Decoupling Growth and Resource Use
For a long time much hope has been put into the theory that we can “decouple” growth from resource use and environmental damage. This “decoupling” has not emerged and nor, with rapid economic growth and population increases, is it likely to come anywhere near the kinds of cuts in emissions and impacts needed to make our current lives sustainable.
The UK Government has suggested it has achieved an emissions reduction of 15% since 1990 – in fact if we include the emissions resulting from the production of imported goods and our overseas travel, the UK has actually increased its emissions by 19% since 1990. Much of the supposed decoupling countries now claim can be accounted for by this displacement of impacts to other countries such as China from which we now import things at great transport-environment cost. And China is many times less environmentally efficient at producing goods and avoiding wastes so those imports have a far higher footprint than if they had been produced in the UK. The human rights issues associated with these imports are also huge. As Professor of Philosophy A. C Grayling writes: “Almost everyone in the West at least once a week touches something made by slave labour in China – a pair of plastic chopsticks, paper packaging, a hair-grip.”
There are a number of recent studies on dematerialisation and decoupling.
A recent study by the five think tanks (one US, one Japanese and three EU) found that between 1973 and 1995 for the US, Netherlands, German, Japan the Total Material Resource inputs per unit GDP did fall very slightly but levelled off in 1985 as GDP kept rising and resource intensity reductions were squeezed to their limits. Global GDP increased by 80% between 1980 and 2000 and population by 40% whilst total resource use increased by 36%. Thus we see that without a radical fall in GDP growth, with increasing demands to raise living standards of the world’s growing poor any decoupling will not make even a small dent in our global impacts.
A major 2004 study reviewing a large number of countries by Dr Stefan Bringezu of the Wuppertahl Institute stated that “with the exception of one specific case, no absolute decline of direct material input of industrial economics took place as those economies grew… the trend of material use in industrial countries is relatively steady.”
Another review of other studies on dematerialisation by Professor Cleveland of Boston University concluded “there is no compelling macroeconomic evidence that the US economy is ‘decoupled’ from material inputs, and we know even less about the net environmental effects of many changes in material use. We caution against the gross generalisations about material use, particularly the ‘gut’ feeling that technical change, substitution, and a shift to the information age inexorably lead to decreased materials intensity and reduced environmental impact.”
Efficiency gains are not helping to stem our increasingly voracious appetite for resources.
Not only are efficiency gains not helping to stem our increasingly voracious appetite for resources but a global study in 2006 by Professor Haberl of Vienna University concluded that “efficiency increases are rather fuelling GDP growth than helping to reduce aggregate resource consumption.” As Professor Peter Victor says in Managing Without Growth: “Over the 30 years from 1972 onwards, higher annual rates of growth in GDP in high income countries were associated if anything with smaller reductions in CO2 intensity not larger ones.” Indeed Victor shows that energy intensity reductions have been lowest in years with the highest growth – in other words high growth takes our eyes off the ball of efficiency and tends us to profligacy.
And our record for improving technology is not great. Between 1902 and 2000 the US increased its use of electricity over 630 times but over that same timescale the improvements in secondary efficiency (the conversion of electricity to useful work) only increased from 51.4% to 57.3% – and it reached 55.4% by 1930.
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There is a fundamental reason why efficiency gains are outstripped by growth in GDP. Energy is a factor of production, along with materials, labour and capital. Any improvement in the efficiency of any factor tends to raise the productivity of other factors as well. The improvements in technique that reduce the energy (or materials) going into the production of each item usually reduce the labour and capital inputs (per item) also.
This basic point was emphasized by W.E.G. Salter in his book Productivity and Technical Change (Cambridge U. Press, 1966). See, in particular, pp. 33-4. More recently, it has been stressed by Leonard Brookes’ “Energy efficiency fallacies revisited” in the journal Energy Policy 28 (2000), pp. 355-66.
Improved productivity is the engine that drives economic growth. Improved efficiency reduces costs per item, and competition helps ensure that such cost savings are eventually passed on to customers as lower relative prices. Lower prices motivate increased demand, which can then absorb the increased output made possible by more efficient production. Thus we get more goods and services per capita. As a consequence of improved efficiency, we consume more resources.
This is a broader effect than what is usually called the “rebound effect”. The latter is a relatively small effect due to immediate consumer reactions to energy efficiency. For example, when we save money by using more efficient light bulbs, a portion of the resulting savings go into increased use of energy. But such situations reflect only a small part of the overall picture of our use of resources. When the effect of efficiency gains in the economy as a whole are taken into account, we get “backfire” rather than “rebound”. Efficiency increases total output, and our throughput keeps going up.