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How will resource scarcity impact industry in Bristol?

Alice-Marie Archer, Oliviero Mannu & Julia Ankenbrand Speaking at the Schumacher Institute for the

Rethinking Globalisation Seminar Series

  “At the end of the day, we are not about to “run out” of any Nonrenewable Natural Resources; we are about to run “critically short” of many. This reality will have a devastating impact on our industrial lifestyle paradigm” – Chris Clugston for The Oil Drum

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  “It was shown that scarcity affected manufacturers through process disruptions and unexpected increases in expenditures. Recycling, substitution and dematerialization were actions taken or encouraged by firms in the manufacturing industry that reduced the impact of scarcity. These responses take time to implement, are not available to all and lead to permanent market changes. … manufacturing firms may not be adequately appreciating the benefits of recycling, dematerialization and materials substitution if they do not consider the effects of increasing scarcity. Moreover, because markets respond slowly to changes, manufacturers who can respond rapidly to increasing scarcity because they have a strategy in place can gain a competitive advantage” – Elina Alonso, MIT, 2010

  “Due to the combination of 100% dependence on imported supplies, a high concentration of production in relatively few countries and low substitutability and recycling rates, the UK is vulnerable to restrictions in supply of some metals” – UK Parliamentary Inquiry into Strategic Metals

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Overview

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  Introducing The CONVERGE & Prepare For Change Projects   A Challenge to Bristol’s Industry

  Finite Materials   Peak Everything   Geopolitical Situation in general   Resources & Geopolitics – implications for Bristol   Our Nonrenewable heart - intro

  Where next?   Substitution   Technological advances

  Case Examples

Introducing the CONVERGE Project   Title: Rethinking globalisation in light of Convergence   Funded by the EU (FP7) under Collaboration   4 year research programme   Focusing on the exploration of ‘Equity within biological

planetary limits’   8 Partner organizations in 5 countries

  UK – Schumacher Institute, University of Bristol   Hungary – Szent Istvan University, GreenDependent   Sweden – University of Lund, The Natural Step   Iceland – University of Iceland   India – Social Change and Development

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Convergence

  (kn-vûrjns): The point of converging; a meeting place: e.g. a town at the convergence of two rivers.

  Reduction of resource consumption and unsustainable behaviors in the developed world while accepting increasing consumption and systematic sustainability in developing and deprived sectors all within biological planetary limits.

  Borrows from the principles behind ‘contraction and convergence’.

  “progress towards equity within biological planetary limits”

  Unifying Framework for: Intergenerational equality, Social Justice, Sustainability, Human Rights, Millenium Development Goals, Systems Science, Global budgeting, ecological economics

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Prepare for Change project

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Finite Materials (from the Global Nonrenewable Natural Resource Scarcity Assessment 2002 - 2008 )

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Finite Materials – 2030 Now Permanent Global NNR Supply Shortfall (by 2030) Probability Summary (from the Global Non-renewable Natural Resource Scarcity Assessment 2002 - 2008 )

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K.V. Ragnarsdottir, H.U. Sverdrup, Deniz Koca:

Dynamic models

  reserves of some key metals   locations of the ores   technology they are used for   degree of recycling

  many metals we rely on will run out in 10-40 years

Burn-off time: known mineable reserves divided by the estimated average annual mining rate

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Examples for uses of scarce materials

  Fertilizers   Phosphorus   PGM

  Strategic material for digital technology   REM   Tantalum   Telurium   Silver, Gold

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Examples for uses of scarce materials   Engines / Aerospace   Titanium   Tungsten/Wolfram   Molybdenum   Aluminium   Zinc   Cobalt

  Batteries   Lithium   Lead   Cadmium

Interconnections

Cobalt

Silver

Copper

Tellurium

Nickel

Trajectory   20 century (Actual)

  In general global NNR supplies kept pace with ever-increasing global demand

  During the pre-recession years of the 21st century (2000-2008), (Actual)   annual global NNR supplies decreased or even go negative compared to 20th

century

  annual global price levels increase

  annual global NNR supplies increasingly unable to keep pace with ever-increasing global demand.

