unep decoupling report english

Decoupling natural resource use anD environmental impacts from economic growth

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United Nations Environment ProgrammeP.O. Box 30552 Nairobi, 00100 Kenya

Tel: (254 20) 7621234Fax: (254 20) 7623927

E-mail: [email protected]: www.unep.org

www . unep . o r gUnited Nations Environment ProgrammeP.O. Box 30552 Nairobi, 00100 Kenya

Tel: (254 20) 7621234Fax: (254 20) 7623927


www . unep . o r g

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Editor:InternationalResourcePanel

WorkingGrouponDecoupling

Leadauthors:MarinaFischer-Kowalski,InstituteofSocialEcologyVienna,Alpen-AdriaUniversity,Austria,withthesupportoftheLebensministerium,AustriaandMarkSwilling,SustainabilityInstitute,SchoolofPublicLeadership,UniversityofStellenbosch,SouthAfrica

Contributingauthors:ErnstUlrichvonWeizsäcker(ChairpersonoftheDecouplingWorkingGroup),YongRen,YuichiMoriguchi,WendyCrane,FridolinKrausmann,NinaEisenmenger,StefanGiljum,PeterHennicke,ReneKemp,PatyRomeroLankao,AnnaBellaSiribanManalang

JeffMcNeelyprovidededitorialsupportforthefullreportandsummarybrochure.

Thereportwentthroughseveralroundsofpeer-reviewcoordinatedinanefficientandconstructivewaybyJeffMcNeelytogetherwiththeInternationalResourcePanelSecretariat.Valuablecommentswerereceivedfromseveralanonymousreviewersinthisprocess.Thepreparationofthisreportalsobenefitedfromdiscussionswithmanycolleaguesatvariousmeetings.

SpecialthanksgotoErnstUlrichvonWeizsäckerandAshokKhoslaasCo-ChairsoftheInternationalResourcePanel,themembersoftheInternationalResourcePanelanditsSteeringCommitteefortheirdedicationandcommitment.

JanetSalem,UNEP,providedvaluableinputandcomments;theInternationalResourcePanel’sSecretariatcoordinatedthepreparationofthisreport.JaapvanWoerdenandStefanSchwarzerofUNEP/DEWA/GRID–Genevaprovidedscientificdatasupportindevelopingthefigures.

Themainresponsibilityforerrorsremainswiththeauthors.

ISBN:978-92-807-3167-5JobNumber:DTI/1388/PA

Thefullreportshouldbereferencedasfollows:

UNEP(2011)Decouplingnaturalresourceuseandenvironmentalimpactsfromeconomicgrowth,AReportoftheWorkingGrouponDecouplingtotheInternationalResourcePanel.Fischer-Kowalski,M.,Swilling,M.,vonWeizsäcker,E.U.,Ren,Y.,Moriguchi,Y.,Crane,W.,Krausmann,F.,Eisenmenger,N.,Giljum,S.,Hennicke,P.,RomeroLankao,P.,SiribanManalang,A.

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Decoupling natural resource use anD environmental impacts from economic growth


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Contents

List of figures and tables v

Abbreviations and acronyms vii

Units viii

Preface ix

Foreword xi

Executive summary xiii

Objective and scope xvii

1 Introduction 11.1Whydecoupling?1.2Definingdecoupling 4

1.2.1Rootsofthedecouplingconcept 4

2 Global long-term trends in the use of natural resources and in undesirable environmental impacts 72.1Noteonmethodology 72.2Theglobaldynamicsofmaterialresourceuse 10

2.2.1Conclusion 172.3Assessingthedynamicsofglobalenvironmentalimpacts 18

2.3.1Strategiestoreduceimpacts 182.3.2TheEnvironmentalKuznetsCurve 192.3.3Empiricalstudiesofimpacts 202.3.4Conclusion 25

2.4Scenariosforfutureglobalmaterialsuse 262.4.1Scenario1:Businessasusual 282.4.2Scenario2:Moderatecontractionandconvergence 292.4.3Scenario3:Toughcontractionandconvergence 29

3 Decoupling and the need for system innovations 333.1Rethinkinggrowth 333.2Innovationanddecoupling 353.3Citiesasspacesforinnovationanddecoupling 423.4Experiencesandlessonsfromthecountrycasestudies 45

3.4.1Recognizingresourcedepletionandnegativeimpacts 463.4.2Policyresponses 483.4.3Decoupling 50

Decoupling natural resource use and environmental impacts from economic growth

ii

4 Decoupling, trade and development dynamics 554.1Tradeandthedistributionofresourcesandenvironmentalburdens 55

4.1.1Thedynamicsofglobaltradeineconomic(monetary)andphysicalterms 554.1.2Theeconomicstructureofglobaltrade 564.1.3Thephysicalstructureofglobaltrade 584.1.4Indirectresourceflowsembodiedintrade 604.1.5Trade,decouplinganddevelopment 62

4.2Decoupling,developmentandinequality 644.2.1Africaasaspecialcase? 66

4.3Decouplingandthereboundeffect 674.4Pricesandresourceproductivity 69

5 Conclusions and major policy challenges 715.1Conclusions 715.2Majorpolicychallenges 74

Country case studies 76

6 Germany 776.1Recognizinglimits 776.2NationalStrategyforSustainableDevelopment 786.3Afeasiblevision?The‘2000Watt/capsociety’ 796.4Thekeytosustainableenergy:efficiencyincreasebyaFactorx 806.5Integratingmaterialandenergyefficiencystrategies 816.6Decoupling–empiricalevidenceandstrategicactions 826.7Impulseprogrammeformaterialefficiency(2005–2009) 836.8Researchonintegratedstrategies(EcologicalIndustrialPolicy) 846.9Institutionalcontextfordecoupling:selectedproblems 866.10Conclusionandoutlook 86

7 South Africa 877.1Recognizinglimits 887.2Climatechange 927.3Oilresources 937.4Energy 947.5Waterandsanitation 957.6Solidwaste 967.7Soils 987.8Biodiversity 997.9Policyresponses 100

7.9.1MacroeconomicpolicyversusSection24(b)oftheConstitution 1007.9.2NationalFrameworkforSustainableDevelopment 1007.9.3Growinginfluenceofsustainabilitythinking 101

7.10Decoupling–opportunitiesforaction 1027.10.1Decouplingopportunities 102

7.11Conclusion 103

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8 China 1058.1Recognizinglimits 1068.2Policyresponses 1068.3Towardsan‘ecologicalcivilization’ 1078.4Thecirculareconomy 1078.5Environmentaleconomicinstruments 1088.6Decoupling–evidenceandstrategicactions 1108.7DecouplingtrendsinChina 1128.8Actionstowardsdecoupling 1158.9Oneworld,onedream–theGreenOlympics 1168.10Conclusion 116

9 Japan 1199.1Recognizinglimits 120

9.1.1Limitsofresources–lessonslearnedfromoilcrises 1209.1.2Limitsattheend-of-pipe 120

