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close this bookIndustrial Metabolism: Restructuring for Sustainable Development (UNU, 1994, 376 pages)
close this folderPart 1: General implications
close this folder4. Industrial restructuring in developing countries: The case of India
View the document(introduction...)
View the documentIndustrial metabolism and sustainable development
View the documentIndustry and sustainable development
View the documentResource utilization
View the documentEnergy efficiency: An overview
View the documentEnergy use in Indian industry: A case-study
View the documentConclusions
View the documentReferences

Resource utilization

While such a posture would address the political concern for development in the South, it does not address the problem of depletion of non-renewable natural resources. The concept of "sustainable development" does certainly not preclude the mining of nonrenewables. A sustainable industrial policy for non-renewables, however, has to employ a different method of project appraisal. Since resource depletion may be treated as a social cost, a certain portion of the revenues from industrial projects should be invested in the creation of renewable substitutes, leaving aside an appropriate portion as disposable income. The income component would be higher either for a nonrenewable asset with a longer life expectancy or for a faster growing substitute (higher discount rate).

This principle, enunciated by El Serafy, does not imply a rejection of the notion of income as defined by Hicks. The idea is that even for industrial projects the net present social value (NPSV) may be calculated to take account of the depletion of non-renewables (Mikesell, 1991). In fact, such a novel measure of appraisal of industrial projects is still in its infancy, though industrial strategy may be built around this principle in the future.

For renewable resources, industrial projects should seek to maximize productivity of resource stocks over the long run. This means, for instance, that, to sustain pulp and paper industries in the long run, in addition to wellmanaged forests reserves of pristine forest are essential as reservoirs of biodiversity. The same goes for industries based on fisheries and biotechnology, and so on. In sum, sustainable societies would have to use the flows of resources rather than mine the stocks. This would help delink economic growth from the intensive use of environmentally significant resources - a process that has begun in some industrialized countries like Sweden and Germany (see Udo Simonis, chapter 3 of this volume).

Industrial material recycling, as discussed above, can perhaps best be seen as a process wherein the short-term throughput of virgin raw materials is minimized without sacrificing output. In the following, we will concentrate on short-term measures that are feasible, of which improvement in energy efficiency is an important and representative example.