  2030 (Projected)   Many Resources enter permanent supply shortfall   Annual global price levels increase

  Geopolitical instability around increasingly valuable materials   Increased inequality in geographical allocation of resources

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Bristol makes / processes / distributes

  Glass – Thallium, Zinc, Lead, Cobalt, Tantalum   Engines – Bauxite, Iron Ore, Molybdenum, Titanium, Zinc, Cobalt   Aircraft/Aerospace – Gold, Tantalum, Titanium   Industrial Coatings – Chromium, Silver, Zinc   Plastics and Rubber (Packaging) – Oil, Titanium, Tellurium   Electronics – Tantalum, Molybdenum, REM   Food – Phosphorus, PGM, Molybdenum   Pharmaceutical Industry, Cosmetics – Silver, Zinc, PGM   Automotives and –parts (i.e. catalyser) – PGM, Lead   Tobacco Products – Phosphorus

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Geopolitical situation

 Several disturbing factors:   Growing demand pressure from emerging economies

  Low elasticity, increase the risk of the occurrence of crises (rush for tantalum in 2000 due to the boom of mobile phones)

  Concentration of the production of many materials in a small number of countries

  Difficulty in acceding to various markets as industrial development strategies are implemented by means of trade taxation and investments instruments, particularly by developing countries

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Geopolitical Situation

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Case Studies – Geopolitical Perspective   Rare Earth Materials (REM)   Phosphorus

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Strategic Transition

  Recycling   Substitution  Dematerialisation  Demand side management (consumer end)

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Recycling - Auralite, Sweden

  Resource scarcity challenge faced   Access to Raw Glass.

  Raw Glass and other components necessary for production of fluorescent lightbulbs getting more expensive

  Steps taken   In House Recycling Plant (MRT)

  Collection of post consumer waste

  Recycling of Mercury

  Phosphorescents

  Glass

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Recycling - Rolls Royce   Resource Scarcity Challenge

  Metals

  Steps Taken

  The company has established a Global Revert Consortium, involving its own manufacturing facilities, overhaul shops, suppliers and partners in recycling metal turnings, foundry waste and unserviceable engine parts, which contain rare metals.

  Agreements with key suppliers require them to recover revert from machining and forging processes to retain the metal within their supply chain.

  Employs a specialist third party to securely segregate, collect and process revert from facilities and suppliers around the world.

  Material undergoes several specialist processes to recover precious metals and clean up the parent metal so it is suitable for re-melting into the same alloy.

  Recovery also means that Rolls-Royce pays less for raw materials, mills can rely on them as a source of their raw material and they are not exposed to as much market price volatility and metal scarcity.

  The company’s designers have developed alloys that halve the amount of rare earth elements required in some of the company’s jet engine parts.

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Substitution - Electrolux   Resource Scarcity Challenge

  Cadium for batteries, Petrol / Diesel for both product distribution and consumer use, Iron Ore (Steel) in product casing and electronics

  Steps Taken

  Creation of a portable vacuum that uses cadmium-free rechargeable batteries

  The use of canola oil, a biodegradable vegetable oil, in its chain saws

  Utilization of the railway system (more fuel-efficient than trucking) for 75% of product distribution in Europe

  Brush cutters and trimmers that consume 30-35% less fuel than earlier models

  Use of Aluminum (from comparatively available Bauxite) over other metals in product casings

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Substitution - Ikea   Resource Scarcity Challenge

  Chromium for metal surface treatments

  Steps Taken

  Use of powder lacquer is substantially reducing the use of chromium for metal surface treatment

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Dematerialization – Interface

  Resource scarcity challenge faced   High levels of waste carpeting

  Steps taken   Leasing of Carpets

  Firm can restore carpet continuously, replacing only the worn sections

  Use of Solenium - carpet lasts four times longer than normal carpets and require 40% less material; in other words, Solenium has enabled Interface to reduce materials intensity in its carpets by more than 85%

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Dematerialization – ULSAC Consortium

  Resource scarcity challenge faced   steel is heavy, capital-intensive, and slow to tool— tooling for

an all-new body and chassis can exceed $1 billion. In fact, the use of steel in two major industrial activities, namely, construction and automobile manufacture, has been in decline.

  Steps taken   Introduction of Ultralight Steel initiated with the prototyping of complete frameless door structure in 2000.

The door structure featured a high and ultra high strength steel tubularframe and a stamped outer panel of 0.7 mm 260 steel. The complete door structure weighed 10.47 kg (normalized mass, 13.27 kg/m2). This is 22 % lighter than the framed door best-in-class benchmark and 42 percent lighter than the average frameless door used as a Validation Phase benchmark. This was achieved without compromising safety or structural performance and at no cost penalty. The ULSAC frameless door with stamped outer panel weighs just 10.47 kg. This is 1.76 kg below the target mass of 12.23 kg o ULSAC door achieved 33 % mass savings over the average benchmark from a wide range of door structures

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Is this an issue?   Do we need to be strategic?

  Does material security require a strategic view from industry now?

  Who are the stakeholders?

  Or do we need to be reactive?   concerns be addressed by the “invisible hand” of the market

whereby:   Consumers to reduce demand by using the material more efficiently   Consumers and competitors to locate substitute materials that cost

less but perform equally well   Producers to increase production by ramping up existing production,

locating new raw material sources, technological innovation to increase yields from existing or previously uneconomic sources

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Discussion session   What would the consequences of scarcity be in Bristol?   What steps could the city be taking?   What are the human / ethical / fairness impacts of

scarcity?