9.2Policyresponses 1219.2.1Towardsasoundmaterialcyclesociety 1219.2.2TheFundamentalLawandPlan 123

9.3Contributiontointernationalinitiatives 1249.4Japan’sstrategyforasustainablesociety 1249.5Decoupling–evidenceandinnovation 125

9.5.1Voluntaryactionsbyindustries 1259.5.2Actionsbylocalauthorities 1269.5.3AJapaneseapproachtodecoupling:theTopRunnerProgramme 126

9.6Lessonsfromtheuseofresourceproductivityindicator 1289.7Conclusion 129

References 130

About the International Resource Panel 151

Working Group on Decoupling 152


iv

List of figures and tables

Figure 1Twoaspectsof‘decoupling’ xiiiFigure 2Globalmaterialextractioninbilliontons,1900–2005 xivFigure 1.1Stylizedrepresentationofresourcedecouplingandimpactdecoupling 5Figure 2.1Globalmaterialextractioninbilliontons,1900–2005 11Figure 2.2Globalmetabolicrates1900–2005,andincome 12Figure 2.3GrossDomesticProductionandDomesticMaterialConsumptioninOECDcountries,1980–2000 12Figure 2.4Compositeresourcepriceindex(atconstantprices,1900–2000) 13Figure 2.5Commoditypriceindices 13Figure 2.6Theglobalinterrelationbetweenresourceuseandincome(175countriesintheyear2000) 14Figure 2.7Averagemetabolicrates(resourceuseintons/capita)bydevelopmentstatusandpopulationdensity 17Figure 2.8Environmentalrisktransitionframework 19Figure 2.9Globalgrowthofcerealsproductionandfertilizerconsumption 21Figure 2.10Worldconventionaloildiscoveriesandproduction 22Figure 2.11Globalextractionofindustrialmineralsandores1980and2006,bytypeofcountry 23Figure 2.12OregradesofminesinAustralia,1840–2005 23Figure 2.13Oregradesofgoldmines,1830–2010 24Figure 2.14Oregradesofnickelandcoppermines,1885–2010 24Figure 2.15Resourceuseaccordingtothreedifferentscenariosupto2050 30Figure 3.1Thedifferentguisesofdevelopment 34Figure 3.2Resourceproductivity,labourproductivityandenergyproductivityinEU-15 37Figure 3.3Pricedynamicsofwages,materialsandelectricity 37Figure 3.4Conceptualmodelofinnovations 39Figure 3.5Systeminnovation 40Figure 3.6.Therelationbetweenurbanizationlevel(%)andGrossNationalIncome(GNI) 43Figure 4.1.Compositionofexports(inmonetaryunits)byworldregions,2006 57Figure 4.2.Rawmaterialextractionandtradebycountrytype 58Figure 4.3.Physicalandmonetarytradebalancesofthreecountrytypes,1962to2005 59Figure 4.4.Physicaltradebalances,year2005 60Figure 4.5.Virtualwatertradebalancesandflowsofagriculturalproducts,1997–2001 61Figure 4.6.Materialintensityoftheworldeconomy:DomesticextractionofmaterialsperunitofGDPbyworldregion 64Figure 4.7.Eco-friendlyspending,totalamountandpercentageoftotalfiscalstimuluspackage 66Figure 4.8.CO2emissionsfromfossilfuelconsumption 70Figure 6.1.ResourceproductivityandGDPgrowth 82Figure 6.2.StructureoftheprojectMaRess 85Figure 7.1.RealGDPgrowth1983–2004 88

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Figure 7.2.GDPandemploymentchange1983–2004(non-agriculturalsectors) 89Figure 7.3.Finalconsumptionexpenditurebyhouseholds 89Figure 7.4.Percentageofhouseholdsavinganddebt1970–2006 90Figure 7.5Domesticextraction 91Figure 7.6Materialefficiency1980–2000 91Figure 7.7Primarymaterialexports1980–2000 92Figure 7.8SolidwastedisposalinmillionsoftonsinCapeTown,2002–2027 97Figure 8.1TheprocessofeconomicdevelopmentinChinasince1978 105Figure 8.2Scenariosforeconomicgrowthanditspressuresonenvironmentandresources 111Figure 8.3Threestagesofeconomicgrowthandpressuresonenvironmentandresources 112Figure 8.4Trendsofenergy,GDPandpopulationandthedecouplingindexofprimaryenergyconsumptiontoGDPgrowth 113Figure 8.5Trendsoffreshwaterconsumption,GDPandpopulationandthedecouplingindexoffreshwaterconsumptiontoGDPgrowth 113Figure 8.6TrendsofindustrialwastewaterandsolidwastedischargeandGDPandthedecouplingindexofindustrialwastewaterandsolidwastedischargetoGDP 114Figure 8.7TrendsofCODdischarge,SO2emissionandGDPandthedecouplingindexofSO2emissionandCODdischargetoGDP 114Figure 9.1Schemeofasoundmaterialcyclesociety(SMC) 122Figure 9.2Trendsofmaterialflowindicators 123Figure 9.3Legislativeframeworkforsoundmaterialcyclepolicy 124Figure 9.4FrameworkofJapan’sstrategyforasustainablesociety 125Figure 9.5WastemanagementeffortsinShibushiCity 126

Table 2.1Metabolicscalesandrates,overviewofscenarioanalysis 31Table 7.1Comparativecarbonemissions2004 93Table 7.2Pastandprojectedconsumptionoftransportationfuels(millionlitres/year) 94Table 7.3Energyintensities 95Table 7.4Historicalwaterconsumption(1996)andprojectedwaterdemand(2030)bysector 95Table 7.5KeythreatstoSouthAfrica’secosystems 99Table 9.1TopRunnerProgrammeachievements 127


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3R Reduce,reuseandrecycleA AnnumASGI-SA AcceleratedandSharedGrowthInitiativeforSouthAfricaBAU BusinessasusualBMU GermanMinistryfortheEnvironment,NatureConservationandNuclearSafetyCap CapitaCCICED ChinaCouncilforInternationalCooperationonEnvironmentandDevelopmentCCS CarboncaptureandstorageCHP CombinedHeatPower CO2 CarbonDioxide COD ChemicalOxygenDemand DE DomesticExtractionDEMEA DeutscheMaterialeffizienzagentur(GermanMaterialEfficiencyAgency)DI DecouplingIndexDMC DomesticMaterialConsumptionDMI DirectMaterialInputECLAC UNEconomicCommissionforLatinAmericaandtheCaribbeanEFA Effizienzargentur(EfficiencyAgencyofNorthRhine-Westfalia)EIA EnvironmentalImpactAssessmentEU-15 Austria,Belgium,Denmark,Finland,France,Germany,Greece,Ireland,Italy,

Luxembourg,theNetherlands,Portugal,Spain,SwedenandtheUnitedKingdom

EU-27 Austria,Belgium,Bulgaria,Cyprus,CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,Slovakia,Slovenia,Spain,SwedenandtheUnitedKingdom

