The Global Resource Nexus: The Struggle for Land, Energy, Goods, Water, and Minerals

While climate change researchers have studied extensively how natural resources such as gas, oil, minerals, water, and land are used, minimal attention has been paid to the links among these resources. The direct and indirect effects of resource use in different countries, particularly as resource scarcity is becoming a greater priority, makes up the global resource nexus. Philip Andrews-Speed of the Transatlantic Academy studies the links between resource scarcities around the globe.

He presented his research at the Carnegie-Tsinghua Center for Global Policy, focusing primarily on the rising demand for resources and how failure in effective governance and collective action can result in scarcity. Carnegie-Tsinghua’s Wang Tao hosted and moderated the discussion. 

How Each Resource Is Connected in the Global Resource Nexus

• Land: The degradation of local ecosystems, along with changing rainfall patterns, has resulted in less land available for agricultural use, Andrews-Speed explained. Fertilizers and overuse have in particular sped up the degradation of land. The consequences are two-pronged: pollution of soil and water and insufficient land for growing food. Andrews-Speed posited that a food shock is likely to occur in the future. He cited China’s agricultural sector to exemplify the consequences of intensive land use coupled with water and energy waste and severe soil acidification.
   
• Energy: Numerous potential conflicts exist over energy resource acquisition and energy security, especially in the Middle East, Andrews-Speed continued. North America, Europe, and in particular, Asia rely on the Middle East for oil. The rise in Asia’s conspicuous consumption has resulted in motor vehicle ownership in nations where the population numbers in the billions. Andrews-Speed noted that this heavy reliance has fueled interest in finding alternative sources of more environmentally-friendly resources. In particular, expanding the natural gas market has become a priority for many countries.
   
• Water: Andrews-Speed stated that fresh water could become one of the most disputed resources in the near future, especially in Asia and Africa. Environmental degradation in Asia has exacerbated the water scarcity problem. He noted that China’s freshwater supply is decreasing each year. Political tensions have arisen between China and some South Asian countries due to China’s consumption of the freshwater upstream, especially with the Mekong River. Andrews-Speed compared this to North Africa’s dependency on the Nile River for irrigation and electricity. How the Nile’s fresh water is used has caused disputes between the nations, he pointed out.

Impact on Human Security

• Migration and Urbanization: Competition for natural resources has spurred migration within and across China’s borders. Andrews-Speed explained that this number of “environmental migrants” is expected to grow. He added that over the past twelve years, walls, fences, and other barriers have increased due to the strain of migration on natural resources. Massive urbanization also creates a new problem for the global resource nexus since water supply and food production cannot match the demand of these growing cities. As a result, Andrews-Speed argued, competition between cities and regions for resources has increased. 
   
• Governance: Andrews-Speed also pointed out that poor governance in natural resource acquisition and use has further exacerbated the increasing demand for natural resources. He explained that there is no actual scarcity of natural resources, but rather a lack of good governance has created this scarcity through irresponsible resource redistribution or wasteful practices. In some areas where governance is especially poor or nonexistent, this scarcity has led to wars and violence. This scarcity problem, Andrews-Speed further stated, is compounded by an ongoing land rush in some regions such as Africa where major corporations are buying up vast amounts of land and eliminating access for locals. 

The Chinese Context

• South China Seas: While Andrews-Speed’s research on the global resource nexus focused on the transatlantic community, there remain significant implications for China regarding the South China Seas. Many natural resources and trade routes lie in the South China Sea. Andrews-Speed pointed out that the large number of economies relying on this region’s fisheries and the resulting territorial disputes over the Spratly Islands have only further increased political tensions for China. Failure to resolve these differences will only exacerbate the fight over the scarcity of natural resources in Asia, resulting in possible trade disruptions. 
   
• Urbanization: Andrews-Speed pointed out that one of China’s main challenges in addressing resource scarcity is urbanization. While measures have been taken to regulate migration from rural to urban areas, China’s cities are still overpopulated and polluted. New city building schemes have been developed to make cities safer and cleaner, but China’s top priority remains economic growth. Andrews-Speed explained that this means that the environment will continue to take a back seat with continued environmental degradation increasing resource scarcity and social tensions in China.

Potential Solutions

• 3 “I’s”: Andrews-Speed’s research identified three new dimensions of scarcity which governments need to address: information, integration, and the internalization of externalities. In global resource markets, he explained that there is a severe lack of information going up and down supply chains. In addition, the information available is unevenly distributed among industries. Barriers to the integration of these different markets also add to the inefficiencies of cross-border relations and trading. Andrews-Speed argued for internalizing externalities, or re-shifting the social, economic, and environmental costs of production of natural resource commodities back onto firms.
   
• Engaging New Players: Emerging powers such as India, China, and Brazil are all experiencing economic growth and therefore increasing their dependency on the world’s natural resources to sustain growth. In addition to these emerging powers, Andrews-Speed acknowledged the role of multinational firms in global resource markets. He advised that finding mutual interests and working to find mutual benefits should be a priority for nations and industries with a stake in the global resource market.
   
• Better Global Governance: Some audience members inquired about how best to govern global resources. Andrews-Speed responded that certain issues may require different levels of governance and presently, regional cooperation may be the best solution. However, he did point out that global supply chains that are transnational and move throughout multiple regions need global governance. Andrews-Speed did not believe that a global government was the answer, but rather increased global cooperation can happen through improving existing institutions and forming new ones where institutions are missing.