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Scenario analysis and the use of materials

In this section I report the results of the analysis of a specific scenario about the future, focusing on the use of primary materials. In the modelling framework used for this analysis, the material structure of an economy is described in terms of its natural endowment of soil, water, primary materials, etc., the accumulation of built capital including roads, buildings, and machines, the pool of workers of different qualifications, and the characteristic ways in which these factors of production are used. Despite significant variation in the structures of different economies, one can distinguish a few basic patterns. Four groupings of regions will be discussed below: the rich, industrialized economies; the economies of Eastern Europe and the former Soviet Union; the newly industrializing countries; and the rest of the developing countries. The groups tend to differ with respect to their natural riches, the types of capital employed, the education, health, and productivity of the workforce, the amount of capital at the disposition of the average worker, and the per capita utilization of fuels and materials. Consequently, they also differ with respect to the technologies used in all sectors of the economy. With globalization, however, most economies tend to move in the direction of the industrialized economies in terms of their choices of technologies and the associated factor inputs.

In a recent study about global air pollution, Lange and I examined the consequences for the world economy (described in terms of 16 regions) over the period 1980-2020 of alternative assumptions about future choices of technology in the different regions (Duchin and Lange 1994). The scenario we analysed was intended to examine the outlook expressed in the Brundtland Report (WCED 1987), the publication that popularized the notion of sustainable development. It incorporates United Nations projections about population growth, optimistic assumptions about economic growth in both developed and developing countries, and assumptions about the adoption of clean and efficient technologies in the material-intensive and energy intensive sectors in all regions over the next three decades. The scenario is optimistic in suggesting that sharply improved material standards of living in the developing economies, further increases in per capita consumption in the rich economies, and the volume of population increases that is anticipated for the twenty-first century can be compatible with reduced pressures on the environment provided that sensible technologies are adopted, such as extensive conservation of energy, recycling of metals, glass, and paper at rates approaching those achieved in only a few countries today, and the rapid incorporation of the cleanest and most efficient technologies currently available or near commercialization. Our objective was to investigate the plausibility of this scenario by documenting explicit assumptions about the adoption of new technologies in the different regions and creating a modelling framework to analyse them. The assumptions are developed in the course of 10 case-studies and include extensive recycling, highly fuel-efficient vehicles, energy conservation in homes and businesses, etc. The outcomes were compared with those of a business-as-usual scenario that assumed no technological changes.²

From an economic point of view the scenario is cost saving, especially in the rich countries, although it is far more capital intensive than the current mix of production techniques in developing countries. Despite substantial savings in energy and materials that are attributable to the new technologies, however, the pollutants that are tracked in the model all continue to grow, rather than fall, over the period studied. For the four groupings of regions, table 8.1 shows the levels of consumption of the 14 categories of primary materials in 1980 and 2020, the regional distribution of consumption, and consumption per million people. The rates of growth of consumption and of per capita consumption of these primary materials are reported in table 8.2.

Even under a scenario that is rather optimistic about conserving mineral resources, net consumption of all 14 food, fuel, and non-fuel resources increases over the 40-year period (see table 8.2). On a per capita basis, however, net consumption of eight of the resources actually falls because of technological changes - by as much as 36 per cent in the case of iron. This comparison strongly suggests that, over the next few decades, the impact of population growth on resource utilization will more than offset the economies that can be achieved by these technologies.

Population in the developing countries increases from 72 per cent of the total in 1980 to 81 per cent by 2020, and an even larger share can confidently be expected before world population stops growing. By 2020, per capita consumption of most materials is still highest in today's rich economies, followed by the formerly socialist economies, the newly industrializing countries of Asia and Latin America, and then the other developing economies (see table 8.1). However, there are some notable exceptions.

Not a single primary material among those in the tables is used by the two developing regions in proportion to their combined share of population in 1980 or even in 2020. However, the disparity among regions is much lower for food than for fuel and non-fuel minerals. None the less, the dominance of plant-based foods over animal products in the developing countries is clear even at this gross level of spatial discrimination. In the world as a whole, harvesting of edible raw materials grows faster than that of minerals between 1980 and 2020 even though it also starts from a lower gap between rich and poor countries. This growth reflects the steep rates of increased food consumption, especially of animal products, anticipated for the developing countries of Asia. A much closer look at the changing composition of the diet of different categories of households in all countries is clearly merited and amenable to this kind of approach, but it has not yet been carried out. A quantitative, structural analysis of household consumption, and of social welfare more generally, is far less developed than the multisectoral analysis of production. (See Duchin, forthcoming, for a detailed conceptual and applied framework for the multisectoral approach to household activities.)

Per capita use of fossil fuels declines by 2020 in the rich economies owing to a variety of measures including more fuel-efficient cars. Worldwide demand for natural gas actually doubles, with very steep increases in the developing economies. According to these projections, Eastern Europe and the former Soviet Union remain very energy-intensive economies because of their industrial mix and a rather low starting point for energy productivity. Despite massive increases in the use of energy in the developing economies, their per capita use of fossil fuels is still very low in 2020 by global standards. (Their use of nuclear fuels is quantified in Duchin and Lange 1994.)

Of the non-fuel minerals, only the use of bauxite increases worldwide on a per capita basis. Despite increased rates of recycling, total bauxite use more than doubles as aluminium increasingly substitutes for other materials in construction, in automobiles, and in other fabricated products. In the rich economies, demand for lead and iron actually falls and demand for nickel and copper is nearly flat. But the use of all of these metals, and of other materials not shown such as plastics and paper, will increase steeply in the developing economies even on a per capita basis.

The foregoing are the consequences of doing things "smarter" but without dramatic departures from today's technical practices. In terms of the use of all primary materials, such a scenario will clearly put more, not less, pressure on the environment over the next several decades because the combined effects of population increase and improving the material standard of living in the developing countries will more than offset the savings in primary materials associated with the substitutions among materials, recycling, and other technological changes. The results of this analysis provide the motivation for a more radical agenda for eco-restructuring.

Table 8.1 Consumption of primary materials in the world economy in 1980 and projections for 2020

Source: My calculations. For description of assumptions, see text and Duchin and Lange (1994).
a. The regions are rich, developed economies (RDE), newly industrializing (NIE), other developing economies (ODE), and Eastern Europe and the former Soviet Union (ESU).
b. Crops and minerals are measured in millions of tons, except for nickel which is in thousands of tons. Fuels are in millions of tons of coal equivalent.

Table 8.2 Growth in consumption of primary materials in the world economy, 1980-2020

Note: See table 8.1 for region names.
a. The growth in per capita consumption for the world as a whole is in several cases lower than growth for all component regions. Although the result may appear counter-intuitive, it is readily confirmed using the figures in table 8.1 and reflects the rapid growth of population in the regions with the lowest per capita consumption.

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