FGD Flue-gasdesulphurizationG8 GroupofEightGDP GrossDomesticProductGPI GenuineProgressIndicatorICLEI InternationalCouncilforLocalEnvironmentalInitiativesIECP IntegratedEnergyandClimateProgrammeIPCC IntergovernmentalPanelonClimateChangeIRP InternationalResourcePanelLCA LifecycleassessmentLED LocalEconomicDevelopmentLTMS LongTermMitigationScenario MEPS MinimumEfficiencyPerformanceStandardsMFA MaterialflowaccountingMLP Multi-levelperspectiveMSW MunicipalsolidwasteMTB MonetarytradebalanceNFSD NationalFrameworkforSustainableDevelopmentNIC NewlyIndustrializedCountriesNIPF NationalIndustrialPolicyFramework

Abbreviations and acronyms

vii

NOx Mono-nitrogenoxidesNOandNO2

NSSD NationalStrategyforSustainableDevelopmentOECD OrganisationforEconomicCo-operationandDevelopmentPTB PhysicaltradebalanceRNE GermanCouncilforSustainableDevelopment SEPA StateEnvironmentalProtectionAdministration(nowtheMinistryfor

EnvironmentalProtection)SMC SoundMaterialCycleSociety SME SmalltomediumsizedenterpriseSO2 SulfurdioxideSOIS SustainabilityOrientedInnovationSystemSOx SulfuroxidesSRES SpecialReportonEmissionsScenariosTCE TonofcoalequivalentTPER TotalPrimaryEnergyRequirement TPES TotalPrimaryEnergySupplyUK-SDC UnitedKingdom'sSustainableDevelopmentCommissionUN UnitedNationsUNCED UnitedNationsConferenceonEnvironmentandDevelopmentUNEP UnitedNationsEnvironmentProgrammeUNFCCC UnitedNationsFrameworkConventiononClimateChangeUS UnitedStatesWTO WorldTradeOrganizationYr Year

Unitsg gramskg kilograms(103grams)Mg megagrams(106grams)Tg teragrams(109grams)T ton(106grams)Mt megaton(106tons)Gt gigaton(109tons)J joulesW watts(J/s)GJ gigajoules(109joules)MW megawatt(106watts)m³ cubicmeter(103liters)Gm3 gigacubicmeters(109cubicmeters)


viii

Decouplinghumanwell-beingfromresourceconsumptionisattheheartoftheInternationalResourcePanel’s(IRP)mandate.ItisalsoattheheartoftheGreenEconomyInitiativeofUNEPthathasjustproducedanimpressivereportontheGreenEconomy(February2011).

Theconceptualframeworkfordecouplingandunderstandingoftheinstrumentalitiesforachievingitarestillinaninfantstage.TheIRPplanstocarryoutaseriesofinvestigationsondecoupling,eachofwhichwillresultinareport.ThereportswillaimtosupporttheGreenEconomyInitiativeandalsotostimulateappropriatepoliciesandactionatglobal,nationalandlocallevels.

Thisfirstreportissimplyanattempttoscopethechallenges.Thereportpresentsbasicfactsandfiguresonnaturalresourceflowsworldwide.Fourcountrystudiesembeddedinthereportshowthatconsumptionofnaturalresourcesisstillrisingrapidly.Drawingonthesedata,thereportattemptstooutlinetheissuesthatnowneedtobeaddressedtodecouplethesematerialandenergyflowsfromsocialandeconomicprogress.

Eveninthetwocountrieswhicharguablyhavemadethemostexpliciteffortstowardsdecoupling,JapanandGermany,andwhereatfirstglancedomesticresourceconsumptionshowsstabilizationorevenamodestdecline,deeperanalysisshowsthatmanygoodscontainpartsthathavebeenproducedabroadusingmajoramountsofenergy,waterandminerals.Thussomeoftheadvancedcountriesaremanagingtheproblemofhighresourceintensityby“exporting”itelsewhere.TheReportobservesthattrade–notsurprisingly–isgenerallyenhancingenergyuseandresourceflowsandthus,overall,impedingratherthanpromotingdecoupling.

Twocasestudiesfromdevelopingcountries,China,andSouthAfrica,showasteadyincreaseofresourceflows,probablyindicativeofthetrendsinallemergingeconomies.However,inthecaseofChinathereappearstobesomesuccessinthenationalefforttoachieverelativedecouplingthroughmodernizationoftheeconomyandexplicitpoliciestoreduceresourceintensity.Absolutereductionofenergyandresourceconsumptioncannotyetbeexpectedtobepartofthepoliciesofdevelopingcountries.

Onaworldwidescale,resourceconsumptionissteeplyontherise(seeFigure2.1),andresourceconsumptionisstillareliablecompanionofeconomicprosperity(seeFigure2.6).Allsuchempiricalfactsandfiguresshowthattheworld’sclimateandgeologicalenvironmentaresubjecttoeverincreasingpressures,whicharepushingthelimitsofsustainability.Thisshouldmakecitizensandpolicymakersimpatienttoreversethedangeroustrendsandimprovethesituation.

Preface

ix

Thereport’sIntroductionlistssomeofthechallengesthatwillbeaddressedinfuturereportsoftheIRP.Amongthepositiveprospectsaretechnologiesthatdelivermoreandbetterservicesusingmuchlessenergy,water,orminerals;policiesandappropriatemarketsignalsthatmakethetransitiontoacleanandlowresourceintensityeconomyattractiveandprofitable;andthespecialroleofurbanareasinforginginnovationstowardsasustainableeconomy.Suchopportunitiesforeffectivedecouplingoffernotonlylifelinesforthesurvivalofhumancivilizationbutalsoserveaspreconditionsforreducingpovertyandsocialinequalities.

Newreportsinthedecouplingagendapipelineincludeonesontechnologiesandpolicies,andonhowcitiescanaccelerateorbeimpactedbydecouplinginterventions.WehopethatthegrowinginterestinGreenEconomyissues,particularlyamongpolicy-makers,willbewellservedbythiswork.

WeareverygratefultotheteamcoordinatedbyprofessorsMarinaFischer-KowalskiandMarkSwillingforhavingcollectedtherelevantdataandpresentingaroundedpictureofresourceintensitiesandtheattemptstoreducethem.Wethanktheauthorsofthefourcasestudiesonnationaldecouplingpolicies,whichgivestronginputsandsupporttotheconclusionsofthereport.Wehopethatothersuchcasestudieswillbetriggeredbythepublicationandcirculationofthisreport,particularlybynationalinstitutions.

WealsowishtothankJeffMcNeely,memberoftheIRP,forservingasPeerReviewCoordinatorforthereport,andthe(anonymous)peerreviewerswhohavegonetothetroubleofreadingandcommentingthedraftreport;theirsuggestionshavecertainlyimproveditsquality.Finally,wewouldliketothanktheParisOfficeofUNEP,notablyMs.JanetSalem,forexcellentsupportworkthroughoutthepreparationofthereport.

