Addressing the Fault Lines in the Global Resource Economy
Past President of the Canadian International Council (CIC).
A new Chatham House report, Resource Futures, highlights the urgent challenges confronting our “resource-stressed” global economy and makes strong policy recommendations to the international community. The world economy has been struggling to navigate commodity price volatility, uneven investment in resource development, and the hazards of environmental degradation for some time. But growing global consumption of energy, minerals, fertilizer, and food – fueled not only by China and other emerging countries, but increasingly, by a new wave of developing countries, such as Iran, Vietnam, Turkey, and Thailand – will further complicate the political and economic landscape.
As Madelaine Drohan points out in the CIC’s recent report, The 9 Habits of Highly Effective Resource Economies: Lessons for Canada, resource-producing countries cannot rely only on exporting raw materials if they want to weather the blows of commodity market busts and the challenges of resource scarcity. Investment in industries that add value to the resource sector not only promotes more efficient production but also allows the resource-producing country to move up the global value chain.
While our report presents strategies for Canada to strengthen our resource sectors, this Chatham House publication takes a broader view, calling on 30 of the world’s significant resource producers, including Canada, to collaborate in identifying and addressing fault lines in the global resource economy. One fault line, of course, is the environmental impact of increased resource production and consumption. Many countries have put or plan to put a price on carbon; in 9 Habits, Madelaine Drohan argues that Canada should be one of them – our oil and gas sector will adapt. As Resource Futures points out, resource sectors will have to adapt to the more direct impacts of climate change – global temperature increases, rising sea levels, and extreme weather have major implications for mining and agriculture industries as we know them.
I met with the authors of the Chatham House report last week, and Madelaine Drohan spoke with them in the course of her research for the CIC’s 9 Habits report. As the CIC continues to encourage discussion and debate on Canada’s natural resource future, I urge Canadians to consider the thoughtful recommendations of the Chatham House report, and to explore their fabulous interactive feature.