Talking bout a revolution

I see that a new 'resource revolution' has started whilst my attentions have been turned elsewhere.

To me, it looks like the same old story around material scarcity and how this might drive an increasingly circular economy (which has certainly now taken hold as the concept du jour). Regular readers will know I don't find this story particularly compelling as the relative prices of resources remain low in historic terms. Stuff continues to become cheaper relative to people, a long term trend which I cannot see reversing.

Instead, I think that higher regulatory demands will continue to drive higher levels of material recovery and push increasing amounts of recyclate back towards the productive economy. On the demand side, the increasing repatriation of reprocessing and manufacturing is more likely to be driven by global factor price equalisation than anything else.

Having said that, there does seem to be a lot of interesting stuff (led by the Ellen MacArthur Foundation) going on around designing new products for a circular economy. I suspect that this could prove to be effective in the long term if waste disposal costs are driven sufficiently high (by government and regulator intervention) thereby driving extremely high material recycling rates.

One thing is for sure though, intervention which leads us increasingly towards a circular economy will involve higher costs to consumers and waste producers. For me it is questionable whether this is necessary. As I have said before, if material scarcity really is a major concern, then the simple market dynamics of demand and supply will address this issue without the need for government intervention.