Dr. Ernst Ulrich von Weizsäcker, Emmendingen,GermanyDr. Ashok Khosla,NewDelhi,IndiaCo-Chairs,InternationalResourcePanel(IRP)

31March2011


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A transition to a low carbon resource efficient Green Economy has become one of the leitmotifs of international efforts to evolve sustainable development in a rapidly changing 21st century.

Next year in Brazil, governments will meet again 20 years after the Rio Earth Summit of 1992 amid a landscape of persistent and emerging challenges and against a backdrop of recent and on-going crises that in part are being triggered by the way society manages or more precisely mismanages natural resources.

A Green Economy, in the context of sustainable development and poverty eradication, is one of the two central themes of Rio+20. It underlines that it is in the interests of all nations – developed and developing and state or market-led – to begin reducing humanity’s planetary impact in ways that reflect national circumstances.

This new report by UNEP’s International Resource Panel is an important part of this overall discourse and direction. It brings empirical evidence to bear on the levels of natural resources being consumed by humanity and the likely consumption levels if past trends are mirrored into the future.

Indeed, it suggests that such unsustainable levels of consumption could triple resource use by 2050 and it brings forward the powerful and urgent concept of ‘decoupling’ as a key action in order to catalyze a dramatically different path.

Decoupling at its simplest is reducing the amount of resources such as water or fossil fuels used to produce economic growth and delinking economic development from environmental deterioration. For it is clear in a world of nearly seven billion people, climbing to around nine billion in 40 years time that growth is needed to lift people out of poverty and to generate employment for the soon to be two billion people either unemployed or underemployed.

But this must be growth that prizes far more efficient resource management over mining the very assets that underpin livelihoods and our economic opportunities in the first place.

Overall the analysis suggests that over the coming decades the level of resources used by each and every person may need to fall to between five and six tons. Some developing countries are still below this level whereas others, such as India are now on average at 4 tons per capita and in some developed economies, Canada for example, the figure is around 25 tons.

Foreword

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Thereportpointsoutthattechnologicalandsystematicinnovation,combinedwithrapidurbanization,offeranhistoricopportunitytoturndecouplingfromtheoryintorealityontheground.ThereportspotlightsthecountriesofChina,German,JapanandSouthAfricawheregovernmentsaremakingheadwaywithconsciouseffortstostimulatedecoupling.

Itunderlinestoohowthecomplexitiesofthemodernworld,withglobalizedtradeandexportingeconomiesdemandthekindofsophisticatedanalysisprovidedbythePanelifdecouplingistobefullyunderstoodand–moreimportantly–realized.

ThesharpspikesincommoditypriceshaveservedtoremindtheinternationalcommunityoftherisksweallrunifatransitiontoaGreenEconomyisunfulfilledandpostponedintoanindefinitefuture.TheevidencefrompreparationsontheroadtoRio+20isthatgovernments,theprivatesectorandcivilsocietyrealizethisandarelookingfortheoptionsthatcanscale-upandacceleratesuchatransition.

DecouplingrepresentsastrategicapproachformovingforwardaglobalGreenEconomy–onethat“resultsinimprovedhumanwell-beingandsocialequity,whilesignificantlyreducingenvironmentalrisksandecologicalscarcities”.

IwouldliketothanktheInternationalResourcePanelundertheleadershipofAshokKhoslaandErnstUlrichvonWeizsäckerasco-chairsforitspioneeringworkpresentedinthisreport.Itnotonlyinspirescurrentgenerationsbutalsoprotectstheinterestoffutureones.

Achim SteinerUNUnder-SecretaryGeneralandExecutiveDirector,UNEP

Nairobi,Kenya,March2011


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The20thcenturywasatimeofremarkableprogressforhumancivilization.Drivenbyscientificandtechnologicaladvances,theextractionofconstructionmaterialsgrewbyafactorof34,oresandmineralsbyafactorof27,fossilfuelsbyafactorof12,andbiomassbyafactorof3.6(Figure2).Thisexpansionofconsumptionwas

notequitablydistributed,andithadprofoundenvironmentalimpacts.Over-exploitation,climatechange,pollution,land-usechange,andlossofbiodiversityrosetowardtotopofthelistofmajorinternationalconcerns.Oneresultwasthat‘sustainability’becameanover-archingglobalsocial,environmentalandeconomicimperativeamonggovernments,internationalorganizations,andtheprivatesector.Leadersincreasinglyunderstoodthatmakingprogresstowardsamoresustainableeconomyrequiresanabsolutereductioninresourceuseatagloballevel,whilehumanwell-beingdemandsthateconomicactivitiesshouldexpandandenvironmentalimpactsdiminish.

UNEP’sInternationalResourcePanel(IRP)hasappliedtheconceptof‘decoupling’tothischallenge.Whilethetermhasbeenappliedtoeverythingfromelectronicstophysicalcosmologytolinearalgebra,inthesenseusedheredecouplingmeansusinglessresourcesperunitofeconomicoutputandreducingtheenvironmentalimpactofanyresourcesthatareusedoreconomicactivitiesthatareundertaken.Figure1capturestheessenceofthetwokeyaspectsofdecouplingasappliedtosustainabledevelopment,namelyresourcedecouplingandimpactdecoupling.

Executive summary

Figure 1. Two aspects of ‘decoupling’

Human well-being

Economic activity (GDP)

Resource use

Environmental impact

Resource decoupling

Impact decoupling

Time

xiii

Thereportfocusesontheextractionoffourcategoriesofprimaryrawmaterials–constructionminerals,oresandindustrialminerals,fossilfuels,andbiomass–whichtogetherareestimatedtobeharvestedatarateof47to59billionmetrictons(47–59Gt)peryear(2005data),withcontinuedincreasesintothefutureacleartendency(seeFigure2).Thesteadyincreaseintheuseoftheserawmaterialshasbeenaccompanied,orperhapsprompted,bycontinuouslydecliningpricesofmostofthesecategoriesofresources.Decliningpricesmaybeinterpretedasreflectingincreasingsupply,butaremorelikelytoreflectmoreefficientmeansofextractionandstructurallyweakmarketpositionsforcertainresource-richresource-exportingdevelopingcountries.Ontheotherhand,manycriticalresourcesarebecomingmoreexpensivetoextract,withpetroleumintheArcticandintheopenseabeingoutstandingexamples.Morerecently,atleastsomeoftheseresourcesareshowinggreaterpricevolatility,whichmaysupportamorerapidtransitionbasedonthedecouplingofgrowthratesfromratesofresourceuseandnegativeenvironmentalimpacts.

Figure 2. Global material extraction in billion tons, 1900–2005

Source: Krausmann et al., 2009

Material extraction Billion tons

100

80

60

40

20

0

50

40

30

20

10

01900 20001910 1920 1930 1940 1950 1960 1970 1980 1990

● Ores and industrial minerals● Fossil energy carriers● Construction minerals● Biomass● GDP

GDPtrillion (1012) international dollars

Decouplingwillrequiresignificantchangesingovernmentpolicies,corporatebehaviour,andconsumptionpatternsbythepublic.Thesechangeswillnotbeeasy,andthispaperwillnotattempttochartthecoursetowardtheirachievementorfullyexploreallofthechallengestheconceptposes.Rather,itwillseektobuildunderstandingofthecriticalconceptofdecoupling,whichprovidesthefoundationfortheworkoftheInternationalResourcePanel(IRP).

