More Holistic Views Key to Better Resource Management

Oliver Cann, Director, Public engagement, Tel.: +41 79 799 3405; Email: Oliver.Cann@weforum.org

• Divided views about the future of natural resources are preventing better resource management
• Understanding the drivers of future resource availability can create common ground among decision-makers
• Above-ground risks present more of a threat to natural resources than physical depletion
• Download the full report here

Dubai, United Arab Emirates, 10 November 2014 – The gravest threat to the future availability of natural resources comes not from their physical depletion but from above-ground risks and a lack of understanding of the drivers of resource scarcity. This is according to a new report, The Future Availability of Natural Resources: A New Paradigm for Global Resource Availability, released today by the Forum.

“A central reason for the world’s failure to effectively manage its water, food, energy and mineral resources is the existence of deep divides among stakeholders in this field, who tend to use similar data but distinct mental models to come to vastly different conclusions about tomorrow’s resource picture,” said Kristel Van der Elst, Senior Director and Head of Strategic Foresight at the Forum. Rather than sharing a common view on what causes resource scarcity, their mental models broadly fall into four polarized groups.

Adherents to the paradigm of “exhaustion and crash” argue that we are heading for dramatic shortages of key resources because growing demand is running into the natural boundaries that limit physical supply. Those concerned with “increasing costs” argue that while physical scarcity is unlikely, above-ground risks and rising complexity will lead to higher prices for end users. Advocates of “long-term abundance” claim that market efficiencies and technological innovations will always keep us one step ahead of scarcity in the long run. Those concerned primarily with “social injustice” argue that the main issue is not whether the world has sufficient resources on average; instead, we should be more concerned by the fact that marginalized populations are likely to experience critical shortages, possibly for extended periods of time.

If polarized views are a prime reason for the lack of effective resource management, “creating a shared understanding of future resource availability can be best achieved by overcoming common misperceptions of the drivers underpinning the issue,” noted Nicholas Davis, Director and Head of Europe at the Forum. The report is based on data analyses, interviews and workshops involving more than 300 global experts over three years. Five specific insights emerged:

• Economic growth is a far more powerful and certain driver of resource demand than population growth
• Other powerful drivers that influence the productivity and efficiency of resource use – including technology, preferences, policies and prices – are rarely included in resource models
• Interconnections between natural resources are becoming more evident and important, and the most interesting connections are not between physical resources, but between market, policy and social drivers
• In a globalized world, distribution is key to ensuring that asymmetries in the allocation of natural resources do not lead to global crises
• We need a better understanding of the extent to which environmental degradation and resource scarcity are connected and how mismanagement in one area can cause problems in the other

Taking these lessons into account, it is possible to construct a holistic understanding of what we may expect to be the resource availability picture of 2035. This picture is one of a world that has sufficient stocks of most resources at a global level, but which nevertheless risks running into resource crises because of local shortages. It is also a world where unfortunate decisions are made due to the increasing pressures of environmental change.

To illustrate these ideas and challenge existing perspectives, the report presents three scenarios that illustrate the perils of failing to overcome our long-term blind spots:

• Clash of interests depicts a world in which there are plenty of physical reserves of resources still available, yet the global resources system collapses as countries pre-emptively cut each other’s access to resources based on the anticipation of scarcity.
• Alarming abundance paints the picture of a world in which both fossil and renewable energies are overly abundant, which turns out to be a problem as it creates excess consumption and has detrimental effects on the exploitation of related resources, such as water. This scenario shows that having sufficient resources does not mean we can stop paying attention to how we manage them.
• Challenge of transition runs readers through the many challenges that will come from transitioning to a world more respectful of natural resources. It shows that although such a transition will not be easy, it is inevitable and we must therefore be aware of the difficulties so that we know how to deal with them.

When managing natural resources, we must assess the best available evidence and examine how different situations and responses might play out. This report is meant to help policy-makers and resource stewards transcend polarized discussions and perspectives, and take decisions that combine the latest knowledge and most innovative approaches in managing natural resources.

The Co-Chairs of the Summit on the Global Agenda 2014 are Sultan Bin Saeed Al Mansouri, Minister of Economy of the United Arab Emirates and Sami Dhaen Al Qamzi, Director-General, Department of Economic Development of the Government of Dubai.

Notes to Editors

The Host broadcaster for the Summit is Dubai Media Corp.

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