Developing resource use scenarios for Europe

Chapter 1 of this report reviews a number of approaches to conceptualize and operationalize biophysical constraints for economic performance. The starting point is a scoping study by Cambridge Econometrics and Sustainable Europe Research Institute (SERI) that reviews a large number of macroeconomic models investigating their ability to provide information on the interlinkages between the economy and the environment required from a sustainability viewpoint. This scoping study yields two key recommendations for macroeconomic modelling: to incorporate resource use in the explanation of economic development, and to allow for non-linear relationships, thresholds and limits (Serice 2010). The report then turns to another useful approach from OECD that makes an effort to conceptualize causal pathways linking global environmental change (originally: climate change) to economic development via policy regulations, direct biophysical impacts and price effects on global markets (OECD/Martinez-Fernandez et al. 2010). The three types of effects are discussed. In a next section, insights from a report from the FP7-NEUjobs project are presented. In this project, a wide array of (mainly) natural science literature had been screened to identify "global megatrends" that would impact European economies and policy-making. Given far-reaching uncertainties and complex interrelations, the megatrends identified (i.e. energy transitions, rising challenges to resource security and increasing climate change impacts) are grouped to envision two future world contexts for Europe, a "tough" and a more "friendly" world. For the year 2025, the features of these worlds are sketched on the basis of a literature review (NEUjobs 2012). The chapter concludes that indeed the availability and use of natural resources provides a key link between economies and the environment, but that it is advisable to deal with them not one by one, but in a systemic fashion that takes into account their strong interrelationships on the one hand, and the high uncertainty of constraints of particular resources on the other. It concludes that the future of European resource supply may be expected to be fairly different from the past, and should be expected to change to the worse, both for environmental reasons and for reasons of strongly increasing international demand and competition. [...]