Green Economy in a Blue World-Full Report

with increasing wealth and various government and donor programmes promoting smaller families, fertility rates have fallen to or near replacement levels in many developed and increasingly developing countries, so the global population growth rate has slowed somewhat and world population is projected to plateau sometime this century at around 9-10 billion.Theadditional 2-3billionpeople will require continued enhancement in agricultural productivity and yields, particularly in Africa which to date has benefited the least from the green revolution. At present, themanufactured fertilizer industry produces about 100 million tonnes of nitrogen in fertilizer per year; China is the largest consumer at about 25.4 million tonnes per year (2002) (FAO STAT, 2012). Industry revenues are about US$80 billion per

in a Blue World

The sanitation ladder

Tertiary wastewater treatment

Sewer connection and secondary wastewater treatment

Connection to conventional sewer

Sewer connection with local labour

Septic tank latrine

Pour- flush latrine

Ventilated improved pit latrine

Simple pit latrine

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200

400

600

800

Extimated cost per person (US Dollars)

Source: UNDP, 2006

year (2009) with recent average after tax profit margins around 5 per cent. Annual global sales of fertilizer are projected to increase to US$150 billion per year by 2030 and US$227 billion by 2050. Today, 40-60 per cent of global crop yields are attributable to commercial fertilizer use and 40 per cent of all the nitrogen and phosphorus found in human food products are from artificial fertilizers. Statistics on commercial production and sales of organic fertilizer are not readily available at the global level but these are likely to be only a few per cent of the volume of manufactured fertilizer production. Notably, the fertilizer industry consumes 1-2 per cent of ALL global energy, from both the energy-intensive demand of Haber-Bosch on electricity consumption, and from the quantities of natural gas required to supply the hydrogen needed to combine with nitrogen gas and produce ammonia for fertilizer; the cost of natural gas alone can constitute up to 90 per cent of the cost of producing ammonia. Some 1-2 tonnes of CO 2 equivalent are emitted per tonne of ammonium nitrate manufactured from Haber-Bosch (Wood & Cowie, 2004). In recent years, European fertilizer producers have faced increased costs due to higher costs of imported natural gas, and higher electricity costs related to ETS emissions trading. One study estimated producer price increases of 21- 34 per cent on European fertilizer companies (Strait &Nagvekar, 2010); inahighly competitive market globally these cannot be passed on to purchasers. This extra burden of carbon and natural gas costs has already significantly hurt the competitiveness of European fertilizer

manufacture; more than half of fertilizer plants in EU-15 have closed in the last 20 years. 2.3 The economic case for greening the sector As an issue that cuts across several very large, established economic sectors – agriculture, waste-water management and fertilizer production – reversing eutrophication and ocean hypoxia presents a range of unique opportunities to create new cross-sectoral public-private and other partnerships aimed at using policy, regulatory, economic and financial incentives to move towardsmuchmore efficient and cyclic use of nutrient resources. The value of unrecovered nutrient resources (waste) that mostly end up in groundwater and our oceans is on the order of US$15 billion per year 1 , underscoring the underlying financial opportunity. Furthermore, the enormous socio-economic costs of nutrient pollution, hypoxia, and other impacts, compared to the more modest incremental costs expected to be associated with greening the nutrient economy suggests a very positive cost-benefit calculus which should further help to incentivize political support and government and other stakeholder action. Three key sectors, agriculture, fertilizer production and waste-water management will be impacted by a transition from the current linear approach tomanagingnutrients to amuch more cyclic approach involving substantial increases in efficiency, nutrient recovery and

1. [4 kg N/person/yr x US$0.448/kg N + 0.5 kg P/person/yr x US$0.508/kg P] x 7 billion people

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