Better resource stewardship is key to protecting the UK economy from the risk of rising global commodity prices, according to Green Alliance.
Research by the think tank reveals that world food prices have doubled and metals prices have trebled since 2003, and it warns that upward price pressures are likely to continue, increasing production costs and heightening environmental pressures.
“The only reliable way to reduce our vulnerability to future price rises is to improve how we manage and use resources,” said Julian Morgan, chief economist at Green Alliance. “We need to put resource productivity at the heart of economic and business decision making if we want to make the UK more resilient to volatile commodity markets.”
The research follows a report from the Ellen MacArthur Foundation, which also warns that the existing linear “take-make-dispose” economic model will put pressure on prices and increase volatility as key resources become scarcer.
“Without a rethink of how we use materials, elements such as gold, silver, indium, iridium, tungsten and many others vital for industry could be depleted within five to 50 years,” it says.
According to the report, the business case for moving to a circular economy is now compelling and is the best way to avoid these risks.
It suggests, for example, if manufacturers make mobile telephones easier to take apart and users were offered incentives to return devices that are no longer needed, the cost of remanufacturing a phone could be cut by 50%.
Closing material loops and regenerating natural assets are practical business strategies to “hedge” against the complex and interconnected risks of resource competition, commodity price volatility and changing consumer demands, says the report.
