Elsevier

Ecological Economics

Volume 51, Issues 1–2, 1 November 2004, Pages 97-124
Ecological Economics

Analysis
International comparison of resource use and its relation to economic growth: The development of total material requirement, direct material inputs and hidden flows and the structure of TMR

https://doi.org/10.1016/j.ecolecon.2004.04.010Get rights and content

Abstract

Resource flows constitute the materials basis of the economy. At the same time, they carry and induce an environmental burden associated with resource extraction and the subsequent material flows and stocks, which finally end up as waste and emissions. A reduction of this material throughput and the related impacts would require a reduction of resource inputs. And breaking the link between resource consumption and economic growth would require an increase in resource productivity. Material flow analysis (MFA) can be used to quantify resource flows and indicate resource productivity. In this article, we study the available empirical evidence on the actual (de-)linkage of material resource use and economic growth.

We compare resource use with respect to total material requirement (TMR) and direct material input (DMI) for 11 and 26 countries, respectively, and the European Union (EU-15). The dynamics of TMR, as well as of the main components are analysed in relation to economic growth in order to show whether there is a decoupling (relative or absolute) from GDP and a change of the metabolic structure in the course of economic development. DMI/cap so far only decoupled from GDP/cap in relative terms; that is, in most countries, it reached a rather constant level but—with the exception of Czech Republic—showed no absolute decline yet. TMR/cap was reduced in two high-income countries and one low-income country due to political influence. Changes in TMR were more influenced by hidden flows (HF) than by DMI. We analyse the dynamics of the structure and composition of TMR in the course of economic development. In general, the economic development of industrial countries was accompanied by a shift from domestic to foreign resource extraction. Different relations can be discovered for the share of biomass, fossil fuel resources, construction resources and metals and industrial minerals.

Introduction

The material flows between the economy and the environment constitute the physical basis of the economy as well as the bridge between human activities and environmental impacts. The metabolism of an economy can be described by a set of indicators derived from material flow accounting (EUROSTAT, 2001, Bringezu and Moriguchi, 2002). This contribution will focus on input-oriented indicators, the total material requirement (TMR) and its main components, the direct material input (DMI) and the hidden flows (HF).

The method of accounting for total material requirements of a national economy which we developed at the Wuppertal Institute attracted widespread resonance after the first international comparison in the Resource Flows report (Adriaanse et al., 1997)1. Subsequently, a growing number of teams tested the method and produced their own data for their countries. Thanks to good cooperation with colleagues, we now also draw from their experience. In this article, we refer to studies on the European Union (EU-15) and its Member States (Bringezu and Schütz, 2001a), for Austria (Schandl, 1998, Gerhold and Petrovic, 2000, Matthews et al., 2000), China (Chen and Qiao, 2000), Czech Republic (Scasny et al., 2003), Denmark (Pedersen, 1999), Germany ( Bringezu and Schütz, 1995, Bringezu, 2002a, DESTATIS, 2001), Finland (Statistics Finland, 1999, Mäenpää et al., 2000, Muukkonen, 2000), Italy (De Marco et al., 2000, Femia, 2000, Barbiero et al., 2003), Japan (Adriaanse et al., 1997, Moriguchi, 2002), the Netherlands (Adriaanse et al., 1997, Matthews et al., 2000), Poland (Schütz and Welfens, 2000), Sweden (Isacsson et al., 2000), United Kingdom (Vaze and Barron, 1998, Bringezu and Schütz, 2001b, Schandl and Schulz, 2000) and the United States (Adriaanse et al., 1997, Matthews et al., 2000, Rogich and Matos, 2002). As an interim result of ongoing work on the direct material input of the accession countries of the European Union and the countries which belong to the reporting area of the European Environment Agency, we add new data for Estonia and Norway which are preliminary but sufficiently valid for international comparison.

