Resource Productivity: Priorities and Policy Constraints

1. Dr. Arnold Tukker Resource Productivity: Priorities and Policy Constraints Sustainable Growth Seminar 17-19 September 2008, Wuppertal, Germany arnold.tukker@tno.nl

2. Presentation outline • Environmental impacts of products and materials – the macro-view • Key strategies for decoupling • Constraints • Implications for policy • Underlying premise: we need a Factor 10-20 improvement in resource productivity to cope with the trend that China, India and other countries try to reach Western wealth levels in the next 50 years arnold.tukker@tno.nl

3. A bit about myself • TNO: not for profit research • 5000 staff • 500 Mio Euro turnover • Arnold Tukker • (co-)author of EIPRO, EIRES and oather similar studies • Scientific Director of EXIOPOL • Member of Eurostat Task forces on Environmental Indicators and Resources/Product /Waste Data Centres • Closely connected to work of the EU, UNEP and European Environment Agency on natural resources and sustainable consumption and production arnold.tukker@tno.nl

4. Part I: Impacts of products and materials arnold.tukker@tno.nl

5. Impacts of materials and products: industry and materials perspective • EIRES (2003-2004); DTU, TNO for EU DG JRC IPTS • Results: industry perspective • Combustion processes • Solvent use • Agriculture • Metal extraction and refining and dissipative uses of heavy metals • Housing and infrastructure • Marine activities • Chemical industry • Results: resource input perspective • Fossil fuels -> GWP, AC, other combustion emissions • Use of specific metals or elements (e.g. N,P)- > impacts of mining, processing, and use • Area occupation • Construction materials -> Waste • CML EMC study came to similar lists (animal products, iron, aluminium, concrete, paper, some plastics) arnold.tukker@tno.nl

6. Impacts of materials and products: product and consumption perspective • EIPRO • Analysing ‘Environmental Impacts of Products’ • For DG JRC IPTS and DG ENV (SCP policy) • By TNO, CML, VITO, DTU, gladly using Suh’s CEDA 3.0 database • Pillar 1: Review existing priority setting studies for products • Bottom-up: extrapolates product LCA data to product groups • Top-down: uses Environmentally Extended Input Output -O to ‘allocate’ total emissions/resource use to final demand • Pillar 2: Economic Input-Output database with Environmental Extensions for the EU25, with 500 sectors (EE I-O) arnold.tukker@tno.nl

7. EIPRO: Results Pillar 1 • Food, Mobility and Housing dominate (70 % of impacts at 50% expenditure) arnold.tukker@tno.nl

8. Impact per Euro per product x totale expenditure = impact => surface is a measure for priority => figure indicates if shift in expenditure makes environmental sense, and if ‘rebounds’ are possible EIPRO: Resultats Pillar 2 arnold.tukker@tno.nl

9. EIPRO: Overall conclusions • Prioritary products and consumption activities are: • Mobility: cars and air transport • Food: meat, diary, followed by others • Energy use in and around the house: cooling/heating, and ‘Energy using products’ • Building, renovation and demolition of the house • The method proved its value, but there are clear problems • Lack of real EU data (we Europeanised US data) • Various technical issues • EU decided to fund via FP6 a major follow-up, EXIOPOL • 4 years, 5 Million Euro, 10 institutes on the IO part • 43 countries, 130 sectors, 35 emissions, dozens of resources • Leading to a Multiregional (trade linked) environmentally extended IO table for 2000 and 2005 arnold.tukker@tno.nl

10. See also: • EIPRO (EU IPP Site) • Journal of Industrial Ecology 10:3 EIPROSpecial Issue (Summer 2006;Yale and MIT Press arnold.tukker@tno.nl

11. Part II: Strategies for decoupling arnold.tukker@tno.nl

12. Intervention points for decoupling • Impact = Population x Affluence x Technical Efficiency • Population is a given • The question is hence how we create maximum ‘Affluence’ (or quality of life) with maximum ‘Technical efficiency’ • The production – market – consumption chain provides the following intervention points arnold.tukker@tno.nl

13. Sources of decoupling (production side) • End of pipe • Successful for small mass flows • Factor 5-10 can be achieved • E.g. emission targets for SOx in many EU countries • Reduction of CO, NOx, and VOC emissions from cars with a factor of 5 between 1990-2020 despite 50% more kilometers • Cleaner production and greening products • Incremental innovations: several dozen % • Radical innovations: factor 5+, such as: • Hydrogen cars • Alternative energy sources • Etc. arnold.tukker@tno.nl

14. Sources of decoupling (consumption side) • More intensive use of products (from products to services) • Renting, sharing, pooling • Multi-functional use • Typical gains: factor 2 arnold.tukker@tno.nl

15. Sources of decoupling, consumption side (ctd). • ‘Immaterial consumption’ • Figure gives impact/Euro for total EU expenditure in 280 categories • Difference high/low is factor 4-6 • Top categories are food products • …’we cannot stop eating’ • ‘Quality of life / Euro’ • UK: GDP rose factor 2 in 30 years • Life satisfaction not • Similar figures for Japan and other countries Source: EIPRO, EU DG JRC-IPTS, Summer 2005 Source: New Economics Foundation: A well-being manifesto (2004) arnold.tukker@tno.nl

16. Conclusions • The potental for Factor x decoupling is there • Addressing the consumption part is relevant • …which is a question of macro-economic efficiency arnold.tukker@tno.nl

