What is meant by ‘a low resource economy’? How much is ‘enough’?
As we saw with waste, there is a difference between the ‘efficiency’ with which we manage waste and the quantity of material that is there to be managed. Having briefly considered the kinds of factors that need to be considered when pondering ‘resource efficiency’, the second dimension is to consider - how much resource do we actually need? What is a ‘low resource economy’?
The simple part of this question refers to material resources. Whilst there may be debates about the precise timescale over which resources may be depleted - arguments rage, for example, about the timing of ‘peak oil’ - there is no gainsaying the fact that we inhabit a finite planet. The more rapidly we use up any given natural resource - whether it is coal, oil or indium - the fewer years' supply of that resource there must inevitably be.
In some cases - coal, say - even the growth of the world‘s population and the still more rapid growth of the economy mean that humanity still has several centuries’ supply of coal upon which it can rely. By contrast, in the case of indium - a rare metal of which few people have heard but which is ‘mission critical’ to the manufacture of flat screen televisions - a crisis of availability saw its price rise from $60 per kilo to more than $1,000 per kilo in the space of just a couple of years.
Economists have long argued that the price mechanism will ‘fix’ resource constraints: higher prices (caused by a shortage, or a perceived forthcoming shortage) will simultaneously suppress demand and increase the incentives for those considering investment in the development of alternatives to that resource. We don‘t need to worry, on this basis, because ’innovation' will always come to our rescue.
This is, increasingly, a challengeable assumption. The price mechanism does not capture many ‘externalities’ that could be central to a more strategic view of resource availability; and the market mechanism is - like human beings generally - myopic. Neither people nor markets are much good at thinking properly about the longer term and taking short term actions that only produce rewards in the longer term.
It becomes more complicated still when considering the other kinds of resources with which we could be concerned when thinking about a sustainable city. We may be persuaded that we should try to build an economy that makes reduced use of finite material resources, but what about human resources? Do we want an economy that relies less on human effort - or one in which more people are employed in meaningful activity?
Or financial resources - it would seem obvious that a very small number of people have a disproportionate share of these resources, while very large numbers of people have to survive on markedly less; but how much is enough?
This concept - enough - could well be the issue with which we are going to have to grapple in the years ahead. Recent months have, for example, seen the appearance of the notion of the ‘salary multiple’, the notion that the ratio between the highest and lowest paid individuals in an organisation should be subject to a limit: 20:1, or 10:1 or 4:1. (The current ratio for US corporations is ~500:1).
Is a ‘low resource economy’ one in which not only are we using a sustainable level of finite resources (implying, of course, a high dependency on renewable resources) but also one in which our institutions are good enough so that we can begin to relax and get by with ‘enough’ money?