New Index Attempts to Measure Excessive Resource Use

New Index Attempts to Measure Excessive Resource Use

By Waleria Schuele, Mercator Fellow

Living within planetary boundaries is imperative on a planet with finite resources. But in 2015 we seem far from meeting this imperative. If everybody led the lifestyle of an average American, we would need five earths to provide the natural resources needed, according to a calculation from the Global Footprint Network, a think tank that monitors countries’ ecological footprint. So far, the consumption rates in industrialized countries have been balanced by countries like Bolivia or Angola, whose biological capacity far exceeds their present consumption rates.

But as more countries catch up in industrial development and adopt more consumption-driven lifestyles, the more we will overstretch the natural limits of our planet. Already, humanity now uses the equivalent of 1.6 planets in resources. This means that it takes the earth 1.6 years to regenerate the resources that we use in one year, a disproportionate phenomenon that is expected to grow as more countries industrialize.

There is a growing awareness among political decision-makers that we need to take action to accommodate the resource needs of a human population that is expected to exceed 9 billion by 2050. Yet that awareness still needs to translate into political action. “Excessive resource use is at the core of our most pressing problems today, including climate change and biodiversity loss. However, we do not have a single international convention regulating how we use natural resources,” says Bas de Leeuw, managing director of the World Resources Forum (WRF), which took place Oct. 11-14 in Davos, Switzerland.

To stimulate political momentum, the WRF has launched its flagship project, which aims to develop a Resource Efficiency Index to measure how efficiently nations use their resources. A first discussion paper was presented during this year’s WRF.

“We measure the economic development of nations with the GDP and human development with the Human Development Index [HDI]. But we do not contrast these measurements with the resources that countries consume to get to their respective level of economic and human development,” explains Arnold Tukker, director of the Institute for Environmental Sciences at Leiden University and lead scientist for the Resource Efficiency Index. That index could close this gap by spotlighting which nations are more resource-efficient in achieving a high gross domestic product and high human development. In short, good quality of life for their citizens.

The Resource Efficiency Index will aggregate three categories of resources: land, water and materials. The task is ambitious, considering that most products we consume are shipped across the globe before they reach us. The amount of water and land used at production sites in distant parts of the world is normally invisible when everyday products reach our shores. “That is what we want to make visible,” says Tukker. “Simply put, we will look at a final product like a car and then count backwards, in terms of what resources have been used to create this product.”

The data will be taken from large databases like Exiobase, one of the world’s most ambitious databases, which was developed to analyze the environmental impacts of the globalized economy.

The collection and selection of data is only one of the many challenges the index will need to overcome. Picking the right calculation matrix is another one. A number of different scientific schools passionately defend their own matrix as the most appropriate one. In anticipation of the debate, Tukker conducted test calculations with five alternative matrixes.

The outcome came as a surprise. Notwithstanding the underlying formula, the results proved to be very similar. Australia, Luxembourg, Canada and Finland always came out as the top four resource-inefficient countries, Tukker showed during his presentation at the WRF.

“In the end, we don’t need to produce 100 percent exact results as long as the general direction is clear,” says Friedrich Hinterberger, founding president of the Sustainable Europe Research Institute and a contributor to the paper.

The Resources Efficiency Index, like the GDP and HDI indexes, has to work with simplifications. It needs to deliberately exclude certain parameters to be functional. For example, it will leave out the impacts on human and ecosystem health from the resource extraction process.

“We do not think it is dangerous that we left out the human and environmental impacts of resource extraction in our calculations,” says Hinterberger. “One could always include more elements. But this easily becomes a pretext for not doing anything at all. We think it is more important to get going with the resource efficiency debate. It is time to act.”

Others agree that it is more important to have some sort of index, even if it’s imperfect.

“Even if one disagrees with the methodology, it remains a fact that resource use needs to be at the forefront of the political agenda,” says Mathis Wackernagel, president of the Global Footprint Network, one of the most well-known think tanks in the field. “If the Resources Efficiency Index wants to succeed, it needs to communicate clearly which question it wants to answer. It needs to convey a simple message, and people need to understand how it can be used.”

“The index could be applied in various ways. For example, it could reinforce arguments for higher taxes on resource use,” suggests Hinterberger. “Tax resources, not labor” was a recurring suggestion during various panels at this year’s WRF, an idea that suggests a tax system would incentivize the use of abundant and recycled materials instead of scarce ones.

At this point, the Resources Efficiency Index is still a work in progress. But Tukker’s team seems to have shown that there could be a simple way to express nations’ resource efficiency, a central question of the 21st century.

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