Thisreportisenvisagedasthefirstinashortseries,withthesubsequentreportsfromtheDecouplingWorkingGroupoftheIRPseekingtorespondtothemostsignificantchallengesthatareidentifiedhere(Chapter5).OtherworkoftheIRPwillapplythe


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conceptofdecouplingtogreenhousegas(GHG)mitigationtechnologies,metalflowsandrecycling,landandsoil,andwater.

HavingreviewedthetrendsintheuseofnaturalresourcesandaccompanyingundesirableenvironmentalimpactsinthefirstsectionofChapter2,thelastsectionofthatchapterconsiderspossiblefutureimplicationsbypresentingthreebriefscenarios:(1)businessasusual(leadingtoatriplingofglobalannualresourceextractionby2050);(2)moderatecontractionandconvergence(requiringindustrializedcountriestoreducetheirpercapitaresourceconsumptionbyhalftheratefortheyear2000);and(3)toughcontractionandconvergence(aimedatkeepingglobalresourceextractionatitscurrentlevels).Noneofthesescenarioswillleadtoactualglobalreductionsinresourceuse,butallindicatethatsubstantialreductionsintheresourcerequirementsofeconomicactivitieswillbenecessaryifthegrowingworldpopulationcanexpecttoliveunderconditionsofsustainableresourcemanagement.

Technologicalinnovationshaveoftenledtogreaterresourceconsumption;however,innovationsinresourceextractionandusesystems(Chapter3)willberequiredtoenabledecouplingtotakeplaceindifferentsettings,withadiversityofapproachesbeingapplied.Economicinnovationswillalsobeessential,perhapsevenleadingtoasubstantiallyrevisedprogressindicatorthatcomplementsGDPwithenvironmentalandsocialconcerns.Inthiscontext,UNEP’sGreenEconomyInitiativeseekstocouplearevivedworldeconomywithreducingecosystemdegradation,waterscarcity,andcarbondependence.Theincreasingtrendofresourceconsumptionhasbeendriveninpartbytechnologicalinnovation,andsuchinnovationsthatcaninsteadsupportdecouplingwillbediscussedinmoredetailinfuturereportsoftheDecouplingWorkingGroup.

DrawingespeciallyoncasestudiesfromSouthAfrica,Germany,China,andJapan(fullcasestudiesareincludedinChapters6–9),Chapter4exploressomeofthewaysthatdecouplingaffectsdevelopment.Onemajorlessonlearnedisthattherisingeconomicandenvironmentalcostsofresourcedepletionandnegativeenvironmentalimpactshaveaffectedtheeconomicgrowthanddevelopmenttrajectoriesofthesecountries,leadingallofthemtoadoptpoliciesthatcommitbothgovernmentsandindustriestoreducetheamountofresourcesusedforeachunitofproduction(orincreaseresourcedecoupling)andreducenegativeimpactsontheenvironment(orimplementimpactdecoupling).Thecasestudiesalsoshowthatconceptsofresourceefficiency,resourceproductivity,dematerialization,materialflowsanddecouplingareusedinsomewhatdifferentwaysinthesecountries,indicatingthattheseideascanbeexpectedtoevolveinnationally-specificwaysthatreflecttheuniquecircumstancesofeachcountry.Thisdiversityinapproachestodecouplingcanbetakenasasignofthestrengthoftheconcept.

Chapter4discussesdecouplingasappliedtotradeandthedistributionofresources,makingthekeypointthatmanyimportedresourcesaresubsequentlyexportedinadifferentform,suchasmanufacturedgoods,whichmaybeinterpretedasshiftingatleastpartoftheresponsibilityforconsumption(andthereforedecoupling)totheultimateconsumer.Tradeisofgrowingconcern,asinternationallytradedmaterialsincreasedfrom5.4billiontons(5.4Gt)in1970to19billiontons(19Gt)in2005,complicatingtheapplicationofdecouplingbyobscuringresponsibilityforit.Decouplingpotentiallycanalsoenhanceequityamongnations,drawingontheconceptof‘metabolicrates’(resourcesusedpercapita)asanobjectivemeansofcomparingresourceconsumptionratesofdifferentcountries.Overcominginequityneedsparticularattention.Asanindicatorofinequityinresourceconsumption,therichest20%oftheworld’spopulationwere

xv

responsiblefor86%ofconsumptionexpenditurein1998,whilethepoorest20%hadtosettleforjust1.3%ofsuchexpenditure.

Chapter4alsosuggeststhatinnovationtowardsdecouplingmaybedevelopedespeciallyinurbansettings,whereanincreasingmajorityoftheworld’speoplewillliveinthecomingyears.Ithasalreadybeendemonstratedthatmoredenseformsoflivingallowforlowerconsumptionofmanyrawmaterialsatthesamelevelsofmaterialcomfort,suggestingfertilegroundsforfurtherdecoupling.Decouplingmayalsoexperiencea‘reboundeffect’,whichrequiresaddressingtheconcernthatefficiencygainsinresourceusemayparadoxicallyleadtogreaterresourceuse.

Someofthemajorchallengesofdecouplingthatremaintobeaddressedinclude:

• Howcantheunderstanding of global resource flows and their associated environmental impacts becoupledtorelatedchallenges,suchasclimatechangeandtherolethatecosystemservicesplay?

• Howcanpolicymakers(andthegeneralpublic)beconvincedabouttheabsolute physical limits tothequantityofnon-renewablenaturalresourcesavailableforhumanuseundercurrenteconomicconditions?

• Howcanthedecoupling that has already started to happen atleastinsomecountriesleadtorapidescalationsininvestmentsininnovationsandtechnologiestoacceleratedecouplingmoregenerally?

• Howcanappropriate market signals be developed tohelpresourceproductivityincreasesbecomeahigherpriority?

• Howcan cities bestbecomethespaceswhereingenuity,resources,andcommunitiescometogethertogeneratepracticaldecouplinginthewayscitiesproduceandconsume?

• Howcandecouplingcometobeacceptedasanecessarypreconditionforreducing the levels of global inequalityandeventuallyhelperadicatepoverty?

Thispaperpresentssubstantialevidencesupportingtheneedforbothresourcedecouplingandimpactdecoupling,andindicatessomeexamplesofwheresuchdecouplingisactuallyoccurring.Whiledifferentcategoriesofresourceshaveverydifferentkindsofenvironmentalimpacts,progresstowarddecouplinghasbeenmadeinconstructionminerals,oresandindustrialminerals,fossilfuels,andbiomass.Butthisprogresstodatehasbeenindicativeratherthandecisive,andafargreatereffortwillberequiredtoconvincekeyaudiencesofthecriticalimportanceofdecoupling.ThefutureworkoftheInternationalResourcePanelisdesignedtosupportsuchefforts,inhopesofleadingtoaneffectivetransitiontoaGreenEconomythatenhanceshumanwelfarewhilesustainingenvironmentalresources.


xvi

Theobjectiveofthisstudyistoprovideasolidfoundationfortheconceptofdecoupling,clearlydefiningkeytermsandconceptsandindicatingitsmanyapplicationstoresourcemanagement.Itassesseswhetherdecouplingisalreadytakingplace,andidentifiesthedrivingfactors,bothtechnologicalandeconomic.