Economy-wide material flow analysis (MFA) has received increasing attention and was fostered through the international research network of ConAccount (Bringezu et al., 1998). Basically, society and economy are analysed as physical entities which exchange materials and energy with the surrounding natural environment. This concept of a metabolism of society and/or economy is rooted in different academic disciplines (Fischer-Kowalski and Hüttler, 1999). MFA can be used to analyse the volume and structure of the material throughput of economies, and to assess the metabolic performance in terms of sustainable development. Basic requirements of a future sustainable metabolism of economies comprise detoxification (pollution abatement and chemicals control), dematerialization (through increased resource efficiency) and shift to renewable resources (through increased consistency of man-made and natural flows and stocks; Bringezu, 2002b). This article refers to the dematerialization component, which on the one hand had been conceived as a strategy to be implemented for sustainability (by industry and policy), and on the other hand had been formulated as a hypothesis that dematerialization would result in the course of and as a consequence of economic growth. A dematerialization in terms of reduced resource requirements and material throughput has been deemed as prerequisite for sustainable development, the most demanding goal of a factor of 10 reduction in industrial countries, was formulated by Schmidt-Bleek (1994). The hypothesis that economic growth may lead to or be even a prerequisite for dematerialization was derived from Environmental Kuznets Curves (EKC). However, the evidence of EKC was not only poor for pollutants (Ekins, 1997). In addition, the evidence of dematerialization in terms of decreasing materials intensity was often questionable as reviewed by Cleveland and Ruth (1999) due to methodological weaknesses. Jänicke et al. (1997) had shown that the use of certain base materials tends to decline in the course of economic development in industrial countries, at least for a certain period. However, substitution between materials may lead to a “transmaterialization”, which may be overlooked while focusing only on selected material flows (Labys, 2002). In this article, we will use indicators which at the first step account for all (primary) materials directly used and at the second step comprise all resource requirements of an economy in order to consider the overall effect of substitution and efficiency increase. We analyse material flows not with regard to economic properties but concentrate on the direct material input and the total material requirement. The latter may be regarded as an indicator of generic environmental pressure which complements substance-specific environmental pressure (Bringezu et al., 2003).

In the last 25 years, there has been a discussion of whether material intensity declines with increasing economic growth, which can imply absolute dematerialization at high income (Malenbaum, 1978, Jänicke et al., 1989). Recent studies rather gave evidence of N-shape correlations indicating at least an intermediate period of recoupling of material use and economic growth (Hüttler et al., 1999, De Bruyn, 2002). Canas et al. (2003) found that there is statistical support for both the quadratic and cubic EKC hypothesis because data is mainly available for the increasing parts of the curves. Jänicke (2001) points out that an end to the “era of materials” (Larsen et al., 1986) is not in sight, and he referred to the results of Adriaanse et al. (1997) which we will integrate here into a broader analysis. In this article, we will show that, so far, with the exception of one specific case, no absolute decline of direct material input of industrial economies took place. We will see that despite of short-term fluctuations, the trend of material use in industrial countries is relatively steady, although at different levels and with various relations to economic growth. Firstly, we will consider single countries in a comparative manner. Secondly, we will perform a panel analysis to find out an overall relationship between resource flows in relation to economic growth. We will show that available data for DMI in general fit to an “inverted L shape” (or the left-hand side of an “inverted U”), which can be best approximated by a quadratic polynomial function, whereas data for TMR mainly follow a linear tendency.

So far, the I–U relation was only studied with respect to material flows within the political boundary of an economy. As a consequence, the shift of environmental burden and resource requirements to other regions due to increased imports has not been considered appropriately. Muradian and Martinez-Alier (2001), pointing to our data and the results of Adriaanse et al. (1997), studied selected North–South trade flows and correctly criticized that EKC are not applicable at the global level if developed countries are improving their local environmental conditions by displacing environmental load abroad through the trade of environment-intensive goods. In this article, we will account not only for domestic resource flows but also for the upstream “hidden” resource flows associated with the imports of the countries studied. And we will provide evidence that in the course of economic growth, there has been a shift of (re-)sourcing and therefore also its environmental burden from domestic to foreign territory.

In the following sections, we will refer to the accounting methods used and the harmonization of data for international comparison. We will provide an overview of the structure of TMR of industrial economies with regard to systemic properties and materials composition. The analysis of the relation of DMI and GDP will show that many but not all high-income countries decoupled both parameters; however, an absolute but not continuous decline of material use could only be observed for Czech Republic, a development which had been influenced by the breakdown of socialist state planning economies in East Europe. The limited scope of the DMI indicator will be widened by the analysis of TMR. Here, we will have a closer look at the limited cases of absolute dematerialization of total resource requirements documented so far. We will show that policy influence has been a direct and indirect driving factor for dematerialization and resource efficiency. We will also provide evidence that industrialized countries increasingly source materials from foreign countries, which renders the accounting for the hidden flows of imports a critical factor for monitoring progress towards real dematerialization. Last but not least, we will examine the structural change of TMR in the course of economic development.