17. Part IV: Policies and constraints arnold.tukker@tno.nl

18. Analyses in the SCORE! project Context and framework conditions A system is the the combination of: Markets Consumption Production Specialists: Knowledge field Domain KC2: Sustainable design KC1: Business development KC3:Consumer science KC5: Mobility Main object of analysis: Creating sustainable production-consumption value chains via information and awareness KC6: Agriculture/Food KC7: Energy/industry, e.g. consumer electronics KC4: System Innovation Policy Note: consumption sectors chosen on the basis of ETAP and the importance of the environmental impact arnold.tukker@tno.nl

19. Chaning consumption and production • Business can dematerialise production – but they win too from… • Externalising costs • Bringing hitherto ‘free goods’ into the monetary system • Promoting desire, greed, fear, to create ‘aspiration gaps’ • Creating ‘addicted’ customers • Consumers can ‘vote’ on the market – but… • Consumer is often not sovereign: routines, lock-in’s, and producer power determine choices • Wants often overwhelm needs (cf Branson’s Space Project) • Sustainable systems often don’t provide equal dreams, identity & quality • Designers do develop new systems – but often as niches • You have to understand the interactions -> a systemic perspective seems the best way forward • Think of the decline of social capital, equity, and other institutions that create quality of life in many Western societies…. arnold.tukker@tno.nl

20. Towards an integration of views • System • ‘Landscape’: ‘meta-’context (trends, values, structures) => givens that channel developments in regimes • ‘Regime’: mainstream production-consumption practices => due to interconnections form another source of inertia • ‘Niches’: alternative practices • Policy should discern ‘regime compliant’ and ‘long term’ approaches arnold.tukker@tno.nl

21. Policy: regime and landscape compliant policies • ‘Start where people are’ - create momentum from there Production Markets Consumption arnold.tukker@tno.nl

22. Medium and long term • Medium term: build adaptive capacity • Overcome lock-in’s by product roadmaps, indicative (spatial) planning, transition management • Support development of alternative niches • Long term: deliberate meta-paradigms • Beyond the consumer economy – how does the sustainable growth engine look like? • Inequity – how to promote fair markets? • Consuming less or less material – when does it help to reach a high quality of life? • Social aspirations and status – how to reach this in an immaterial way, or damp this race altogether? • Power balances – how to restore them in the triangle of business, government and citizens? arnold.tukker@tno.nl

23. Summary and conclusions • Priority domains are (rather) clear • Food, mobility, housing from a consumption perspective • Energy, animal products, iron, aluminium, concrete, paper, some plastics from a resource perspective • Radical decoupling is possible, but needs to address the full production-consumption chain • End of pipe (factor x for small mass flows) • Cleaner production and greening products (20-50%) • Product service business models (factor 2) • Switching expenditure to immaterial products (factor 2) • Re-thinking how economic expenditure provides Quality of Life (Factor 2-4) • Meta-factors / paradigms and regime interdependencies form constraints for policy => • Regime compliant measures • Softer strategies addressing learning processes and mindset change arnold.tukker@tno.nl

24. Addendum: some slides on EXIOPOL (if needed) arnold.tukker@tno.nl

25. Addendum: Organisation of the project • Structure and ambition • Workstream (WS) 1: Inception (sector and data structure) • WS 2: EE I-O data for Europe • I-O: EU25/EU27 per country, follow ESA95, but expand to 120 sectors using new NACE • EE: use various sources (NAMEA’s, EEA, FAO Stat, WI and SERI databasese, etc.) • WS 3: EE I-O data for Rest of world: • I-O: 15-20 countries that together with EU cover 80-90% of the global GNP • EE: see above • WS 4: Integrate into a single database • Link via trade (PhD trajectory with RU Groningen) • Transforming input data to a EE I-O database • Link with 1-2 dynamic models in use at IPTS • Other WSs: exemplary policy applications arnold.tukker@tno.nl

26. Role and philosophy • Role of each partner in the EE I-O cluster • TNO: manager, expert in emission databases and I-O • CML: expert in impact assessment and EE I-O • WI: expert in emission and MFA data (Eurostat NAMEA project) • SERI: expert in MFA data (MOSUS project) • GWS: expert in trade links (MOSUS project) • NTNU/RPI: expert in I-O and EE I-O • IPTS: EU foresight ‘planning bureau’ and expert in modelling • ZEW: expert in CGE modelling • RU Groningen: expert in trade link of I-O (FP6 EU KLEMS) • Philosophy • Protected, open source database (hence foregoing GTAP) • To be handed over to IPTS, EEA, Eurostat for formal use • Filling an essential gap in the EU toolbox arnold.tukker@tno.nl

27. Organisation of the project WP III.1.a: Scope refining WPIII.4.b: Data transformation to EEIO tables / data base manager* WPIII.4.a: Trade linked global system (linking country SUT/IO tables via trade data) WPIII.2.a: Detailing EU tables (ESA95 60 sector SUT/I-O for the individual EU25) WPIII.2.b: Environmental extensions for the EU25 WPIII.1.b: External costs per sector / kg emission or unit interven-tion WPIII.3.a: Global context: IO tables (10-15 additional countries for reaching 80% Global GNP) WPIII.3.b: Global context: environmental extensions * WP III.2.c specifies consumers and waste WP III.4.c: Interfaces to existing models and elaboration of the WTM Exemplary applications in Cluster IV.1 arnold.tukker@tno.nl