As far back as the sixteenth century, Thomas More, the lawyer and later Lord Chancellor of England, described a strange country in which sheep devoured “the very men themselves”. With this unexpected metaphor, he was referring to the process of land enclosures whereby common land, traditionally used by all citizens for food and firewood, were fenced in. What was previously arable land was transformed into grazing land for sheep to feed the wool industry, and ultimately the landowners’ pockets.
The distribution of economic wealth has determined how natural resources are allocated for centuries; often, in turn, bringing about deep social and ecological shifts. More recently, thanks to the work of Piketty and his collaborators on economic inequality, the debate on wealth distribution has moved centre stage in both academic and political discussions. But how does inequality relate to the use of natural resources?
Today’s global economy requires an ever-growing supply of natural resources. However, the combination of resource depletion, environmental impacts at a planetary scale, and increasing international competition makes the worldwide distribution of natural resources a fundamental concern. We analysed the global inequality in natural resource use per capita and its links with international income inequality. We consider different physical indicators of natural resource use: carbon emissions, material flows (which include biomass, fossil fuels, metals and ores), and pressure on land-based ecosystems (through the Human Appropriation of Net Primary Production, or HANPP, indicator, which measures the biomass removed from terrestrial ecosystems for human purposes). In each case, we looked at the impact of international trade on directly traded commodities like petrol or timber, and on resources which are embodied in traded goods and services such as the crude oil used to make your plastic phone case, and the coal burned to power the factory in which the case was manufactured. Each natural resource indicator is thus measured from a territorial (national production, assuming no trade) and a footprint perspective (adjusted for resources embodied in trade).
For example, the territorial carbon emissions of a country are all those emissions within its boundaries, regardless of the final destination of the product or service produced. On the contrary, the country’s carbon footprint includes only those carbon emissions embodied in the goods actually consumed in that same country, including emissions embodied in imported goods and excluding emissions in exportations (consumed somewhere else). Therefore, the territorial indicators gives us a production perspective whereas the footprint indicator a consumption perspective. This enabled us to analyse both territorial and footprint inequality, demonstrating the role of trade in making natural resource use more or less unequally distributed.
Figure 1: Lorenz Curve
Carbon emissions, whether trade-adjusted or not, are far more unequally distributed than either materials or pressure on ecosystems. International trade does not affect the distribution of carbon emissions much (trade increases carbon inequality slightly when measured as a Gini coefficient). In contrast, the distribution of both materials and pressure on ecosystems (HANPP) change markedly through international trade – and in opposite directions. International trade has an equalizing influence on natural resource use measured as pressure on ecosystems (HANPP), but a markedly unequalizing influence on material use. This effect is so pronounced that it changes the ranking in inequality, with material use becoming more unequal than pressure on ecosystems when trade is accounted for.
The differences in international levels of consumption of natural resources can be linked to underlying national socio-economic or geographic factors. For instance, countries with higher natural endowments tend to extract more natural resources from their territory, and colder countries will, on average, use more energy for heating purposes. We considered six such underlying “drivers” of differences in resource use:
- income (GDP per capita)
- demographic structure (working age population)
- land area per capita
- urbanisation (% of urban population)
- national ecosystems productivity, and
- average climate.
Of course, these six drivers are themselves quite unequally distributed across the world’s countries. As a result, we can go a step further in our analysis, and decompose the inequality in each type of resource use into contributions from the inequality in the six drivers (plus a residual term). This means that the observed inequality in country’s resource use indicators, either trade adjusted or not, can be understood as the sum of the inequalities in the underlying drivers. For example, imagine that two households have very different energy consumption, one very high and the other very low. We all would agree that this difference in energy consumption is a consequence of differences in the size of the house, in the number of people in each household, in the kind of appliances used, and so on. So the energy consumption inequality could be decomposed in terms of all this drivers’ inequality. Our analysis did just that, but we considered inequalities across countries that could be behind countries’ resource use inequality.
Income is by far the most important factor in explaining the inequality in the material footprint, followed by demographic structure and urbanisation. From a territorial perspective, inequality in natural resource use is driven first and foremost by urbanisation, then land area per capita and demographic structure, with income inequality a distant fourth. The inequality in pressure on ecosystems, both territorial and trade-adjusted, is driven mainly by the country’s level of natural resources, or more specifically their ecosystem productivity. However, in the trade-adjusted case, the inequality is also affected by urbanisation and income.
Our research shows that the contribution of income to resource use inequality is always higher from a footprint perspective than from a territorial perspective (Fig. 2). This means that when trade is considered, and hence consumption (as opposed to production) is being measured, economic factors become more important in determining how natural resources are being shared internationally. The more unequally distributed income is across countries, the more it will contribute to resource use inequality across certain indicators. This is the case for all footprint indicators, and especially for carbon emissions and material use. Demographic factors, such as the proportion of active-age population, and urbanisation, also play key roles in explaining the inequality of carbon emissions and material use, both territorial and footprint. In contrast, for pressure on ecosystems, the contribution of income inequality is not strong enough to offset the link between these indicators and geographical endowments, such as ecosystems productivity. Resource endowment, in the form of area per capita, also plays a role in explaining territorial material use inequality.
In conclusion, international trade shapes the international consumption of natural resources, and economically-driven resource use inequalities are strengthened with trade. Demographic trends, such as population age and urbanisation, play as large a role as income in explaining the inequality of material use and carbon emissions. In contrast, the inequality in international pressure on ecosystems is mainly explained by national resource endowment, with trade playing a significant equalizing role in this case. Would Thomas More, considering this picture, still describe the sheep as devouring the men? It is clear that economic power shapes international flows of natural resources: however, there is not a 1-1 relationship, and different types of natural resources exhibit very different distribution and trade patterns. In a context of reaching and overstepping planetary boundaries, the influence of urbanisation and demographic trends (alongside the employment, manufacturing and infrastructure requirements they represent) might well deserve more prominent consideration.
Jordi Teixidó-Figueras, Julia K. Steinberger, Fridolin Krausmann, Helmut Haberl, Thomas Wiedmann, Glen P. Peters, Juan A. Duro, Thomas Kastner
International inequality of environmental pressures: Decomposition and comparative analysis
Ecological Indicators, Volume 62, March 2016, Pages 163-173
Photo: Billy Wilson via Flickr