Thisreportaimstoalsoprovidesomeindicationsofthekindsofpolicymeasuresandconsiderationsthatmaybeneededtostimulatedecoupling.Theword“Resources”usuallyreferstomaterials,water,energyandland.Thisreportfocusesonmaterialresources,namelyfossilfuels,minerals,metalsandbiomass.Assuch,itisnottheintentionoftheInternationalResourcePanel(IRP)tocoverallresourcesinasinglereport,ratherthisreportwillbecomplementedbyconcurrentreportsoftheIRPonlandandsoil,water,metalsandothertopics.

FutureworkoftheIRPwillbuildonthefoundationofthisscopingreportondecoupling.Thefirstprioiritywillbetoidentifywhichproductgroupsandmaterialshavethegreatestnegativeenvironmentalimpacts,orarereachingalarminglevelsofscarcity.Thepriorityattentionwillbegiventothoseresourcesthatareamenabletopolicyinterventionsandimprovedformsofmanagementthatwilldecreaseanynegativeimpactswhilecontinuingtocontributetohumanwellbeing.TheIRPexpectstoidentifyasubstantiallistofsuchresources,andprovidepolicyoptionsforimprovingtheirmanagement.Itisexpectedthatthismoresystematicapproachwillleadtoothers–governments,theprivatesector,andcivilsociety–adoptingdecouplingasanessentialcomponentofsustainabledevelopment.

OneIRPworkinggroupisfocusingontheflowsofmetals,providingaccurateassessmentsoftheglobalflowsofmetalsandindicatingwhererecyclingandreusingofmetalswillreducedemandforopeningofnewmines(whichareoftenassociatedwithnegativeenvironmentalimpacts).Thefirstreportsfromtheworkinggrouparealreadyindicatingsomekeymetalsthatcanberecycledatfarhigherlevels,withsubstantialeconomicsavingsandreducingenvironmentalimpacts(inotherwords,resourcedecoupling).

Anotherworkinggroupisaddressingwater,ascarceresourceinmanypartsoftheworld.Abetterunderstandingofthehydrologicalcycleisespeciallychallengingasclimatechangeisleadingtounpredictabledistributionofwaterinbothtimeandspace.Torrentialrainfallsandsubsequentdroughtsareclearindicatorsthatimprovedwatermanagementisanessentialpartofhumanwellbeing.Theworkinggrouponwaterwillbeworkingatthelandscapescale,examiningnewapproachestomoreefficientuseofwater(suchasdripirrigation),demonstratinghowbothagricuutreandindustrycanenhancewater-useefficiency.Methodsbeingassessedincludeimprovedefficiencyinwaterharvesting,moreeffectivewaterstorage,morecomprehensiveapproachestowatersharingsothatallusershaveafairallocationofwater,greatlyenhancedrecyclingofwater,andreducingdemand.Already,manycompaniesintheprivatesectorareenhancingwaterefficiencyin

Objective and scope

xvii

theirproductionprocessesandsignficantlyreducingwaterpollution.TheIRPwillbeassessingthevariousapproachesandprovidingpolicyoptionsonhowwater-useefficiencycanbesubstantiallyimprovedacrossmultiplesectors.

Waterisanessentialresourceforvirtuallyallaspectsofhumanenterprise,fromagriculutretoenergytoindustrialproductiontohumanhealth.ManyoftheseapplicationswillreceiveattentionfromIRPworkinggroupsinduecourse,butoneurgentmatteristhemoreefficientuseoflandandsoil.Withfoodpricesnowatanall-timehigh,duetofactorssuchasincreasedenergyprices,growingdemand,climatechange,conversionoffoodcropstobiofuels,andmanyothers,itbecomesallthemoreimportanttoassessthemanagementoflandandsoilsatagloballevel.AnewIRPworkinggroupisnowbeginningsuchanassessment,withtheobjectiveofenhancingsustainablemanagementoflandandsoils.Landisseeninthebroadsenseoflanduseandlanduseplanning,whichisbecomingmoreurgentasmultipledemandsarebeingplacedonthislimitedresource;indeed,theamountoflandmaybedecliningassealevelsrise,makingitallthemoreimportantthatlanduseiswellinformedbysolidscienceaswellassocialandeconomicfactors.Thefocusonsoilisonmaintainingitsproductivity,includingthediversityofsoilmicro-organisms,reducingpollution,anddevelopingnewapproachestomaintainingsoilproductivtywithoutexcessiveuseofchemicalfertilizers.Significantinvestmentsarebeingmadebybothgovernmentsandtheprivatesectortowardtheseends,andtheIRPworkinggroupwillbeworkingwiththemtoassessthemostpromisingapproachestodecouplingtheuseoflandsandsoilsfromtheeconomicproductionoftheseimportantnaturalsystems.

Astheconceptofresourcedecouplingisfurtherdeveloped,theIRPexpectstoidentifyothermaterialsandresourcesthatcanbenefitfromdecoupling.Sustainabledevelopmentandnewapproachesto"greeneconomics"willgreatlybenefitfromthecontributionsthattheIRPwillbemakingthroughitsworkondecouplingresourceconsumptionfromeconomicgrowth.


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1.1 Why decoupling?

Humanwell-beinganditsimprovement,nowandforastillgrowingworldpopulationinthefuture,isbasedupontheavailabilityofnaturalresourcessuchasenergy,materials,waterandland.Economicdevelopmentsofarhasbeenassociatedwitharapidriseintheuseoftheseresources.Manyofthemarebecominglessabundantrelativetodemand,andsomeruntheriskofcriticalscarcityinthenearfuture(asindicatedbydeclininggradesoforesbeingmined,inFigures2.12,2.13,and2.14).Undesirableenvironmentalimpactscanarisefromanypartofthelifecycleofresources:inthephasesofextraction,production/manufacture,consumption/useorpost-consumption.Theseimpactsmaybecausedbydeliberateinterventionsintonaturalsystemssuchaslandcoverchangeandresourceextraction,orbyunintendedsideeffectsofeconomicactivities,suchasemissionsandwastes.Thus,afocusondecouplingrequiresattentionbothtotheamountofresourceuselinkedwitheconomicactivity,andtotheenvironmentalimpactsassociatedwiththisresourceuseatallstagesofthelifecycle.Theseimpactsmayleadtoadisruptionoftheecosystemservicesthatareessentialtohumanwell-being.

