Green Growth Standards
Future-Proofing the Economy
We have become so good at extracting resources from the Earth that we’re now extracting at three times the rate that we did in 1970. Demand is increasing as emerging economies mature. By 2025, global consumption will reach $62 trillion, twice as much as in 2013.
But are these resources unlimited? Is this a sustainable path?
Unfortunately, this demand for materials and increased efficiency in extracting them adds up to about half of the world’s carbon emissions and more than 90 percent of its biodiversity loss.
Biodiversity, the variety of all living things on the planet, has been declining at a troubling rate in recent years because of the human impact in such things as land use changes, pollution, and climate change. The National Wildlife Federation, for one, has called it a “biodiversity crisis.”
And in 2019, the UN released its Global Resources Outlook, which is a report on the use and management of natural resources around the world. This report has a lot to do with how resources are being extracted, the volumes that are being extracted, and the environmental and social effect that comes with the extraction process.
“Historical and current patterns of natural resource use are resulting in increasingly negative impacts on the environment and human health. Resource extraction and processing to materials, fuels, and food make up about half of the total global greenhouse gas emissions, biodiversity loss, and water stress,” notes the report.
So what’s coming next?
Markets for green products are growing significantly faster than conventional products. Environmental agencies and governments are focusing more and more on the impact that resource extraction has on wildlife and the environment. And beyond the environment, there is increased public awareness of the social implications of extracting resources in poorer countries, including potentially exploitative actions that can result in corruption within the local governments and lower safety standards in extracting resources.
Consumers are also moving beyond being focused on value alone when they shop. Many are becoming increasingly concerned about whether their ethical and political values are reflected in what they choose to buy. Every aspect of the products we consume has become more scrutinized with regard to greenhouse emissions and impact on environmentally sensitive land from manufacturing to transportation and to the starting point of extraction.
It doesn’t take much work to find images of clear cut forests or open-pit mining that stem from resource extraction. All of this comes back to a harder look at the supply chain, especially its first point, extraction.
But it’s not all gloom; back to our Global Resources Outlook, the report also offers the following: “Through a combination of resource efficiency, climate mitigation, carbon removal, and biodiversity protection policies, it is feasible and possible to grow our economies, increase our well-being and remain within our planetary boundaries, but action must begin now.” The report points to the opportunity to slow the impact of industry on the environment and people. The popular umbrella term for these efforts is called sustainability.
Governments around the world have taken increased actions to encourage companies and businesses to try to make their processes more environmentally friendly or “green.” And one of the biggest tools that governments have at their disposal is economic stimulus through investments in processes and subsidies for innovations to transform the supply chain as a whole, including extraction processes.
The Biden administration recently announced its green manufacturing push which includes an $8 billion initiative for regional clean hydrogen hubs that will advance the fuel’s production, processing, delivery, storage and end-use. If you’re not familiar with the term, hydrogen energy is created when hydrogen reacts with oxygen atoms in a battery-like fuel cell to produce electricity. “Hydrogen efforts will be particularly important for hard-to-decarbonize sectors and processes, including steel manufacturing,” The Hill reports.
The result of this increasing government involvement and oversight is that more and more industries are moving to make sustainability a priority, which can have several benefits including getting ahead of government-mandated standards, meeting increasing pressures from investors for transparency, and ultimately maintain stability and profits.
Certification and labelling for voluntary sustainability standards have become a market tool for promoting green trade and a greener supply chain. These labels identify sustainable products for consumers, and producers are remunerated for the extra investment that sustainable production often needs.
Among 2,000 of the biggest companies in the world, nearly 20 percent of them now have net-zero targets. To put that in perspective, these companies represent sales of about $14 trillion. This also includes companies representing household goods, big industrial firms and big tech, to name a few.
These companies are taking it upon themselves to enact specific social and environmentally voluntary sustainable standards, and a big part of that push for sustainability comes from examining supply chains that go into a company’s products and services. And a large part of any supply chain is the extraction processes that anchor them.
To help meet these sustainability standards, more companies in the extraction industry, such as mining, are turning to innovations to find more green ways to extract minerals from the earth.
Take lithium for example. As our world becomes more driven by smart devices and machines, people are looking to lithium to help power all kinds of electronics, including cellphones to electric cars. And, as a result, the demand for lithium is rapidly increasing.
In the south of England, a company called Geothermal Engineering Limited, or GEL for short, is exploring how lithium can be extracted through geothermal waters. In a really oversimplified way, the idea here is extract lithium from the naturally occurring geothermal water found in the rock formation with methods that leave a zero carbon footprint. This project is a collaboration with another company called Cornish Lithium. The goal is to then extract lithium hydroxide, which in turn is used in lithium-ion batteries.
GEL founder Ryan Law explains in an interview with CNBC how this process will work. “The combination of the granite rock being rich in lithium and hot water – hot water can absorb more lithium – means that the more water that we bring to the surface to drive our power plant has a very high lithium count.” So a very clean way to extract the element from the earth.
Another example of applying sustainability standards comes from finding ways to make general mining processes greener. One of the larger sources of greenhouse gas emissions come not from the actual removal of raw minerals from mines, but from transporting them from the mines in diesel powered trucks.
Potential solutions that are now being tried are trolley lines to move trucks using less power and cleaner power. Picture the overhead wires that trucks tap into to move along the haul road from the mine to where the materials are dumped. While this has been talked about since the oil crisis of 1970s, it has never really taken off.
Copper Mountain, a mine in British Columbia, Canada, which produces about 100 million pounds of copper per year, will become the first site in North America to start integrating a trolley system into a mining operation. The plan is to set up a 25kW trolley system over a 1 kilometer stretch of road. The company hopes to eliminate 400 liters (or about 88 gallons) of diesel per hour from the operations. The network will set up a system where four trucks will be on the line at a given time while seven others are loading or unloading elsewhere in the mine site.
And beyond trolley lines for trucks, there are also advances in automated charging systems that can provide up to 600kW of power for hauling trucks to reduce reliance on fossil fuels and at the same time boost efficiency in the mining process. There are also benefits to workers like reduced noise at the mine site.
When you think about it, the extraction process is the starting point for all supply chains. As more consumers and governments look closely at how materials are extracted and reducing the impact of this process, those companies that begin to take steps now will not only help build brands as sustainable but also prevent potential disruptions to operations in the future with new standards needing to be met.
Here’s the thing: “You never change things by fighting the existing reality,” American engineer and futurist R. Buckminster Fuller said. “To change something, build a new model that makes the existing model obsolete.”