[Reader-list] world resources study

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Government review to examine threat of world resources shortage

Study commissioned following sharp rises in commodity prices on world
markets and food riots in some countries

    * Juliette Jowit
    * guardian.co.uk, Monday 31 May 2010 14.40 BST

Ministers have ordered a review of looming global shortages of
resources, from fish and timber to water and precious metals, amid
mounting concern that the problem could hit every sector of the
economy.

The study has been commissioned following sharp rises in many
commodity prices on the world markets and recent riots in some
countries over food shortages.

There is also evidence that some nations are stockpiling important
materials, buying up key producers and land and restricting exports in
an attempt to protect their own businesses from increasingly fierce
global competition.

Several research projects have also warned of a pending crisis in
natural resources, such as water and wildlife, which have suffered
dramatic losses due to over-use, pollution, habitat loss, and,
increasingly, changes caused by global warming.

Professor Bob Watson, the chief scientist for the Department for Food,
Environment and Rural Affairs, the leading department in the
initiative, said every sector of the British economy was directly or
indirectly vulnerable to future shortages.

These could be caused either by resources running out or becoming
harder to access because of geopolitical factors from war to tighter
environmental regulation on resources such as timber and palm oil –
the latter being found in an estimated one in 10 products, from
chocolate to cosmetics, sold in Britain.

"One of the roles of government is to provide information ... come up
with a shared vision of moving forward and working with the private
sector so we have competitiveness, a viable economy moving forward,"
Watson said.

AEA, the consultancy commissioned to carry out the study, said
resources at risk included timber, water, fish, precious metals and
minerals such as phosphorus, which is widely used in fertiliser.

One area of particular concern is "rare earth elements", important for
defence and many green technologies from low-energy lightbulbs to wind
turbines, as well as industries as varied as electronics and lasers,
film and lighting, aircraft engines, nuclear reactors, and
pain-relieving drugs, Phil Dolley, AEA's resource efficiency director,
said.

Elsewhere, the US, the EU and Mexico have announced that they want to
bring a World Trade Organisation case against Chinese restrictions on
exports of nine key raw materials, including coke, bauxite, magnesium
and fluorspar, all important for producing steel, aluminium and other
chemicals.

Resources under scrutiny by the UK government do not include the
already heavily studied oil industry, nor ecosystem services such as
flood defences, but the range was still "vast", Dolley, said.

"It's a hot topic because other countries are also thinking of this
[and] doing a lot of work," he added.

For years, experts have warned of the threat of peak oil to both the
world economy and international political stability if countries go to
war to secure access to fossil fuels.

However, there is now also increasing concern about a range of other
resources, including a report by the World Business Council for
Sustainable Development in December that the European commission has
commissioned a review of 49 strategically important resources it
believes are at risk.

Among the countries known to be stockpiling resources, Japan has said
it is storing supplies of seven rare metals it believes are "essential
to modern life and industry".

Writing in the Wall Street Journal earlier this month, James Bacchus,
the chairman of the WTO's appelate body, said China was also "hoarding
rare elements and other raw materials", but so were many other
countries and there had also been a "sharp increase" in actions to
protect national resources worldwide.

The international affairs thinktank Chatham House, which is carrying
out its own review into the resource crunch, has also compiled a list
of deals signed by Chinese state-owned companies for special access to
oil and gas reserves and the purchase of stakes in oil and coal
producers covering South America, Australia, Russia and the Middle
East.

The Guardian has also reported on the growing trend for buying land in
African countries to gain access to water and space for crops –
particularly by Chinese and Middle Eastern companies, sometimes backed
by their governments.

However there is not yet firm evidence that many resources seen to be
at risk will run out or be disrupted, or cannot be replaced or
supplemented by new supplies, Bernice Lee, Chatham House's research
director for energy, environment and resource governance, said.

For example, lithium – which will be increasingly in demand for
electric vehicle batteries – is mostly mined in Bolivia and Chile, but
there are vast supplies elsewhere if the technology can be found to
extract it at a reasonable cost, Lee said.

"It [the resource issue] is important because it's seen to be
important – countries are already imposing policies," she added.

AEA's initial report is due to be completed in the autumn, Dolley said.

In a written statement to the Guardian, the Department of Business,
Innovation and Skills, which is also on the report's steering group,
said: "The Department for Business looks forward to reading the report
from the AEA on the future of material resources.

"It is important to assess the long-term viability of resources to
help protect businesses in the future."