Resource Efficiency -- The Underestimated Topic of the G7 Summit

06/08/2015 07:45 am ET | Updated Jun 08, 2016

A wonderful Bavarian castle provides the photo backdrop for the G7 Summit. Of course, the classical issues of economy and foreign policy will take center stage, for example the Ukraine crisis and Greece. However, there are other subjects on the agenda as well. One of these "also ran"-topics is resource efficiency.

Resource Efficiency -- A Demand for the Near Future

In order to retain their competitive edge for the future, industrialized countries such as Germany will have to fundamentally rethink their policies. Since resources are finite and constantly increasing in cost, we will have no choice but to make more of what we have. The old disparity between Old Economy and Green Economy must be addressed. What will the future look like once we have faced the challenges of dwindling resources? Doesn't one go hand in hand with the other? What a shame that this is only a sub-item on the agenda in Elmau. It should be a top priority, as it affects so many areas of politics.

Resource Efficiency Itself is the Commodity

Resource efficiency is also our way out of the throwaway society. Resource efficiency is probably the greatest reserve of commodities we have -- raw material that abounds everywhere: on average, consumers in industrialized countries buy a new cell phone every 18 months. Millions of old phones are collecting dust in drawers and cellars.

Germany, host of the G7 Summit, is a country of few primary raw materials, but lots of secondary ones -- meaning those that might be reclaimed through recycling. That is why we really have no alternative than to collect old gadgets and recycle them. The fact that these reclaimed materials then no longer damage the environment is a welcome side-effect.

Resource Efficiency is Environmentalism

Circular flow economy is not really new. To many, resource efficiency seems like a bit of a "forgotten principle." When it is mentioned at all, it is often merely to discuss the ratio of warmth and light emitted by a light bulb. Or that cooking with the lid on the pot saves a lot of energy. Of course it always has a whiff of "My mother told me..." That, however, makes it no less correct! Environmentalism as a thrifty way of using what one has is an old virtue, one that has long been a core subject of conservatives. Environmentalism is more than making everything green.

Resource Efficiency is Foreign Policy

Resource efficiency is not only relevant in making products cheaper, but also in decreasing dependence -- especially in the digital age. After all, digitalization always means hardware running ever more genius software. And all digital appliances are made, at least in essential parts, from rare earths. "95 percent of these rare earths are mined by China." Therefore, we are highly dependent on a source whose interests are unambiguous.

Thus, it requires little imagination to envision that the price curve of such commodities may develop in a way seen during the oil crisis of the 1970s. Thus, the price of the metal dysprosium rose 40-fold between 2006 and 2011. After the World Trade Organization WTO examined Chinese export quotas and high prices attracted a few new competitors who established a market presence, prices relaxed.

Resource Efficiency is Comfy Living

Of course, resource efficiency also means that we have to think about where and how we want to live. In what buildings? What do they have to look like? How do they have to be insulated? And that raises the question: What does comfy mean these days -- or rather, toasty? Given the fact that we will be 8 billion people soon, we simply must reconsider how we live. That is another reason for haste when implementing resource efficiency.

Resource Efficiency through Innovation

Innovations, and especially digital technology, can help us use our commodities more sparingly, thereby taking less of a toll on the environment. New appliances are often more energy-efficient, and there are aids to measure and optimize our consumption.

The experience we have gathered, regarding for example the fleet consumption of cars or the ban on light bulbs, has taught us that politics have to set standards and goals in order to inspire innovation.