Steven B Kurtz

Economic Dematerialization - Myth or Reality?

By Steven B Kurtz

As global investment flows have pumped up information technology (IT), artificial intelligence (AI), e-trading and e-retailing, many planners claim that Canada's economy is undergoing a paradigm shift. Their view of the future no longer includes natural resources as a significant factor. I believe many are hypnotized by the paper profits of portfolios and the media coverage given to the new fast money crowd. Energy and materials required for the 'new' economy are not ethereal; they are largely non-renewable and caloric. And the more wired or connected the world gets, the more energy dependent it becomes.

Obsolescence in computers, TVs, and myriad other electronic devices usually difficult to recycle, results in replacement and discard. New homes have more gadgets than ever before, with automation designed into every conceivable function. Human calories for labor and decision making are replaced by energy from other sources. Petroleum-derived manufactured materials, glass (with its high caloric input), and refined metals of all sorts are material components of hi-tech. Energy heats, cools, lights, cleans, transports, stores data, communicates, advertises, registers sales, and operates the devices in factories, stores, and homes.

Agriculture, medical technology, pharmaceuticals, household and industrial chemicals, newspapers, and indeed most manufacturing businesses are examples of energy- and material-intensive industries. Tourism relies on transport, hotels, restaurants, entertainment, and attractive urban and rural environments. Virtual realities are poor substitutes for being there; and as already mentioned are not delivered without matter and energy consumption. Cradle to grave analysis of products and services includes input components and externalized costs (such as noise, heat, water and air pollution). Add to that the disposal process, and the results can be surprising. Even recycling takes a lot of energy.

Canada has already severely damaged its fisheries - an increasingly valuable resource worldwide - due to shortsighted planning. Timber, water, minerals, energy, agriculture, and tourism are vulnerable if R&D ignores them. Self-sufficiency is in the national interest as a complement to globalized trading. Scarcity (rarity) drives relative value. There is a horse race between the prices of spring water and gasoline. A year ago, water cost more, with the positions currently reversed. Canada is fortunate to have relatively large supplies of both.

Recall that digital watches cost $200 when they first appeared in stores, and that many now sell for under $10. Cheap materials and energy permitted supply to meet demand; and there is a point of saturation for particular devices. Planning for the future must include both of these variables.

The Rocky Mountain Institute in Colorado (http://www.rmi.org/), is an example of cutting edge research in clean, low input and output technological economics. Smart development, not growth at all costs, will provide for sustainability as well as competitive advantage. The Scientific and Industrial Research Organization of Australia (http://www.csiro.au) is an example of the kind of integrated research effort that would most benefit Canada. Don't turn your back on natural resources, but use them to the best advantage for the future of all Canadians.

Steven Kurtz is a member of The Canadian Association for The Club of Rome. He

was an Assistant Director of Merrill Lynch International Bank during a 25-year career in financial derivatives. He now does research and volunteer work in Ecological Economics and Sustainable Futures with several organizations.