Abstract
This chapter explores aspects of the relationship between the financial system and resource industries, starting with general criteria for sound investment and an overview of the various materials and resources that need to be distinguished. To this end, the focus is first placed on fossil energy commodities that do not lend themselves to management in a circular economy, before the metals and mining sector and its regulation are presented. The global transformation of energy systems presents an opportunity to phase out a non-circular industry and replace it with one that is characterised less by commodities for consumption and more by commodities for the manufacture of energy conversion equipment and durable investment goods. Combining the energy and mineral resource industries, the impact of the decline of fossil energy industries is discussed, including the implications for international trade, economic activity, public finance and the financial sector. The chapter concludes with the general argument that the financial system is affected by changes in the resource industries and their shift to a circular economy, and that it can facilitate that shift if the political, legal and regulatory framework is right. Finally, a suite of criteria for investment in support of resource sector transformation and the circular economy is proposed.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
AECOM Australia (ed) (2015) Energy Storage Study. A storage market review and recommendations for funding and knowledge sharing priorities. AECOM Australia, Sydney. Retrieved from http://arena.gov.au/files/2015/07/AECOM-Energy-Storage-Study.pdf (7 Jan 2017)
Angerer G, Buchholz P, Gutzmer J, Hagelüken C, Herzig P, Littke R, Thauer RK, Wellmer F-W (2016) Rohstoffe für die Energieversorgung der Zukunft: Geologie—Märkte—Umwelteinflüsse. München: acatech. Retrieved from http://www.acatech.de/fileadmin/user_upload/Baumstruktur_nach_Website/Acatech/root/de/Publikationen/Kooperationspublikationen/ESYS_Analyse_Rohstoffe_fuer_die_Energieversorgung.pdf (7 Jan 2017)
Auty RM (1993) Sustaining development in mineral economies: the resource curse thesis. Routledge, London/New York
Auty RM (1994) Industrial policy reform in six large newly industrializing countries: the resource curse thesis. World Dev 22(1):11–26. doi:10.1016/0305-750X(94)90165-1
Braungart M, McDonough W (2002) Cradle to cradle: remaking the way we make things. North Point Press, Berkeley. ISBN 978-0865475878
Carney M (2015) Breaking the tragedy of the horizon—climate change and financial stability. Speech at Lloyds of London on 29 September 2015. Bank of England, London. Retrieved from www.bankofengland.co.uk/publications/Pages/speeches/2015/844.aspx (7 Jan 2017)
Coady D, Parry I, Sears L, Shang B (2015) How large are global energy subsidies. IMF Working Paper WP/15/105. International Monetary Fund (IMF), Washington, DC. Retrieved from www.imf.org/external/pubs/ft/wp/2015/wp15105.pdf (7 Jan 2017)
G20 (2016) G20 leaders’ communiqué: Hangzhou summit, 5 September 2016. Retrieved from http://www.g20.utoronto.ca/2016/160905-communique.html (7 Jan 2017)
Global Witness (2017) Oil, gas and mining: corruption and fraud in the oil, gas and mining industries keeps poor countries poor and props up brutal regimes. Retrieved from https://www.globalwitness.org/en/campaigns/oil-gas-and-mining/
ICMM (ed) (2007) Materials stewardship. Eco-efficiency and product policy. International Council on Mining & Metals (ICMM), London. Retrieved from hub.icmm.com/document/19 (7 Jan 2017)
IEA (ed) (2016) World energy investment 2016. IEA—International Energy Agency, Paris. Retrieved via http://www.iea.org/bookshop/731-World_Energy_Investment_2016 (7 Jan 2017)
IISD Reporting Service (2016) 2016 Annual general meeting of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)—the Sustainable Development Goals (SDGs) and Mining. 24–28 Oct 2016. Retrieved via http://www.iisd.ca/igf/agm/2016/
Jasch CM (2009) Environmental and material flow cost accounting. Springer, Dordrecht. ISBN 978-1-4020-9028-8
Khare A, Schatz R, Steward B (eds) (2017) Phantom ex machina: digital disruption’s role in business model transformation. Springer, Cham/New York/Heidelberg/Berlin. ISBN 978-3-319-44467-3
Klima NJ, Vander Beken T, Van Daele S (2009) Vulnerabilitat der Wirtschaft ffir Organisierte Kriminalitat. Vulnerabilitatsstudien zur Pravention am Beispiel der Abfallentsorgungsindustrie. Kriminalistik 1:28–35
Köder L, Burger A (2017) Umweltschädliche Subventionen in Deutschland. Aktualisierte Ausgabe 2016. Umweltbundesamt (UBA), Berlin. Retrieved from https://www.umweltbundesamt.de/sites/default/files/medien/2546/publikationen/umweltschaedliche_subventionen_2016_.pdf (7 Jan 2017)
Kraemer RA (2016) Twins of 1713: energy security and sustainability in Germany. In: Looney R (ed) Handbook of transitions to energy and climate security. Routledge, London/New York, pp 413–429. ISBN 978-1-857-43745-4
