24 August 2012 - Over the next two decades, as many as three billion people will join the middle class, even as billions more live without electricity, modern cooking fuel, and safe and reliable access to food and water. Resources are becoming more scarce and more difficult to extract, and combined with environmental factors ranging from climate change to soil erosion, those changes will make meeting middle class demand all the more difficult while leaving the world’s poorest more vulnerable to price shocks and resource shortages. In a recent report, the McKinsey Global Institute concludes that nothing less than a “step change” in how resources are managed will be required if individuals, businesses, and governments are to overcome these trends and pave the way for a more sustainable and equitable future.

Scenarios for Future Production

“Meeting projected resource demand would require historically unprecedented increases in supply,” but limits to key and finite resources, especially water and land, make such increases unrealistic, authors Richard Dobbs, Jeremy Oppenheim, Fraser Thompson, Marcel Brinkman, and Marc Zornes write in Resource Revolution: Meeting the World’s Energy, Materials, Food, and Water Needs. What’s more, “the fact remains that rapid growth in supply can involve significant capital, infrastructure, and geopolitical risks and can have a negative impact on the environment.”

Meeting future demand will therefore require steps beyond simply increasing production levels. Production must become more efficient, and to this end the authors present a detailed list of 130 “productivity improvement opportunities” that, if realized, could meet up to 30 percent of demand for resources in 2030 and account for $2.9 trillion in additional “value to society.” While the list is lengthy, the top 15 suggestions account for three-quarters of expected savings, and some of them, like reducing municipal water leakage, would be relatively straightforward to accomplish. Others, however, such as changing transportation preferences to favor public transport and walking over driving, promise to be time-intensive and difficult to achieve.

And then there’s climate change to contend with. Even capturing all 130 productivity opportunities, which the authors admit is unlikely, “[it] still would not be sufficient to address climate change.”

For the complete article, please see New Security Beat.