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Our future is linked to that of Strategic Natural Resources

Our future is linked to that of Strategic Natural Resources


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By Miguel Ángel Ortega *

The report on the World Trade 2010 of the World Trade Organization (WTO), contains a section dedicated to trade in natural resources. In addition to interesting statistics, it echoes the debate on whether technological development will allow us to overcome the limits imposed by the finiteness of resources and avoid the consequent deterioration of the planet. The "optimists" argue that this is what has been happening; The proof for them is that the price of natural resources has fallen in recent decades. I align myself with the "pessimists." The counterargument is clear: despite undoubted technological progress, all the prestigious environmental reports point out that the Earth and its resources are increasingly deteriorated. If raw materials fall in price, it is because their supply has increased and the company does not adequately internalize the costs of exploitation of human and natural resources. In addition, to set prices, the market is guided, among other factors, by the added value, which is the result of the technical knowledge provided by human beings in the transformation of natural resources, which are the basis of any product or service that we consume. This is another reason why the price of unprocessed products is lower. For now, production is sufficient to meet demand, but estimates have found that, for certain strategic raw materials, the outlook may change long before 2030, and then the price increase could be inevitable.

It is obvious that our civilization depends on natural resources, and that the unequal distribution and the increasing pressure on them can lead, in fact already leads, to tensions that cannot bring us anything good. This article talks about the situation of strategic natural resources (RNE).

Uneven cast

RNE production is concentrated in various regions of the planet. According to the WTO, large demand centers must cover most of their consumption with imports:

- Europe is a net importer of all types of RNE, as are Japan and Korea.

- The US is a net exporter of forest and mineral products, but a net importer of the rest of the RNE.

- India and China only export fish, and import everything else, although China concentrates a large part of the rare earth production.

Production is concentrated, in many cases, in poor and politically unstable countries, for which having such valuable resources is often a curse.

Water

According to the UN, humanity faces a very serious problem of water scarcity (United Nations, 2009). The aforementioned WTO report states that "the world's limited reserves of fresh and potable water for human consumption are rapidly declining, posing a serious threat to public health, political stability and the environment."

Atmosphere / climate


The intensity of climate change, a phenomenon for which there is increasing scientific evidence, depends on the concentration of greenhouse gases in the atmosphere. And this does not stop growing because total emissions continue to increase. If in 2001 each inhabitant of the Earth emitted, on average, 3.8 Tn of these gases, in 2007 the figure was 4.4 Tn. Again, we find a very uneven distribution: in 2008 an Indian emitted 1.31 Tn, a Spanish 8.86 Tn and an Australian 20.8 Tn.

Woods

In the Report of the Food and Agriculture Organization of the United Nations (FAO) Global Forest Resources Assessment 2010, it was noted that the overall deforestation rate was still alarming, although it was declining. According to the World Bank, between 1990 and 2007, the loss of forest recorded in a group of 30 countries amounted to 1,603,000 km2 (more than three and a half times the area of ​​Spain), of which most were lost in tropical forests With Brazil standing out, followed by Indonesia.

Fisheries

FAO states in its study World Fisheries and Aquaculture Status 2010 that “the proportion of over-exploited, depleted or recovering (fish) stocks increased from 10% in 1974 to 32% in 2008”. The sea no longer gives more of itself. Catches are stagnant or slightly declining. Although, fortunately, the increase in demand is met by fish farming, the continued pressure on marine fish stocks will accentuate the overexploitation of the sea.

Fossil fuels

According to the report Energy (r) evolution, published by Greenpeace and two organizations linked to renewable energies, we would have coal for a while: reserves exceed 3,000 times the world's annual extraction of this mineral. At the current rate of consumption, there would be gas and oil for another 40 or 50 years. If the unconventional reserves of these two fossil fuels, which can be extracted at even greater economic and environmental cost, are also considered, the demand could be satisfied without problem for at least a century. But the supply of fossil fuels, as we know, is associated with environmental (especially climate) and geopolitical risks. The BP company states in its report Statistical Review 2012 that, due to the riots in the Arab world and the earthquake in Japan, "2011 saw, for the first time, how the annual average price of oil exceeded $ 100". And this despite the fact that strategic reserves were used and the OPEC countries increased production.

Critical raw materials

Faced with increasing pressure on raw materials, the EU launched a working group to identify critical raw materials. It is about 41 minerals and metals whose lack would cause a very negative impact on the economy. Fourteen of them are especially critical (antimony, beryllium, cobalt, graphite, platinum group metals, rare earths, etc.). As the platinum group and rare earths comprise various raw materials, the list actually amounts to 35 substances , widely used especially in industries with high technological content. The EU has identified two types of risks associated with these materials: supply, taking into account geopolitical considerations, and environmental, due to insufficient protection of the environment in producing countries. China, Russia, Congo and Brazil are the main producers of this group of raw materials.

The role of China and other global players

But China's role is not limited to a major producer of some of the critical materials, such as rare earths. Its growing market gobbles up an ever-increasing portion of the world's resources. This is the case for the aforementioned rare earths, but also for other products. A study by the Federal Institute of Geosciences and Natural Resources of the German Government indicates that, in 2005, the average consumption of China represented 26.3 percent of the world consumption of these nine products: steel, aluminum, coal, copper, tin, nickel , oil, lead and zinc. In 2010 it was already close to 39.9 percent. Likewise, it is well known that China takes positions in the mineral markets, through investment in large western mining companies, and oil, through agreements to ensure its supply. It is also acquiring land in developing countries, which also give it access to large water reserves. It is not the only one, since India, Korea or several oil states in the Middle East are doing the same; but it is the main one. Therefore, emerging economies join the race for domination of resources that has already led European powers to create empires and to war with each other to maintain them.

RNE is the basis of all our consumption. Will its limited availability be able to meet the growing demand indefinitely? The answer could be "no". Let's be proactive. Let's reduce your consumption; Let us use technology to reuse, recycle and gain efficiency. Let's be aware that most likely if our consumption continues to grow, the time will come when there will not be for everyone; but not because, as it happens now, the resources are badly distributed but because, simply, there will not be. Ensuring its sustainable use and establishing the appropriate redistribution mechanisms would prevent more and more people from being deprived of a decent standard of living and violent responses to geopolitical tensions in the not too distant future.

*Economist. Director of Asociación Reforesta


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