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.

Len McCluskey. Photo: Getty
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Unite leadership race: What Len McCluskey's victory means

His margin is smaller than expected, but you only need to win by one. 

Come at the king, best not miss. And they did miss, albeit by a smaller margin than many expected. Len McCluskey has defeated Gerard Coyne, his Corbynsceptic rival, by 59,067 votes to 53,544 to remain as Unite's general secretary. Ian Allinson, running to McCluskey’s left, did surprisingly well with 17,143 votes.

A couple of things to note. The turnout was low – just 12.2 per cent – brought down by, among other things, the need to cast a postal vote and the view of the McCluskey camp that the smaller the turnout, the more important the payroll vote would be. But more significant is that Unite has shed about half a million members, confirming that it is anachronistic to refer to it as “Britain’s largest trade union”. That is, for the moment, Unison, a public sector union. (Unison actually had a lightly larger general fund membership by the close of 2015 but this decisively confirms that trend.)

The shift attests to the bigger – and neglected – story about the labour movement: that it is getting smaller, older, and more concentrated in the public sector. That’s a far bigger problem for the Labour party and the labour movement than who leads Unite or the Labour party.

That aside, the small margin is a shock – as I wrote last month, Unite is quite well-run these days, so you’d make McCluskey the favourite even before factoring in the ability of the incumbent to make life easier for himself. Most in the trade union movement expected McCluskey to win and win well for precisely that reason. As one senior official from another union put it: “Jaguar workers are earning more because of Len. That’s what it’s about, really.”

So the small margin means that Coyne may be found a role at the TUC and gently eased out the door rather than removed hastily. (Though the TUc would be highly unlikely to accept that arrangement.)Ian Allison, however, will be less lucky. One McCluskey loyalist said that the leftist would be “hunted with dogs” – not only was Allison expected not to do well, allies of McCluskey believed that he had agreed to tone down his campaign. Instead Allison's success contributed to the close-run result. (Unite uses first past the post to decide its internal contests.)

What does it mean for the struggle for control within Labour? Well, as far as the finely-balanced national executive committee is concerned, Unite’s nominees are elected at annual conference so any changes would be a way off, in any case.

The result does however increase the chances that Jeremy Corbyn will be able to stay on after a defeat. Removing Corbyn would mean handing control back to Tom Watson, with whom McCluskey's relations are now at an all time low. “I think there’s a feeling of: you came for me, you bastard, now I’m coming for you,” a trade union official says. That means that the chances that Corbyn will be able to weather a defeat on 8 June – provided Labour retain close to what one figure dubbed the “magic number” of 200 seats – have now considerably increased.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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