Can the world economy continue to grow without using up all of the earth’s material resources and ruining the environment?
According to one prominent narrative, the only way to achieve sustainability is with a zero-growth, steady-state economy. As economist Kenneth Boulding is supposed to have said,
Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.
But not so fast, says a scientific panel of the United Nations Environmental Programme (UNEP). A May 2011 report from UNEP’s International Resource Panel (IRP) suggests that the world economy can be “decoupled” from its current unsustainable levels of resource extraction and environmental damage. The way things work now, for more people to enjoy better lifestyles, the system has to plunder more and more resources from the earth and dump more and more poisons back into it. But maybe environmental catastrophe and economic collapse can be avoided if policy-makers and innovators can develop the mechanisms to make that decoupling happen. (See “Decoupling Natural Resource Use and Environmental Impacts From Economic Growth.”)
The IRP believes solutions will lie in the areas of
- Technologies that deliver more and better services using much less energy, water, or minerals
- Policies and appropriate market signals that make the transition to a clean and low resource intensity economy attractive and profitable
- And the special role of urban areas in forging innovations towards a sustainable economy
The group really considers this report a starting point, as the first in a series. What they’re trying to do first is elucidate the decoupling concept and lay down a foundation of data describing the current problem, “to establish the quantitative frame from which strategies for decoupling can be designed.”
As somebody who’s actually (mostly) read the report, let me try to set out some of the key findings. I’ve studied economics but haven’t yet drunk the profession’s Kool-Aid, so I think I can tell it in a level-headed way that will make sense. It provides some insights into how technocrats think the world can be saved.
Metabolic Rate: How Big Is Your Footprint?
The report’s authors believe that, if current trends continue, the world could more than triple its consumption of natural resources by 2050, when the population will reach about nine billion. To prevent untenable shortages, “the level of resources used by each and every person may need to fall to between five and six tons” per year from an average of about nine tons now.
To compare consumption between countries, the report uses a measurement it calls “metabolic rate,” that is, the rate of resource usage per capita, “the ‘material footprint’ of an individual person living by a certain country’s average level of consumption.” The study uses annual metabolic rate as a key metric for gauging the material standard of living in a country.
Because of data that became available in the last few years, the report’s authors are able to present a longitudinal study of resource usage from 1900 to 2005 and the comparative metabolic rates among different countries. (Photo Credit: Martin Röll, CC-BY)
The current report analyzes the extraction and environmental effects of four classes of material resources: construction minerals, ores and industrial minerals, fossil fuels, and biomass. Later reports will focus on land and soil, metals, water, and other kinds of resources.
IRP says resource decoupling is characterized by using fewer resources to achieve the same economic output. Environmental impact decoupling is marked by increasing economic output while reducing environmental impact when resources are collected, used, and disposed of. These effects can be measured at a high level — globally or nationally — or at a finer-grained level — a sector, an industry, or a particular resource.
The report stresses that relative decoupling has actually occurred in some cases, which means its mechanisms can be studied. At a global level during the 20th century, consumption of resources rose at “a substantially lower pace than the world economy.” During that period, global resource extraction grew by a factor of eight, while gross domestic product (GDP) grew by a factor of 23. Somehow, the world economy managed to convert material resources into value very efficiently:
Thus resource decoupling has taken place “spontaneously” rather than as a result of policy intention… a certain level of ‘dematerialization’ of the world economy has spontaneously occurred, effectively raising resource productivity by about 1–2% annually at the global level.
The authors believe this phenomenon needs to be researched more closely to gain understanding of the forces that can generate spontaneous decoupling.
That’s an important lesson from the global perspective. When you begin to look at individual countries, though, a different picture emerges. The rising global GDP has not benefited all countries equally. Metabolic rate varies significantly from one country to another, depending on level of development of countries (developing vs. emergent vs. industrialized) and population density.
Cities: Crucibles of Innovation?
The findings suggest that high population density (i.e., having lots of cities) offers certain efficiencies, so that countries with higher densities have lower metabolic rates than those with lower densities, whether they are industrialized or developing economies. For example, the lower-density U.S. has a higher average metabolic rate than high-density Japan; lower-density Brazil has a higher metabolic rate than higher-density China. In the chart show here, which I created based on data from the report, you can see that, although industrialized countries have higher metabolic rates than developing countries, higher population density correlates with lower metabolic rates in both developing and industrialized lands.
Because of this finding, the report’s authors think cities could become important sources of innovations in the quest for decoupling solutions. Cities bring together large populations that have large material needs. But they also bring together considerable intellectual capital, finances, and institutional resources, and are known for their ability to generate innovative solutions to complex problems.
The report includes case studies of Germany, Japan, China, and South Africa. Analysis of the economic and environmental policy initiatives in those countries as very different examples shows the potential influence of policy on decoupling. For example, in Germany,
Empirical evidence suggests that between 1994 and 2007 a seemingly impressive absolute (resource) decoupling of GDP growth and raw material inputs occurred in Germany. While resource productivity (raw materials) rose by 35.4% and GDP by 22.3%, raw material input decreased by -9.7%.
At the same time, these case studies provide an in-depth look at such results, stressing the complexities and nuances involved. Germany, for example, imports significant material resources, so it is likely that some of the burden of that country’s success has been shifted to the countries where those resources were extracted.
Coupling of GDP with environmental damage is more complex and not as well understood, the authors acknowledge. They do draw a correlation between GDP and greenhouse gas emissions (GHG): During the 20th century, global GDP rose by a factor of 22, while fossil fuel use rose by a factor of 14 and GHG emissions by 13. (Photo credit: Loranchet, CC-BY-SA)
Again, those figures point to some spontaneous decoupling — overall the economy was finding efficiencies naturally. As with resource depletion, though, the big-picture problem gets worse as time goes on and more countries become developed and increase their standard of living. Populations are growing, metabolic rates are increasing. In spite of some relative decoupling, gross environmental damage grows and eventually would reach catastrophic levels if trends continued. IRP stresses that more study is needed, though, to understand longer-term and global environmental effects of growth, and to identify decoupling strategies.
Making Innovation More Innovative
Decoupling might call for innovative ways to measure growth, the IRP report suggests.
As things stand now, economists measure growth by GDP, which intrinsically depends on greater extraction of resources. The report’s authors feel that decoupling will be helped by addition of alternative measures of growth, such as the Genuine Progress Indicator, the Human Development Index, or the Happiness Index, measures that take into account such factors as environmental protection and human well-being.
Whereas innovation typically gets applied to invention — making new stuff and selling more of it — the report urges:
Innovation now needs to be harnessed for resource productivity and environmental restoration… innovations that contribute to decoupling through reducing environmental pressure and contributing to sustainability during economic activities.
The need for decoupling calls for larger-scale system innovation — not just incremental improvements to existing products and processes, but game-changing, groundbreaking, system-wide innovations in the way economic activity happens.
Think the innovations that brought about the industrial revolution or the international banking system. Think the scientific method, ocean travel, economic specialization. The harnessing of fire, the invention of the wheel. Innovations like those.
Hmm, maybe they’re right, maybe it can be done. I guess this Kool-Aid stuff doesn’t taste so bad after all …