Kraemer RA (2017) Green shift to sustainability: co-benefits & impacts of energy transformation, vol 109. CIGI Policy Brief 109, pp 10. Retrieved from https://www.cigionline.org/publications/green-shift-sustainability-co-benefits-and-impacts-energy-transformation
Lazard (ed) (2016) Lazard’s levelized cost of storage—version 2.0. Lazard, New York. Retrieved from https://www.lazard.com/media/438042/lazard-levelized-cost-of-storage-v20.pdf (7 Jan 2017)
Lewis E, Pinchot AC (2016) Debunking 4 myths about sustainable investing. Retrieved from http://www.wri.org/blog/2016/12/truth-about-sustainable-investing-4-myths-debunked (7 Jan 2017)
Lovins AB (2012) A farewell to fossil fuels. Answering the energy challenge. Foreign Aff 91(2):134–146. Retrieved via http://www.rmi.org/Knowledge-Center/Library/2012-01_FarewellToFossilFuels (22 Jan 2017)
Lovins AB, Datta EK, Bustnes O-E, Koomey JG, Glasgow NJ (2005) Winning the oil endgame. Innovation for profits, jobs, and security. Rocky Mountain Institute, Snowmass. Retrieved via http://www.rmi.org/Winning%20the%20Oil%20Endgame (22 Jan 2017)
OECD (ed) (2015) OECD companion to the inventory of support measures for fossil fuels 2015. OECD Publishing, Paris. Retrieved via http://www.oecd.org/environment/oecd-companion-to-the-inventory-of-support-measures-for-fossil-fuels-2015-9789264239616-en.htm (7 Jan 2017)
Oekom Research (2013) Oekom industry focus: metals & mining. Oekom Research, München. Available via http://www.oekom-research.com/index_en.php?content=industry-focus
Ökoworld (ed) (2016). SRI- und Jahresbericht zum 31. Oktober 2015. Ökoworld Lux SA, Luxemburg. Retrieved from https://www.oekoworld.com/fileadmin/downloads_oekoworld/classic/jahresbericht_ovc.pdf (7 Jan 2017)
Randall T (2016a) Wind and solar are crushing fossil fuels. Record clean energy investment outpaces gas and coal 2 to 1. (6 April 2016). Retrieved from https://www.bloomberg.com/news/articles/2016-04-06/wind-and-solar-are-crushing-fossil-fuels (22 Jan 2017)
Randall T (2016b) The world nears peak fossil fuels for electricity. Coal and gas will begin their terminal decline in less than a decade, according to a new BNEF analysis. (13 June 2016). Retrieved from https://www.bloomberg.com/news/articles/2016-06-13/we-ve-almost-reached-peak-fossil-fuels-for-electricity (22 Jan 2017)
Ross ML (1999) The political economy of the resource curse. World Politics 51(2):297–322. doi:10.1017/S0043887100008200
Ryan J (2016, July 11) Fossil fuel industry risks losing $33 trillion to climate change. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2016-07-11/fossil-fuel-industry-risks-losing-33-trillion-to-climate-change (7 Jan 2017)
Sussams L, Leaton J (2017) Expect the unexpected: the disruptive power of low-carbon technology. Grantham Institute at Imperial College London, London. Retrieved via http://www.carbontracker.org/report/expect-the-unexpected-disruptive-power-low-carbon-technology-solar-electric-vehicles-grantham-imperial (5 Feb 2017)
Task Force on Climate-Related Financial Disclosures (TFCD) (ed) (2016) Recommendations of the task force on climate-related financial disclosures. Financial Stability Board (FSB), Basel. Retrieved from https://www.fsb-tcfd.org/wp-content/uploads/2016/12/16_1221_TCFD_Report_Letter.pdf (7 Jan 2017)
Trucost (ed) (2013) Natural capital at risk: the top 100 externalities of business. Trucost, London. Retrieved from https://www.trucost.com/publication/natural-capital-risk-top-100-externalities-business (7 Jan 2017
Vinci S, Nagpal D, Parajuli B (2017) Accelerating off-grid renewable energy—key findings and recommendations from IOREC 2016. International Renewable Energy Agency (IRENA), Abu Dhabi. Retrieved from http://www.irena.org/DocumentDownloads/Publications/IRENA_Accelerating_off-grid_renewables_2017.pdf (5 Feb 2017)
Zalasiewicz J, Williams M, Waters CN, Barnosky AD, Palmesino J, Rönnskog A-S, Edgeworth M, Neal C, Cearreta A, Ellis EC, Grinevald J, Haff P, Ivar do Sul JA, Jeandel C, Leinfelder R, McNeill JR, Odada E, Oreskes N, Price SJ, Revkin A, Steffen W, Summerhayes C, Vidas D, Wing S, Wolfe AP (2016) Scale and diversity of the physical technosphere: a geological perspective. Anthropocene Rev 4:1–14. doi:10.1177/20530196166777431. Retrieved from http://anr.sagepub.com/content/early/2016/11/25/2053019616677743.full.pdf+html (7 Jan 2017)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer International Publishing AG
About this chapter
Cite this chapter
Kraemer, R.A. (2018). Financial System, and Energy and Resource Husbandry. In: Lehmann, H. (eds) Factor X. Eco-Efficiency in Industry and Science, vol 32. Springer, Cham. https://doi.org/10.1007/978-3-319-50079-9_8
Download citation
DOI: https://doi.org/10.1007/978-3-319-50079-9_8
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-50078-2
Online ISBN: 978-3-319-50079-9
eBook Packages: Earth and Environmental ScienceEarth and Environmental Science (R0)