ThisReportisoneinaseriesofreportsbytheInternationalResourcePanel(IRP)thatseekstoassessthekeychallengesofdecouplingresourceuseandnegativeenvironmentalimpactsfromeconomicactivity.Addressingthesechallenges

successfullywillcontributetotheoverallgoalsofmeetingtheneedsofagrowingworldpopulation,eradicatingpoverty,andsupportingeconomicdevelopment,withaminimumofstrainontheworld’sresourcebaseandwithoutthreateningfutureearthandecosystemservices.Inordertoachievethesegoals,naturalresourceuseandassociatednegativeenvironmentalimpacts,onaglobalandlongtermlevel,mustasfaraspossiblebedecoupledfromtheeconomicactivityrequiredtosupportagrowingpopulation.

Naturalresourcescanbegivenabroaddefinitionthatincludesanythingthatoccursinnaturethatcanbeusedforproducingsomethingelse.Thisinclusivedefinitioncancoverthesongofabirdinspiringacomposer,theshineofastarusedbyacaptaintofindhisway,orastoneinafarmer’sfield.Thefirsttwoare‘immaterialresources’,whoseusehasnoeffectonthequalitiesthatmakethemuseful;norcantheyeasilybegivenaneconomicvalue.Thethird–therockinthefield–isa‘materialresource’whosevalueischaracterizedbythequalitiesthatrenderitusefulforcertainapplications.Itsvalueforbuildingawall,forexample,isdifferentfromitsvalueifitismerelyanannoyanceforthefarmertryingtoploughhisfield.Butiftherockcontainsgold,itsvalueissuddenlyincreased,assumingthatthefarmerrecognizesthisvalue.

Usingimmaterialresourcesdoesnotchangethequalitiesthatmakethemuseful,orreducetherangeofavailableapplications.Thesamesongofthebird

Introduction1

1

maybeusedbystillanothercomposerorgivehighly-valuedpleasuretoabird-watcher,andthesamestarlightcanprovideinformationforhundredsofcaptainsandlaterprovideinformationtoastronomersaboutthecreationoftheuniverse.Withmaterialresources,makinguseofthemcaneliminateatleastsomeofthequalitiesthatmakethemusefulforthepurposeathand.Arockusedtobuildawallcannotthenbeusedtobuildanotherwallorbeconvertedtogoldjewellery(ifitcontainsgold)withoutdestroyingthefirstwall.Materialresourcesdonotdisappearthroughtransformation(basicphysicsdoesnotallowforthedisappearanceofenergy/matter),buttheirpotentialusefulnessforthesamepurposeisnolongeravailable.Howmuchofaresourcedeclinesasitisused(orconvertedfromonestatetoanother)dependslargelyonhowmuchtheresourceismodifiedthroughuse.

Mostmaterialresourcesarescarceineconomicterms,whichprovidesthebasisfordeterminingtheirprice.Butafewmaterialresources,suchaswind,sunshineortidalenergy,aresoabundantthattheycannotpossiblybedepleted.Theireconomicpriceisdeterminednotbytheirsupplybutratherbythecostofconvertingthemintoformsthatcanthenbeappliedtootheruses(forexample,runningwindfarms,solarpanels,ortidalenergygenerators).

Thebroaddefinitionprovidedabovemakeseverythinginthematerialworldpotentiallyamaterialresource,andeverythingmaybeputtoatheoreticallyinfinitenumberofuses.1Becauseresources and resource use conceptually serve as one of the most important links between the environment and economic activities,thisreportchoosesamoreprecisedefinitionofmaterialresourcesthatconsidersonlytheactuallyusedresourcesandthusbetter

1 This wide definition was adopted by the Commission of the European Communities (COM 527, 2003) in preparation of its sustainable resource strategy, and also used by the Technical Report on the Environmental Impact of the Use of Natural Resources (JRC 2005, p.11)

compliestotheuseofthistermineconomics:Material resources are natural assets deliberately extracted and modified by human activity for their utility to create economic value. They can be measured both in physical units (such as tons, joules or area), and in monetary terms expressing their economic value.Suchanarrowerfocusallowsgeneratingafiniteand(onthemostaggregatelevel)shortlistof‘materialresources’forwhichalso,inprincipleatleast,accountingschemesexist:energy,materials,waterandland.

Asfarasresourcesareconcerned,thisreportseekstoremaincomplementary,notreplicatingexistingsimilarefforts.Itwillfocusonmaterialresources,withthemainclassesbeingbiomass,fossilfuels,industrialmineralsandores,andconstructionminerals.Itwillpayrelativelylittleattentiontoenergyresourcesandthecarboncycle,astheseissuesarewelladdressedbyIPCCassessmentsandbytheongoingGlobalEnergyAssessment(GEA)beingconductedbyInternationalInstituteforAppliedSystemsAnalysis(IIASA)2.ItwillleaveissuesofwaterresourcesandlandandsoilresourcestofuturereportsunderpreparationbytheIRP.

Theuseofmaterialresourcesinthisreportwillbeaddressedatglobal,national,andcitylevels,whereinformationonpopulationandeconomicactivitylevel(GDP)isavailable.Thishasbeencomplementedbyfourcasestudiesofcountriesthathavetakenaparticularpolicyinterestindealingwithdecouplingresourceusefromdevelopment:China,Germany,JapanandSouthAfrica.Inafollow-upreportondecoupling,theIRPplanstosupplementthiscountry-levelfocuswithamoresector-andtechnology-orientedfocus.

Thedegreetowhichresourceusecausesdetrimentalenvironmentalimpactsdependsnotonlyontheamountofresourcesused,butalsoonthetypesofresourcesusedandonthewaysinwhich

2 See www.iiasa.ac.at/Research/ENE/GEA/index_gea.html


2

theyareused(seeIRPreportontheEnvironmentalImpactsofProductionandConsumption3).

This report seeks to establish the quantitative frame from which strategies for decoupling can be designed. Fortheassessmentofresourceusesandtheirenvironmentalimpacts,aglobalandlong-termperspectivewillbeemployed.However,whilethechallengesofresourcedepletionandenvironmentaldisruptionareglobalchallenges,theyaffectpeopledifferentlyindifferentregionsoftheworld.Extractionofaresource,itsconversionintoacommodity,anditsultimateconsumption,oftenoccurindifferentcountries,andthebenefitsaswellastheenvironmentalimpactsassociatedwitheachstageinthelifecyclearewidelydistributedacrosstimeandspace.Thisreportalsoassessesthesedistributionalissues.

Thisreportisstructuredasfollows:Chapter1definesdecouplingmore

3 See www.unep.org/resourcepanel

specifically.Chapter2thendealswithobservedtrendsinglobalresourceuseandassociatedundesirableenvironmentalimpacts,andcloseswithasectiononscenariosforglobalresourceuseuptotheyear2050.Chapter3discussestheneedforsysteminnovationsinordertoachievedecouplingbeyondtheincrementalimprovementsofresourceproductivitythathavebeendemonstratedasbeingpartofbusiness-as-usual.Itcloseswithlessonsfromthefourcountrycasestudies,whicharespreadacrossdifferentstagesofdevelopment,andeffortsofthesecountriestoachievedecoupling.Chapter4describestheinterrelationofdecouplinganddevelopmentdynamics:theroleoftradeandthelinkbetweendecoupling,developmentandinequality,andreboundeffects.Themajorpolicychallenges,derivingfromtheoutcomesofthesechaptersaresummarizedinChapter5,andthefourcountrycasestudiesareincludedinChapters6to9.

