engineers do the details.
The nuclear lobby, of course, uses electricity cost as a scare-crow, or a devil. Source: fareus.de, # 1241865.jpg
Prices do matter. Here are collapsing prices (left) air traffic and corresponding explosion of air traffic (right)
Long term price elasticity of fuel consumption is very high! Source: Jesinghaus, in Weizsäcker & Jesinghaus, 1992
Ecotaxes can reverse the trend in transport emissions ICREASE IN GHG-EMISSIONS IN TRANSPORT (IN PERCENT) ICREASE IN GHG-EMISSIONS IN TRANSPORT (IN PERCENT) Changes to base year 1994 Reference: UNFCC 2005 Ecological Tax Reform Oil price shock 2001 Percent increase against 1994
For a bold strategy let us first try and understand the dynamics of the Industrial Revolution. Labour productivity rose twentyfold since 1850. And did so in parallel with wages!!
Labour productivity and wages rose in parallel. This is a fifty years time-window from the United States
Prices of industrial commodities & energy, in constant dollars Resource prices, conversely, were falling over 200 years, encouraging wasteful use of resources. 2000-2004
Therefore we shall need a political decision to artificially raise energy prices. And do that in parallel with documented efficiency increases, so that average expenses for energy services would remain stable. (Some low „life-line“ prices can be accepted for the poor.)
High energy prices need not hurt the economy. Japan blossomed during the 15 years of highest energy prices!
One lesson from this is: pioneers need not wait for the slow ones. I therefore suggest creating an alliance of the speedy ones, of the game winners.
Who would win, who would lose? (1. inside countries) Winning: high tech; crafts; science; education; green business; railroads; maintenance; culture; high quality. Losing: lorries, aircraft industry, heavy industry, urban sprawl, wasteful consumers.
Who would win, who would lose? (2. among countries) Winning: Europe, East Asia, developing countries poor in natural resources. That is some 90% of the world population! Losing: USA, Canada, Australia, Russia, commodity exporting developing countries.
Losers could be the red & orange countries, with high per capita CO 2 emissions. But it lies in their hands to change!
The focus of the alliance of winners should be on real climate policy; ecological price policies; developing the 21st century technologies & habits; good balance between states an markets!
All this, however, means to overcome the current Anglo-American cultural dominance. What do I mean by that? At the core it means overcoming the ‚religious‘ belief in markets.
Thomas Hobbes 1588-1679 Humans are selfish beasts. Hence an authoritarian state (Leviathan) must tame them. Adam Smith 1723-1790 Fortunately for our freedom, markets can do the taming. Herbert Spencer 1820 – 1903 The state should stay clear of supporting the weak. Evolution should weed them out. Three key figures forming the Anglo- American view of humans and society.
And for the modern world, Milton Friedman 1912-2006, Star of the Chicago School declared that markets are always more efficient than the state. (Other gurus included Friedrich von Hayek, Ronald Coase, Gary Becker.) Their ideas stood behind the whole wave of deregulation.
Let me conclude: Present life styles are unsustaiable. Factor 5 is needed and available in resurce efficiency. North-South „carbon justice“ is necessary. Prices should make the transition profitable. Create a alliance of the winners.