Resource security isn't achieved by locking up commodities

We must strike at the root of resource insecurity, by demateralising our economy where we can.

Last week, Chatham House added to the drumbeat of concern about resources, declaring that "the spectre of resource insecurity has come back with a vengeance." In its dense, persuasive report, Resource futures (pdf), Chatham House's researchers diagnose the problems posed by increasing resource insecurity in detail, systematically identifying the causes of insecurity. This is an expansive analysis, and a major achievement, but the recommendations made in the report have the air of the outcomes of international climate talks: frameworks and processes to find solutions rather than actual solutions.

In researching the existing literature on material security as part of our work for the Circular Economy Task Force, we at Green Alliance have found that much of the debate about resource security has focused on two factors: raw material price volatility and the risk that international trade of raw materials will be restricted by nation states.

This reductionist framing of material security risk has artificially narrowed thinking about the underlying risks which foster price volatility and restricted access to materials. This, in turn, has limited the options we use to mitigate these risks.

Focusing on political risk has led to responses like land banking, in which countries and companies directly purchase foreign land to serve their resource needs; and raw material agreements, where countries sign contracts to trade raw material supplies for technology or infrastructure development. China, Japan, and Germany have all pursued these strategies in the last two years, for a wide variety of commodities ranging from food to metals.

Resource futures notes these developments and rightly shows how these and similar policies, including production subsidies, the actions of state owned enterprises, and market manipulation, have "fuelled the fire" of resource insecurity. It is clear that these strategies also have social drawbacks, but they are more fundamentally flawed because they deal with the symptoms of insecure resources, not the causes.

Getting to the bottom of price volatility and restrictions on raw material trade means understanding more about why we can't simply meet growing demand for resources the way we did in the 20th century: by expanding extraction. Absolute scarcity is rarely a hard limit. But across a whole host of materials, the rising environmental costs of production are a big part of the reason for volatile prices and restrictions on access to materials. Resource futures dissects these causes in discussion about "environmental faultlines", the "interconnected nature of the resource production system," and the risks embedded in the push to extract resources from "extreme environments" like the Arctic.

Chatham House has done a major service in moving debate on material security from symptoms to causes. But the juggernaut runs into the sand when it comes to recommendations, which stress that "collaborative governance is the only option" and prescribe rule-based resource governance, informal stakeholder dialogues, and multilateralism.

The report itself admits that "success to date [of political responses] has been patchy" for timber, "unsuccessful" for agricultural export restrictions, and "largely unsuccessful" in tackling price volatility for resources from oil to tin. It should come as no surprise that countries have therefore relied on unilateral measures which are politically insecure. The reasons for this, put simply, are that foreign land ownership or exclusive supply contracts merely cut the global resource cake into different slices, with larger proportions going to countries willing to pay, contract, or fight for a larger share of resources than they control within their borders. This enforced inequality isn't a durable solution. Ownership, contracts, and commitment to free markets fall by the wayside when resource prices spike, as examples like the restriction on Argentinian beef exports in 2006 – hardly a scarce commodity – show.

Multilateral governance is better, but it's not clear that it isn't just an attempt more fairly cut up the same cake. And this is the problem: Chatham House's analysis that the "fundamental conditions that gave rise to tight markets in the last ten years remain" means that their recommendations pit diplomacy against raw resource nationalism. As their own evidence shows, diplomacy hasn't succeeded in this struggle so far. It"s not clear why diplomacy will now succeed in "mitigat[ing] excessive politicization of resource markets and trade" in "markets [that] have always been political."

The truth is that multilateralism isn't enough. We must strike at the root of resource insecurity, by demateralising our economy where we can, but also by finding sources of raw materials which avoid the environmental risks underlying material insecurity. The circular economy represents one way of doing this. It's still more of a good idea than a plan of action, but without it we're stuck merely managing resource insecurity, rather than solving it.

A smelter shovels raw iron on a blast furnace in Germany. Photograph: Getty Images

Dustin Benton is a senior policy adviser at Green Alliance, leading the Resource Stewardship theme.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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