Accelerating progress on the

Resource Revolution

Fraser Thompson
McKinsey Global Institute

Chatham House
February 26, 2013
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company is strictly prohibited

McKinseys 2011 Resource Revolution report identified

15 game changing resource productivity opportunities

Energy

Land

Water

Steel

Total 2030 resource benefit

$ billion (2010 dollars)
Building energy efficiency

696

Large scale farm yields

266

Food waste

252

Municipal water leakage

167

Urban densification

155

Iron and steel energy efficiency

145

Smallholder farm yields

143

Transport efficiency

138

Electric and hybrid vehicles

138

Land degradation

134

End-use steel efficiency

132

Oil and coal recovery

115

Irrigation techniques

115

Road freight shift

108

Power plant efficiency

106

We are developing metrics to understand the progress of countries on

these resource productivity opportunities
Resource productivity opportunity

Metrics

Building efficiency

Penetration of LED lighting

Extensiveness of energy efficiency labeling and standards
Household energy efficiency growth

Large scale farms

Agricultural capital investment per hectare of cultivate land

Food waste

Percentage of food wasted at each stage of value chain

Municipal water leakage

Non-revenue water as percentage of total water

Urban transit

Percentage of city population using public transport to commute

Iron and steel energy efficiency

Kilograms of coal injection per tonne of hot metal in blast furnaces

Smallholder farms

Agricultural yield growth in smallholder farms

Transport efficiency

Liters of fuel used per 100 km travelled for light duty vehicles

Electric and hybrid vehicles

Electric and hybrid vehicle registration as share of total light

vehicle registrations

Land degradation

Percentage of land degraded

End-use steel efficiency

No suitable metrics of sufficient quality

Oil and coal recovery rate

Percentage of oil recovered from existing oil wells

Irrigation techniques

Percentage penetration of micro-irrigation techniques

Road-freight shift

Ratio of railway freight volume to road freight volume

Power plant efficiency

Percentage conversion efficiency by type of power plant

Three main insights emerge from the data analysis

Performance varies widely

No region outperforms across all
dimensions
The strongest improvements were
seen in a variety of geographies

We have identified scalable examples of best practice in each of the 15

opportunity areas
Opportunity
Building efficiency
Large scale farms
Food waste
Municipal water leakage
Urban densification

Case studies Description

PACE Commercial Consortium; UK BREEAM; Japans top runner

Brazils agricultural research organization Embrapa
Koreas RFID swipe cards; Walmarts supply chain in Mexico
Investment in pipe repair in Denmark; reforms in Phnom Penh
Londons expansion of bus use; Pariss metro system

Iron/steel energy
efficiency

Japans iron and steel industry reforms

Smallholder farms

Moroccos Maroc Vert plan; Reuters mobile service in India

Fuel regulation in the European Union

Transport efficiency
Electric and hybrid
vehicles

Building the charging network in France; Denmarks EV subsidy

Land degradation

Egypts Fuka-Matrouh program; Chinas soil erosion control program

Use of high strength steel in Italys Desio Tower

End-use steel efficiency

Oil and coal recovery
rate

Incentives for oil recovery in Norway

Irrigation techniques

Cap and trade in Murray-Darling basin; South Africas IT system

USAs Staggers Act; Switzerlands encouragement of road freight

Road-freight shift

Our case studies provide a number of lessons for others seeking to

promote resource efficiency

Shift mindsets with information

Create stable market signals

Align interests to overcome split
incentives
Achieve critical scale

Innovate and absorb