Material Flows

We have seen that the key to economic growth has been the unlocking of forms of stored sunlight (link to concepts) with high energy intensity. (By ‘energy intensity’ we mean energy per unit mass.) This has enabled the exploitation of material resources in the economic system.

When England’s tree population was depleted and no longer a viable fuel source it discovered coal and then (in other parts of the Empire) oil. These are finite resources, which led to the fear that we would sooner rather than later run out of them. We won’t. Burning all the fossil fuel reserves (other things being equal) will more likely sterilise the planet through the warming climate. (In fact, ‘warming’ would be too mild a term! We will be fried before we run out of fossil fuel.)

The other aspect of metabolism is the throughput of matter. So what about other materials, such as metals? Well, in theory, we cannot run out of these (at least, the non-radioactive ones), because their atoms are conserved. With the exception of man-made elements like plutonium and radioactive ones like uranium, the number of atoms of an element on the Earth was fixed at the time the Earth was formed. The issue is whether they can be extracted economically, and, as we have seen, that depends on our ability to capture order from the Sun. Projecting with current technology suggests we shall obviously run out of everything in this sense sooner or later, but that is not really very informative.

Let’s look at ‘Peak X’ where X stands for any exhaustible resource. The most well-known of the predictions of production peaks is peak oil first proposed by Hubbert in 1956 (although Hubbert didn’t use the term peak oil). Hubbert predicted that oil production in the US would peak between 1965 and 1971. In fact, it first peaked in 1970. The graphs in Figure 1 show various predictions for oil production. As we can see here after years of decline US production has started rising and is now back to around the 1970s peak, as a result – you guessed it – of technological developments that access oil from shale economically.

Figure 1

Here’s another example, in this case copper production. Copper, unlike oil, is conserved, because copper atoms can neither be created nor destroyed, but there is a limited amount of ore accessible to conventional mining. According to the forecast here, the world will run out of this around 2100.

For gold, estimates of when we might reach the peak range from ‘we’re past it already’ to ‘not in the foreseeable future’. Supplies of easily accessible phosphorus appear to be available at current consumption for around 100 years. Reserves of the chrome ore, chromite, will last for centuries. Lithium, the stuff of batteries for electric cars isn’t a problem, although the equally essential rare earths might be. Estimates for Uranium range from less than 100 years to essentially infinite (i.e. outlasting the Sun) depending on breeder technology. With this exception, the point being made is that the reserves of all of these minerals in economically exploitable form are finite, and so we will run out of them at some time. One can debate the stage at which one has to start worrying about this and making plans.

A far bigger issue is that of planetary boundaries – how much reorganisation of the earth, air and oceans the earth system can accept without possibly catastrophic changes. Here, current technology is important: the boundaries are with us now and they won’t change significantly. At best, changing technology will enable us to stay within these limits. Several ways have been developed to describe these limits: ecological footprints measure individual impact on the Earth’s resources; planetary boundaries and safe operating spaces highlight global limits. We’ll look at planetary boundaries and leave you to read about footprints and safe limits if you have time.

In this video we’ll look at the limits to development focusing on materials and the environment.

A closed economy

Having discussed the problems in various aspects, let’s turn to approaches to solutions. From a metabolic view these will hinge on the way in which we can minimise the flow of matter (and waste) through the economic system. This will require changes in the way that industry works.

To illustrate scale of the problem, this extract from Natural Capitalism by Hawken et al (1999) gives an example of the flow of matter required for one family in a year. I have translated the US imperial units of the original approximately into kg.

Industry moves, mines, extracts, shovels, burns, wastes, pumps, and disposes of 2 million kg of material in order to provide one average middle-class American family’s needs for a year. In 1990, the average American’s economic and personal activities mobilized a flow of roughly 55 dry-weight kg of material per day—equivalent to a quarter of a billion semitrailer loads per year. This amounts to 21 kg of fuel, 40 of construction materials, 6 of farm and 3 of forest products, 3 of industrial minerals, and 1.5 of metals of which 90 percent is iron and steel. Net of 3 kg of recycled materials, that average American’s daily activities emitted 55 kg of gaseous material into the air, created 20 kg of material artefacts, generated 5 kg of concentrated wastes, and dissipated 1.5 kg of non-gaseous wastes into the environment in such scattered forms as pesticides, fertilizers, and crumbs of material rubbed off tires. In addition, the person’s daily activities required the consumption of about 1000 kg of water that after use is sufficiently contaminated that it cannot be reintroduced into marine or riparian systems, and produced 160 kg of rock, tailings, overburden, and toxic water as a result of extracting oil, gas, coal, and minerals.

In sum, Americans waste or cause to be wasted nearly one half million kg of materials per person per year. This figure includes: 900 million square metres of carpet land-filled, 1.5 trillion kg of carbon in CO2 gas emitted into the atmosphere,9 billion kg of polystyrene peanuts, 12 billion kg of food discarded at home, 160 kg million kg of organic and inorganic chemicals used for manufacturing and processing,320 billion kg of hazardous waste generated by chemical production, and 1.6 million kg of construction debris.

Circular economy

The natural world is in no danger of running out of material because everything is recycled. The natural world has the advantage of time over man-made industry, in that recycling can take millions of years. Nevertheless, the closer we can get to a low throughput economy (an economy that minimises waste), the more sustainable it will be. In this video Sandra Lee, Sustainability Manager at the University of Leicester, explains more about a ‘circular economy’ in which material throughput is minimised.

Although most industries are not organised in anything like a circular economy, there are other examples of ones that are. This video The Earth Circle: making environmentalism pay its way gives an example.

Corporate social responsibility

For a corporation we can adapt the Brundtland definition of sustainable development:

Corporate sustainability means that the present needs of the organisation or industry are met without compromising the ability of future generations to achieve their own needs

Corporate social responsibility is part of a sustainability strategy, although the latter also includes the obverse: mitigating risks to the organisation from environmental disruption to supply chains1.

It is operationalised through a firm’s engagement (voluntarily initiated) and compliance (legally mandated) with issues of environmental, social and governance. (This is interpreted by, for example, the European Federation of Financial Analysts Societies as energy efficiency, greenhouse gas emissions, staff turnover, training and qualifications, maturity of workforce, absenteeism rate, litigation risks, corruption and revenues from new products)

“the only social responsibility of corporations is to make money” Milton Friedman (1970)

“Driving shareholder wealth at the expense of everything else will not create a company that’s built to last.” Paul Polman, CEO of Unilever, Harvard Business Review (2012)

“Business cannot succeed in a society that fails.” Björn Stigson

This last is the usual quotation from an interview with Björn Stigson, CEO World Business Council for Sustainable Development. However, he went on to say:

“Likewise, where and when business is stifled, societies fail to thrive.”

Which is it? Is corporate social responsibility a luxury indulged in by managers with time and money on their hands, or a route to a successful business? And if the former, what action is necessary and effective? Is it the legal framework or social pressure or some combination of both?

We cannot resolve these issues here (and the literature is inconclusive). In Week 4 we shall see that the issue can be related to the collective action or free rider problem. (Value added is captured by shareholders but the costs are born by the wider society.)

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