Extracting resources is an essential step that requires monitoring to avoid exploitation, which has led to greater environmental damage.

The supply of resources on our planet seems infinite and it is hard to believe that there are enough people living to consume all these resources. The reality is different.

Deforestation and the exploitation of natural resources on our planet have drastic environmental and social consequences in many regions. The extinction of species, the loss of biodiversity and desertification are just some of the many consequences of our actions. These are not just external problems either; many people have to flee from the consequences of climate change to other regions. In wealthy countries this is so far hardly noticeable, but in the long run the consequences of our actions will become obvious everywhere.

One would think that people have recognized the problem and are changing their behaviour, but so far there is not enough evidence of this. Countries often have to deal with other domestic issues, such as corruption, and the sustainable use of resources does not seem to be a political priority.

Fig. 1 clearly shows that global resource extraction is steadily increasing. The ever-increasing resource consumption leads to a worrying forecast. None of the four resource types described is expected to be extracted less in the future. On the contrary, resource extraction is expected to continue to increase in all areas until 2048. (Credit: EC JRC Raw materials scoreboard 2018)

Is Circular Economy Enough?

Circular economy has the ultimate goal of increasing resource productivity, which means saving resources. But higher resource productivity in production and consumption does not capture all the environmental benefits. Natural resources continue to be extracted and used, although to a lesser extent. The extraction of non-renewable raw materials contradicts a circular economy’s goal of becoming less dependent on the use of raw materials. However, the high demand for critical raw materials cannot yet be met by recycling and sustainable raw materials. A high energy demand in production and households additionally hinders a shift away from the use and extraction of fossil fuels. 

Overshoot Day: Earth Overshoot Day marks the date when humanity’s demand for ecological resources and services in a given year exceeds what Earth can regenerate in that year.

Expanding Measures In Europe

Resource extraction should decrease at European level through reduced energy and material requirements along the value chain. Taxation and regulation must be directly related to extraction, in addition to subsequent energy consumption, in order to increase incentives to generate electricity from renewable energy sources. In order to achieve the climate targets, incentives should therefore limit the extraction of non-recyclable and environmentally harmful resources at the beginning of the production process already. Extractors and producers will bear the environmental and social costs of the unsustainable activity associated with resource extraction. This would create incentives to increase resource productivity through sustainable design and recycling. 

A market-based instrument is, for example, a subsidy. Subsidies can increase the demand for sustainable products by favouring the market prices of activities with low externalities on people and the environment. A first step is the abolition of environmentally harmful subsidies. Removing them increases the costs of environmentally harmful activities and thus reduces the demand for environmentally harmful products. In return, the attractiveness of circular strategies is increased.  Early investments and educational measures could support the regions and industries most affected by the abolition of subsidies in order for them to benefit from the social advantages of reduced extraction. Furthermore, a higher tax on polluting activities would create incentives to reduce resource extraction and, in turn, to develop sustainable business models. Thus, a suitable European policy mix could increase the prices of primary raw materials and make secondary raw materials more attractive. In the past, due to increasing demand for raw materials, countries have made limited use of economic and regulatory instruments to restrict resource extraction and continue to source primary raw materials from countries with lower environmental standards.

Does The Green Deal Sufficiently Address A Reduced Resource Extraction?

Some of the European Commission’s plans do take resource extraction into account. The “New Action Plan for a Circular Economy” mentions a guideline for an environmental tax, but does not foresee any taxes or regulations, thus not taking into account any concrete measures to increase the price of primary raw materials.

There is no strategy to tackle the problem at a European level, instead it is left to the member states to initiate measures. This contrasts with the European Union’s intended consistent strategy and calls into question the credibility of decoupling economic growth from resource use. It becomes obvious that the European Commission intends to increase the demand for secondary raw materials, but is not prepared to restrict the extractors of natural raw materials. While the European Union still needs primary raw materials, the social and environmental costs of extracting natural raw materials should be addressed. Rather than promoting environmentally damaging activities, measures need to focus more on extraction in order to prioritise sustainable use and thus effectively decouple economic growth from the use of natural resources. An appropriate policy mix needs to be adopted at national and European level. 

The European Union as an alliance of wealthy states has the responsibility to reduce resource extraction worldwide. Reducing resource extraction in Europe alone is a good start, but resource extraction and its consequences cannot be a problem confined to one continent. Europe must act as a role model and support developing countries to move away from the enormous extraction of natural resources.

ARTICLES BY HANNES JAKOB DREYER ON CIRCULAR ECONOMY IN EUROPE ARE PUBLISHED EVERY FRIDAY. DISCOVER the other articles.

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