What has happened?
The combined mass of anything built by humans, from buildings and bridges to mechanical objects and roads reached 100 billion tons (one teraton) in 2020, according to the Weizmann Institute of Sciences in Israel.
This means it now greater than the estimated weight of all natural phenomena, from trees and plants to animal life – known as the biomass. The tipping point was reached because the amount of things manufactured or built has steadily risen, while the quantity of living things has fallen due to deforestation and the extinction of species from habitat loss.
The research shows the mass of man-made objects has doubled every 20 years, partly driven by the growth of China into an economic superpower, with cities and a road network to rival anything in the west. Development globally has accelerated exponentially since 1950 due to the widespread availability of cheap plastic, concrete and steel.
Why is it important?
The man-made versus natural ratio will get worse because humans are now producing about 30 billion tons of new objects each year, or 4 tons for every person on Earth, the research shows. This means humans now generate their own bodyweight in stuff every week. On the current trajectory, the mass of human production will have tripled to 3 teratons by 2040.
This has major implications for global warming, as the amount of carbon-emitting production processes and the use of their end-products is increasing, while the natural means of absorbing this extra CO2 through natural carbon sinks such as forests is decreasing.
Much of what is manufactured ends up on landfill waste sites under the take-make-dispose economic model of extracting raw materials, turning them into finished goods, and then throwing away what is no longer needed. The alternative to this linear model is the circular economy, which places greater emphasis on reusing existing materials in a series of loops, thereby putting the Earth on something of a diet.
What does it mean for investors?
“The human tendency to shape the natural world is creating a flood of man-made objects that increasingly work against the planet’s rules of regeneration,” says Holger Frey, Portfolio Manager of the RobecoSAM Circular Economy Equities fund.
“As a consequence, today the world is literally drowning in waste, and the damaging environmental and economic effects are surfacing rapidly across the globe.”
“This raises the need for transformative, circular business solutions that restore a sustainable balance between production, consumption and disposal of used goods. For enterprising firms this opens up entirely new markets and investment opportunities.”