Section snippets

Methods

The indicators DMI and TMR were accounted as outlined in the EUROSTAT Methodological Guide “Economy-wide material flow accounts and derived indicators” (EUROSTAT, 2001). It will be pointed out wherever data could not be accounted for after these standardized rules. The general data quality has been described by EEA (2001) and EUROSTAT (2001).

DMI is defined to measure the input of materials into the domestic economy which are of economic value and are processed and used in production and

Composition of TMR

In the analysed economies, the most recent data for TMR range between 32 and 98 t/cap with a median value of 58 t/cap (Table 1). DMI ranges between 2 and 45 t/cap with a median of 21 t/cap. The median share of DMI in TMR is 35%. Correspondingly, the dominant share of 65% is made up by hidden flows which range between 18 and 60 t/cap. Thus, most of the resource requirements of these economies do not enter the market, but nevertheless burden the environment.

TMR is predominantly nonrenewable in

Development of DMI and GDP

In the following section, we analysed the relation of direct material input and economic development in a way, which allows distinguishing specific country trends, as well as possible overall trends. The first part addresses the question for each country, in how far there is a relative or absolute decoupling of the DMI/cap from GDP/cap.

The second part tries to determine by means of panel techniques, if there is an overall trend of decoupling. While in the former case, we are only interested in

Country-specific classification

The wide range of DMI/cap between countries and the higher values of those countries, such as Estonia and Norway, which seemingly extract a higher amount of domestic resources, point towards the limited information value of that indicator. Most developed countries rather import processed raw materials, which tend to reduce DMI. Thus, if we want to account for “the real” material requirements, we have to consider also those transnational material flows required for the delivery of the imports.

Development of TMR in relation to DMI and HF

In all countries where comparable time series exist, total resource requirements did not grow as fast as GDP. Although with wide variations in absolute trends as shown above, the economies of these countries developed towards increasing resource efficiency, and required less resources to provide a unit of value added. In 9 of 10 cases, the changes of TMR were much more influenced by the hidden flows than through the direct material input (Table 10). In EU-15, reunited Germany and the United

Domestic versus foreign origin of TMR

High-income countries tend to extract a lower share of resources requirements from their own territory (Fig. 7). Obviously, economic growth is linked to a shift of resource requirements and associated environmental burden to other regions. For a univariate linear model, we showed that there is a significant negative correlation between the GDP and the domestic share of TMR. The regression was undertaken with Parks' FGLS method correction for heteroskedasticity, contemporaneous and serial

Renewable materials and erosion

The share of renewable materials (=biomass) in TMR does not show any significant relation to economic development during the study periods. For China, the lowest values are recorded with about 2%, which contrasts assumptions that during early phases of economic development, agriculture and forestry resources play a dominating role5

Fossil fuels

The share of fossil energy supply in TMR did not correlate with GDP. The variation between countries was considerable, ranging between 10% and 45% of TMR and 5 and 31 t/cap. The variation mainly depends on the specific energy mix. The metabolic performance of the energy supply can obviously vary significantly, and there is neither a unique pattern nor fixed relation with regard to economic growth.

Nevertheless, changes in energy consumption may significantly influence the trend of TMR. The

Construction minerals and excavation

The available data indicate that the share of resources for construction (minerals and excavation) slowly decreases with increasing citizen's income (Fig. 11). In early stages of economic development, a higher share of resources is used to provide infrastructure for housing and transport. The high and increasing share in China is especially related to the erection of dams (according to the underestimation of construction minerals, the actual share may be even higher than shown here). The

Metals and industrial minerals

Metals and industrial minerals are processed in manufacturing and used for various products. During early phases of economic development, the share of these resources in TMR is relative low (Fig. 12). In countries, such as China and Poland, resource requirements are still more devoted to basic supply needs for nutrition, housing and energy supply.

In five of seven high-income countries, the share of metals and industrial minerals in TMR seems to fluctuate around levels between 20% and 40% of

Conclusions

  • Economy-wide MFA gives insight into the metabolic performance of economies. The method provides quantitative, internationally comparable indicators. However, variation of interpreting and implementing the accounting conventions also indicates the need for further specification and harmonization of the methods. The current stage of economy-wide MFA and derived indicators may be compared with early phases of the system of national accounts and derived economic indicators, such as GDP; analogous

Acknowledgements

We thank Donald G. Rogich and three anonymous referees for their helpful comments on an earlier version of this paper, and Melanie Krause for technical support.

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