Saturday, September 19, 2009

Towards a more equitable resource-efficient economy?

In my home start of Massachusetts many residents have recently effectively blocked or seriously delayed the development of wind farms along the ridge lines in the western part of the stare and in the ocean waters in southeastern Massachusetts. In many instances, opposition to these renewable energy projects is primarily based on aesthetics -- people object to the way they look. Meanwhile we continue to import virtually all of the energy needed to drive our economy and power our laptops and high-definition televisions.

One wonders if our attitudes towards wind projects would change if we were directly taxed for the coal, oil and natural gas that we import from around the world? (GW)

World forum calls for natural resource tax

September 17, 2009

To combat soaring consumption of natural resources, the World Resources Forum (WRF) is calling for a global strategy to frame a new economic model that would directly tax raw materials instead of products and labour.


According to the World Resources Forum (WRF ), Europe is the world's most "eco-efficient" region in terms of material intensity, which is measured in economic output per unit of domestic natural resources extracted. Africa lies at the other end of the scale, producing the smallest economic output per domestic unit extracted.

However, WRF notes that "Europe's share in worldwide resource extraction is 1.5 times higher than the share of the African continent, and Europe is increasingly importing natural resources from other world regions".

While Europe's resource extraction has only grown by 3% since the 1980s, WRF shows that its raw materials are increasingly being substituted by imports from other parts of the world. Metal ores or biomass for biofuels are imported from Latin America, for example.

WRF's scenarios for future natural resource extraction show that "without additional policies to limit resource use, used domestic extraction within the EU remains roughly constant until 2020," but is accompanied by growing imports of material-intensive products.

This means that "the material requirements of the European economy will increasingly be met through imports from other world regions, causing shifts of environmental pressures related to material extraction and processing away from Europe towards resource-rich countries".

The World Resources Forum 2009 (WRF ) will tomorrow (16 September) adopt a declaration calling for a new global strategy governing the use of natural resources.

The forum will call for goods and services to be "dematerialised" and employment opportunities to be "maximised", as well as demanding international equity and per capita welfare improvements.

The draft declaration argues that while traditional environmental policies have in some cases been quite successful regarding water pollution in rich countries or recycling and removing dangerous goods from the market, for example, these policies are "toothless" when it comes to fighting the depletion of natural resources.

New economic framework

The draft declaration stresses that "politically defined economic framework conditions have to be adjusted to protect global ecosystems" and preserve resources for future generations. Such conditions should include incentives to make planned transitions immediately, instead of waiting for catastrophes to force the changes, it adds.

There are no incentives or policies in place to create a "sufficiently resource-efficient economy," notes the draft, while current markets are "blind to the environmental costs of growth" and hamper major increases in resource productivity. This is largely because market prices do not include environmental externalities and information is not made available to the relevant innovative stakeholders, it adds.

Tax resource use, not labour or end products

Adjusting the fiscal framework is "the most fundamental and urgent pre-requisite for approaching a sustainable future," the draft states.

It calls for subsidies that increase resource consumption to be eliminated, and highlights the need to shift away from taxing labour to taxing raw materials. This would have the "side effect of creating new jobs and redistributing income to developing countries where many of the resources come from," WRF notes.

Going even further, the declaration suggests that instead of applying VAT to end products, "it may be more effective to tax natural resources at the point at which they are removed from nature or where they enter the industrial metabolism".

'Dematerialising' goods and services and introducing low impact production systems will also require "radically new infrastructures, goods, services, processes, systems and business models," as traditional environmental technologies are no longer enough to decouple the meeting of human needs from the use of natural resources, WRF underlines.

Europe urged to measure resource use

Michael Warhurst of Friends of the Earth Europe (FoEE), an environmental NGO, deplored that Europe "has no targets" for reducing resource use, while "new policies are not assessed for their potential to increase our resource efficiency".

In a joint report with the Sustainable Europe Research Institute, FoEE is calling on the EU to measure its resource use and adopt new policies, such as higher recycling targets, to increase resource efficiency.

They suggest that Europe should measure its use of materials in particular, but also its land and water use and greenhouse gas emissions, taking account of the impact of Europe's consumption on the rest of the world in terms of imported resources.

Next steps:
16 Sept. 2009: Final call for action will be formulated at the World Resources Forum 2009 .


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