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You may not even know it, but trends are happening all around you. The biggest and most important ones happen on such a global scale that they impact supply chains, natural resources, and the political relationships between countries.
In this post, we’re looking at another of the European Environment Agency’s global megatrends outlined in their outlook report. For more information about megatrends, be sure to check out our earlier posts. [link to #1]
This post is all about how the competition for resources is on the rise and what that means for how we allocate our commodities. We’ll also consider some opportunities for innovation that arise from increased competition.
What’s happening to the world’s resources?
There are a few different factors affecting how the world is using its resources.
For one, the world population is growing, which creates more demand to feed, house, and entertain the people on Earth. Research suggests that the world is using ten times the amount of resources today as we did in 1900. It’s expected to double again by the year 2030.
To complicate things, resources aren’t distributed evenly around the globe. Some countries that experience high levels of population growth may not have the resource availability to meet their increasing requirements.
Or, as scarcity causes massive price fluctuations on important commodities like oil and food, some import-dependent regions (like Europe) are faced with the often forgotten downsides of existing in a global marketplace.
Resource use around the world
You might be surprised to find out that resource utilisation in developed countries has actually stayed relatively stable in the last five decades. For example, people living in the EU consumed roughly the same amount of energy as they did in the late-1970s.
In that same time, economic output per person has more than doubled. That means that energy efficiency has gotten better.
If you’ve been waiting for a downside, here it is. It becomes troubling when you compare the different rates of energy usage around the world.
If, for instance, developing countries were to adopt similar production and consumption behaviour as developed regions, there could be a huge impact on global resource demand.
If every country in the world experienced an increase to average energy usage comparable to EU levels, then we’d see a 75 percent increase in energy consumption globally.
Other regions are more notorious in their energy consumption. Bringing global energy usage compared to the United States, for instance, would imply a 270 percent global increase.
With the developing world set to grow rapidly in the coming decades both economically and in population size, those figures are troubling. The Sustainable Europe Research Institute (SERI) predicts the world will use twice as many resources in 2030 as it did in 2010.
Accessibility of resources
To make matters worse, some political decisions exacerbate resource accessibility. Some nations are particularly protectionist when it comes to their resources. That can be problematic for a global population that relies on important resources like crude oil. If oil stocks become restricted as politically unstable regions of the world lock them away, there could be price jumps and other shockwaves that could damage many industries and markets.
Alternative resource streams
If the world doesn’t want to be fighting over resources in the decades to come, then we need to develop some creative ways to meet our resource needs.
One good indicator that demonstrates that we are on track to experience a change in mindset is that investment levels in renewable energy grew by more than five times between 2004 and 2013.
Developing alternative resource streams is one of the leading ways that we can meet the growing intensity of the world’s resource demand.
Innovation and advancements in technology can also serve to expand our current access to resources we already know and love. New extraction methods like deepwater drilling for oil or extracting oil and gas from shale deposits are both examples of methods that were impossible just a half-century ago.
Consequences of resource competition
If the world continues on its current path, the growing competition for resources could have some unfortunate side effects:
- Resource prices may jump around more often. Spikes in resource prices can carry huge risks for import-dependent regions such as the EU.
- Economic development may be unfairly distributed around the world.
- Conflicts over existing resource stocks may become more common.
- The environment will suffer from the extraction, usage and disposal of resources.
Opportunities of resource competition
While the consequences are severe, global competition for resources can also open up new opportunities:
- We may witness a continued trend toward investment and innovation in greener technologies and renewable resources.
- Faced with the facts, new investments may lead to innovations that help us access previously inaccessible resources.
- Innovations may reduce waste from consumption activities or improve recycling techniques.
- We may be encouraged to better utilise non-depletable resources like wind and solar energy.
It’s important to remember that the global competition for resources isn’t a problem that will go away. Likely, it’ll only get more severe in the coming decades. Acting now to secure a future for ourselves will involve cooperation between industries and governments.
In almost all cases, a push toward new funding and investments in technologies can be the catalyst for innovative new ways to help reduce the downsides of global resource competition.
If you enjoyed this post about the effects of global competition, be sure to stick around for the next article in our series about global megatrends. Next up, we’ll look at the fragility of global ecosystems.