Government review to examine threat of world resources shortage
Study commissioned following sharp rises in commodity prices on world markets and food riots in some countries
By Juliette Jowit
Ministers have ordered a review of looming global shortages of resources, from fish and timber to water and precious metals, amid mounting concern that the problem could hit every sector of the economy.
The study has been commissioned following sharp rises in many commodity prices on the world markets and recent riots in some countries over food shortages.
There is also evidence that some nations are stockpiling important materials, buying up key producers and land and restricting exports in an attempt to protect their own businesses from increasingly fierce global competition.
Several research projects have also warned of a pending crisis in natural resources, such as water and wildlife, which have suffered dramatic losses due to over-use, pollution, habitat loss, and, increasingly, changes caused by global warming.
Professor Bob Watson, the chief scientist for the Department for Food, Environment and Rural Affairs, the leading department in the initiative, said every sector of the British economy was directly or indirectly vulnerable to future shortages.
These could be caused either by resources running out or becoming harder to access because of geopolitical factors from war to tighter environmental regulation on resources such as timber and palm oil – the latter being found in an estimated one in 10 products, from chocolate to cosmetics, sold in Britain.
“One of the roles of government is to provide information … come up with a shared vision of moving forward and working with the private sector so we have competitiveness, a viable economy moving forward,” Watson said.
AEA, the consultancy commissioned to carry out the study, said resources at risk included timber, water, fish, precious metals and minerals such as phosphorus, which is widely used in fertiliser.
One area of particular concern is “rare earth elements”, important for defence and many green technologies from low-energy lightbulbs to wind turbines, as well as industries as varied as electronics and lasers, film and lighting, aircraft engines, nuclear reactors, and pain-relieving drugs, Phil Dolley, AEA’s resource efficiency director, said.
Elsewhere, the US, the EU and Mexico have announced that they want to bring a World Trade Organisation case against Chinese restrictions on exports of nine key raw materials, including coke, bauxite, magnesium and fluorspar, all important for producing steel, aluminium and other chemicals.
Resources under scrutiny by the UK government do not include the already heavily studied oil industry, nor ecosystem services such as flood defences, but the range was still “vast”, Dolley, said.
“It’s a hot topic because other countries are also thinking of this [and] doing a lot of work,” he added.
For years, experts have warned of the threat of peak oil to both the world economy and international political stability if countries go to war to secure access to fossil fuels.
However, there is now also increasing concern about a range of other resources, including a report by the World Business Council for Sustainable Development in December that the European commission has commissioned a review of 49 strategically important resources it believes are at risk.
Among the countries known to be stockpiling resources, Japan has said it is storing supplies of seven rare metals it believes are “essential to modern life and industry”.
Writing in the Wall Street Journal earlier this month, James Bacchus, the chairman of the WTO’s appelate body, said China was also “hoarding rare elements and other raw materials”, but so were many other countries and there had also been a “sharp increase” in actions to protect national resources worldwide.
The international affairs thinktank Chatham House, which is carrying out its own review into the resource crunch, has also compiled a list of deals signed by Chinese state-owned companies for special access to oil and gas reserves and the purchase of stakes in oil and coal producers covering South America, Australia, Russia and the Middle East.
The Guardian has also reported on the growing trend for buying land in African countries to gain access to water and space for crops – particularly by Chinese and Middle Eastern companies, sometimes backed by their governments.
However there is not yet firm evidence that many resources seen to be at risk will run out or be disrupted, or cannot be replaced or supplemented by new supplies, Bernice Lee, Chatham House’s research director for energy, environment and resource governance, said.
For example, lithium – which will be increasingly in demand for electric vehicle batteries – is mostly mined in Bolivia and Chile, but there are vast supplies elsewhere if the technology can be found to extract it at a reasonable cost, Lee said.
“It [the resource issue] is important because it’s seen to be important – countries are already imposing policies,” she added.
AEA’s initial report is due to be completed in the autumn, Dolley said.
In a written statement to the Guardian, the Department of Business, Innovation and Skills, which is also on the report’s steering group, said: “The Department for Business looks forward to reading the report from the AEA on the future of material resources.
“It is important to assess the long-term viability of resources to help protect businesses in the future.”