7.6C - Middle-Class Consumption in Emerging Powers
Future-growth in middle-class consumption in emerging superpowers has implications for the availability and cost of key resources (rare earths, oil, stable grains and water), as well as for the physical environment.
Over the next 30 or 40 years resource demand in the USA and EU is likely to remain static. Most people are already wealthy and their demand for additional resources will be met by increasingly efficient use of existing resources.
In emerging powers, this is not the case. Pressure on resources has a number of causes:
- increasing population, especially in India, Indonesia and Brazil
- increasing wealth: the global middle class (people earning $10-100 per day) is expected to increase from 2 billion in 2012 to 5 billion by 2030.
These people will want more 'stuff', which increases demand for:
- Rare earths - 80-90% of global rare earth production is in China. This raises the possibility of shortages due to resource nationalism.
- rare earth metals (e.g. Scandium, Yttrium and Terbium) are widely used in electronic, medical and laser devices.
- Food - as China and India develop there will be increased demand for stable grains (wheat, rice). Demand for meat, dairy products and sugar will also rise as these countries transition to 'Western' diets.
- Oil - in 2015 the USA used 19 million barrels of oil per day, China 12 million and India 4 million. Indian and Chinese demand could reach American levels.
- Water - In the USA and EU washing machines, dishwashers, a daily bath/shower and swimming pools are common. This is not true of emerging countries, but vast additional water supplies will be needed if it becomes true.
Increased demand is likely to have two consequences:
- The price of key resources rises as higher demand puts pressure on supply
- The availability of resources, especially non-renewable ones, falls as some supplies are used up.
In addition, the rise of middle-class consumption will affect the physical environment:
- more mining, oil drilling and deforestation in the quest to access raw materials
- increased carbon emissions from higher energy consumption and more factories
- problems disposing of consumer waste in landfill sites and incinerators
- more use of water, and therefore more polluted waste water