Eco-economic decoupling

In economic and environmental fields, decoupling refers to an economy that would be able to grow without corresponding increases in environmental pressure. In many economies, increasing production (GDP) raises pressure on the environment. An economy that would be able to sustain economic growth without having a negative impact on the environment would be said to be decoupled. Environmental pressure is often measured using emissions of pollutants, and decoupling is often measured by the emission intensity of economic output.

International Resource Panel

In 2011, the International Resource Panel, hosted by the United Nations Environment Programme (UNEP) warned that by 2050, the human race could devour 140 billion tons of minerals, ores, fossil fuels and biomass per year – three times its current appetite – unless nations can start decoupling economic growth rates from the rate of natural resource consumption.[1] It noted that developed country citizens consume an average of 16 tons of those four key resources per capita (ranging up to 40 or more tons per person in some developed countries). By comparison, the average person in India today consumes four tons per year.

The OECD has made decoupling a major focus of the work of its Environment Directorate. The OECD defines the term as follows:

the term 'decoupling' refers to breaking the link between "environmental bads" and "economic goods." It explains this as having rates of increasing wealth greater than the rates of increasing impacts.[2]

In 2014, the same International Resource Panel published a second report, "Decoupling 2",[3] which "highlights existing technological possibilities and opportunities for both developing and developed countries to accelerate decoupling and reap the environmental and economic benefits of increased resource productivity." The lead coordinating author of this report was Ernst Ulrich von Weizsäcker.

In 2016, the International Resource Panel published a report indicating that "global material productivity has declined since about the year 2000 and the global economy now needs more materials per unit of GDP than it did at the turn of the century" as a result of shifts in production from high-income to middle-income countries.[4] That is to say, the growth of material flows has been stronger than the growth of gross domestic product.[4] This is the opposite of decoupling, a situation that some people call overcoupling.

Relative versus absolute decoupling

Tim Jackson, author of Prosperity Without Growth, stresses the importance of differentiating between relative and absolute decoupling:

  • Relative decoupling refers to a decline in the ecological intensity per unit of economic output. In this situation, resource impacts decline relative to the GDP, which could itself still be rising.[5]
  • Absolute decoupling refers to a situation in which resource impacts decline in absolute terms. Resource efficiencies must increase at least as fast as economic output does and must continue to improve as the economy grows, if absolute decoupling is to occur.[5]

Jackson points out that an economy can correctly claim that it has relatively decoupled its economy in terms of energy inputs per unit of GDP. However, in this situation, total environmental impacts would still be increasing, albeit at a slower pace of growth than in GDP.[5]

Jackson uses this distinction to caution against technology-optimists who use the term decoupling as an "escape route from the dilemma of growth."[5] He points out that "there is quite a lot of evidence to support the existence of [relative decoupling]" in global economies, however "evidence for [absolute decoupling] is harder to find."[5]

Similarly, ecological economist and steady-state theorist Herman Daly stated in 1991:[6]

It is true that "In 1969 a dollar's worth of GNP was produced with one-half the materials used to produce a dollar's worth of GNP in 1900, in constant dollars." Nevertheless, over the same period total materials by consumption increased by 400 percent.

Relative and absolute decoupling[7]
Relative decoupling Absolute decoupling
Description Decline in the resource intensity per unit of economic output Resource use decline in absolute terms while economic output rise
Example Increased carbon efficiency (but lower than economic growth) Increased carbon efficiency higher than economic growth
Link with I = PAT Carbon intensity decline (but ≤ population + income growths) Carbon intensity decline > (population growth + income growth)
Evidence for carbon emissions Yes: 34% decrease between 1965 and 2015 (CO
No: 300% increase between 1965 and 2015 (absolute CO
Evidence for resource extraction No: resource use increases more than GDP (1990-2015) No: resource use increases overall (1990-2015)

Between 1990 and 2015, the carbon intensity per $GDP declined of 0.6 percent per year (relative decoupling), but the population grew of 1.3 percent per year and the income per capita also grew of 1.3 percent per year.[7] That is to say, the carbon emissions grew of 1.3 + 1.3 − 0.6 = 2 percent per year, leading to a 62% increase in 25 years (the data reflect no absolute decoupling).[7] According to Tim Jackson:[7]

There is no simple formula that leads from the efficiency of the market to the meeting of ecological targets. Simplistic assumptions that capitalism's propensity for efficiency will allow us to stabilise the climate are nothing short of delusional. [...] The analysis in this chapter suggests that it is entirely fanciful to suppose that 'deep' emission and resource cuts can be achieved without confronting the structure of market economies.

On economic growth and environmental degradation, Donella Meadows wrote:[8]

Growth has costs as well as benefits, and we typically don't count the costs – among which are poverty and hunger, environmental destruction, and so on – the whole list of problems that we are trying to solve with growth! What is needed is much slower growth, very different kinds of growth, and in some cases no growth or negative growth. The world's leaders are correctly fixated on economic growth as the answer to virtually all problems, but they're pushing it with all their might in the wrong direction.

See also

Notes and references

  1. Decoupling natural resource use and environmental impacts of economic growth. International Resource Panel report, 2011
  2. OECD 2002 “Indicators to Measure Decoupling of Environmental Pressure from Economic Growth” (excerpt)
  3. Decoupling 2: technologies, opportunities and policy options A Report of the Working Group on Decoupling to the International Resource Panel. von Weizsäcker, E.U., de Larderel, J, Hargroves, K., Hudson, C., Smith, M., Rodrigues, M., 2014
  4. "Global material flows and resource productivity. An assessment study of the UNEP International Resource Panel", United Nations Environment Programme, 2016 (page visited on 12 October 2018).
  5. Jackson, Tim (2009). Prosperity without Growth: Economics for a Finite Planet (1 ed.). London: Earthscan. pp. 67–71. ISBN 9781844078943.
  6. Daly, Herman E. (1991). Steady-state economics: Second edition with new essays. Island Press. p. 118. ISBN 9781597268721.
  7. Jackson, Tim (2017) [2009]. "The myth of decoupling". Prosperity Without Growth: Foundations for the Economy of Tomorrow (2 ed.). London: Routledge. pp. 84–102. ISBN 9781138935419.
  8. Donella Meadows, edited by Diana Wright, Thinking in Systems: A Primer, Chelsea Green Publishing, 2008, page 146 (ISBN 9781603580557).
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