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Sources / Further Reading   ECONOMICALLY CRITICAL MATERIALS - http://ec.europa.eu/enterprise/policies/raw-materials/critical/index_en.htm

  PEAK EVERYTHING: WAKING UP TO THE CENTURY OF DECLINES– Richard Heinberg://www.amazon.co.uk/Peak-Everything-Waking-Century-Declines/dp/B0042RUF2K/ref=sr_1_2?s=books&ie=UTF8&qid=1305799362&sr=1-2

  RESOURCES, SCARCITY, GROWTH AND THE ENVIRONMENT - Robert U. Ayres - http://ec.europa.eu/environment/enveco/waste/pdf/ayres.pdf

  Increasing Global Nonrenewable Natural Resource Scarcity—Prelude to Global Societal Collapse - Chris Clugston

  http://www.theoildrum.com/files/Increasing%20Global%20Nonrenewable%20Natural%20Resource%20Scarcity%20-%20Draft.pdf

   

  Economics of Natural Resource Scarcity: The State of the Debate - Jeffrey A. Krautkraemer - http://www.rff.org/documents/RFF-DP-05-14.pdf

   

  Resource Scarcity: Responding to the Security Challenge - Richard A. Matthews

  http://reliefweb.int/sites/reliefweb.int/files/resources/F1AD443C34D35A728525743300667988-IPI_Resource%20Scarcity.pdf

   

  Blood and Soil? Resource Scarcity and Internal Armed Conflict Revisited - OLE MAGNUS THEISEN - http://jpr.sagepub.com/content/45/6/801

  Material scarcity from the perspective of manufacturing firms : case studies of platinum and cobalt - Elisa Alonso (Elisa Yun Han) - http://dspace.mit.edu/handle/1721.1/59210

  Economics of technological change and the natural environment: How effective are innovations as a remedy for resource scarcity? – Lucas Bretschger - Ecological Economics 54 (2005) 148 – 163

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Sources / Further Reading   Rarer still? Supply risks of rare earth elements –Paul Suff for The Environmentalist (2011)

- http://www.environmentalistonline.com/article/2011-03-17/rarer-still-supply-risks-of-rare-earth-elements

  Decoupling Resource Use and Environmental Impacts from Economic Growth - UNEP (2011) http://www.unep.org/resourcepanel/Portals/24102/PDFs/DecouplingReport_small.pdf

  Video – Biomimicry in Action - http://www.ted.com/talks/janine_benyus_biomimicry_in_action.html

  COMMODITY MINE - CommodityMine is your comprehensive news and information source. In addition to the latest prices, you can find in-depth commodity news, a list of upcoming mining events and even career information. The All Charts page allows you to compare price changes for gold, silver, copper and other commodities over a variety of time periods. Dynamic Charting allows to you adjust individual commodity timelines according to weight and currency - http://www.infomine.com/commodities/

  USGS Mineral Commodity Summaries 2011 - http://minerals.usgs.gov/minerals/pubs/mcs/2011/mcs2011.pdf

  Strategically Important Metals - http://www.publications.parliament.uk/pa/cm201011/cmselect/cmsctech/writev/metals/sim13.htm

  Resource efficiency knowledge network - http://www.oakdenehollins.co.uk/pdf/material_security.pdf

  Dematerialisation for Urban Waste Reduction - http://www.google.com/url?sa=t&source=web&cd=5&ved=0CDUQFjAE&url=http%3A%2F%2Fwww.leidenuniv.nl%2Fcml%2Fssp%2Fpublications%2Fwp2001-014.pdf&rct=j&q=dematerialisation%20example&ei=ArvbTYKBF47HswbelZztDg&usg=AFQjCNG9DWdgOfE-0PO4IFnbyzLAwTSgfQ&sig2=0Tt6i7Z5n3mIgovRTut7Bg&cad=rja

  Web based survey of trends in Dematerialisation - http://www.google.com/url?sa=t&source=web&cd=1&ved=0CBkQFjAA&url=http%3A%2F%2Fcss.snre.umich.edu%2Fcss_doc%2FCSS01-17.pdf&rct=j&q=nanotechnology%20dematerialisation&ei=Mr3bTd6sH8-Rswb2-uXfDg&usg=AFQjCNGHffUy2iJ8KatrnMNRyFEmWgUL1g&sig2=Kval_bnPBV_XZe8eyt2Juw&cad=rja

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A Challenge to Bristol’s Industry

  “Business is the largest, wealthiest, most pervasive institution on Earth… It must take the lead in directing the Earth away from collapse, and toward sustainability. ...” - Paul Hawken in The Ecology of Commerce

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