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1. Introduction

3

1.2 Defining decoupling

1.2.1 Roots of the decoupling conceptTheOECDappearstohavebeenthefirstinternationalbodytohaveadoptedtheconceptofresourcedecoupling,treatingitasoneofthemainobjectivesintheirpolicypaper‘EnvironmentalStrategyfortheFirstDecadeofthe21stCentury’(adoptedbyOECDEnvironmentMinistersin2001)4.TheOECDdefinesdecouplingsimplyasbreakingthelinkbetween‘environmentalbads’and‘economicgoods’.5

Muchearlier,theWorld Business Council for Sustainable Development(WBCSD)coinedtheterm‘eco-efficiency’,whichisachievedthroughthedeliveryof“competitivelypricedgoodsandservicesthatsatisfyhumanneedsandbringqualityoflifewhileprogressivelyreducingenvironmentalimpactsofgoodsandresourceintensitythroughouttheentirelifecycle”(Schmidheiny,1992).Thus,withoutmentioningtheword‘decoupling’,thesubstancewasalreadybeingused,includingthelifecycleapproach.

Similarly,theEuropean Union(EU)in2005adoptedtheLisbonStrategyforGrowthandJobs,6whichgavehighprioritytomoresustainableuseofnaturalresources,andcalledupontheEUtotaketheleadtowardsmoresustainableconsumptionandproductionintheglobaleconomy.ThiswasfollowedbytheadoptionoftheEU’sThematicStrategyontheSustainableUseofNaturalResourcesunderthe6thEnvironmentalActionProgram(6thEAP).Thisstrategyhastheobjectiveofachievingamoresustainableuseofnaturalresourcesbyreducingthenegativeenvironmentalimpacts generatedbytheuseofnaturalresources whileensuringeconomicgrowth.TheStrategyrecognizesdecouplingofbothresourceuseanditsimpactsfromeconomicgrowth.

4 http://www.oecd.org/dataoecd/33/40/1863539.pdf5 http://www.oecd.org/dataoecd/0/52/1933638.pdf6 Lisbon Strategy for Growth and Jobs, 2007, document available at

ec.europa.eu/economy_finance/structural_reforms/growth_jobs/index_en.htm [accessed 01/07]

Inadevelopingworldcontext,theSustainableDevelopmentandHumanSettlementsDivisionoftheUnited Nations Economic Commission for Latin America and the Caribbean (ECLAC)recommendedthatsustainabledevelopmentfordevelopingeconomiescouldbestbeachievedbypursuingastrategyof“non-materialeconomicgrowth”(Gallopin,2003).Althoughthespecificterm‘decoupling’wasnotusedinthisreport,thedistinctionmadebetween‘material’and‘non-material’economicgrowthwaseffectivelyaboutdecouplinggrowthfromresourceconsumption.

Inlinewiththisliterature,resourcedecouplingcouldbereferredtoasincreasingresourceproductivity,andimpactdecouplingasincreasingeco-efficiency.

Resource decoupling meansreducingtherateofuseof(primary)resourcesperunitofeconomicactivity.This‘dematerial-ization’isbasedonusinglessmaterial,energy,waterandlandresourcesforthesameeconomicoutput.Resourcedecouplingleadstoanincreaseintheefficiencywithwhichresourcesareused.Suchenhancedresourceproductivitycanusuallybemeasuredunequivocally:itcanbeexpressedforanationaleconomy,aneconomicsectororacertaineconomicprocessorproductionchain,bydividingaddedvaluebyresourceuse(e.g.GDP/DomesticMaterialConsumption).Ifthisquotientincreaseswithtime,resourceproductivityisrising.Anotherwaytodemonstrateresourcedecouplingiscomparingthegradientofeconomicoutputovertimewiththegradientofresourceinput;whenthelatterissmaller,resourcedecouplingisoccurring(seeFigure1.1).

Impact decoupling,bycontrast,requiresincreasingeconomicoutputwhilereducingnegativeenvironmentalimpacts.Suchimpactsarisefromtheextractionofrequiredresources(suchasgroundwaterpollutionduetominingoragriculture),


4

production(suchaslanddegradation,wastesandemissions),theusephaseofcommodities(forexampletransportresultinginCO2emissions),andinthepost-consumptionphase(againwastesandemissions).Methodologically,theseimpactscanbeestimatedbylife cycle analysis (LCA)incombinationwithvariousinput-outputtechniques(seeUNEP,2010b).Impactdecouplingmeansthatnegativeenvironmentalimpactsdeclinewhilevalueisaddedineconomicterms.Onaggregatesystemlevelssuchasanationaleconomyoraneconomicsector,itismethodologicallyverydemandingtomeasureimpactdecoupling,becausemanyenvironmentalimpactsneedtobeconsidered,theirtrendsmaybequitedifferentornotevenmonitoredacrosstime,andsystemboundariesaswellasweightingproceduresareoftencontested.

Adistinctioncanbemadebetween‘relative’and‘absolute’decoupling.Relativedecouplingofresourcesorimpactsmeansthatthegrowthrateoftheenvironmentallyrelevantparameter(resourcesusedorsomemeasureofenvironmentalimpact)islowerthanthegrowthrateofarelevanteconomicindicator(forexampleGDP).Theassociationisstillpositive,buttheelasticity

ofthisrelationisbelow1(Mudgaletal.,2010).Suchrelativedecouplingseemstobefairlycommon.Withabsolutedecoupling,incontrast,resourceusedeclines,irrespectiveofthegrowthrateoftheeconomicdriver.ThislatterrelationisshownbytheEnvironmentalKuznetsCurvethatclaimsthatifprosperityrisesbeyondacertainpoint,theenvironmentalimpactofproductionandconsumptiondecreases.Absolute reductions in resource use arerare(DeBruyn,2002;StegerandBleischwitz,2009);theycan occur only when the growth rate of resource productivity exceeds the growth rate of the economy.

ThisassessmentdealswithresourcedecouplingandimpactdecouplingasthetwointerrelatedmodesunderthedecouplingconceptasusedbytheIRP.Strategically,theydifferinvariousrespects.Resourcedecouplingseekstoalleviatetheproblemofscarcityandrespondtothesustainabilitychallengeofintergenerationalequitybyreducingtherateofresourcedepletion,whilereducingcostsbyraisingresourceproductivity.Resourcedecouplingmaybeexpectedtosimultaneouslyreducetheenvironmentalimpactsofcertainresourcesoverthefull

Figure 1.1. Stylized representation of resource decoupling and impact decoupling

Human well-being

Economic activity (GDP)

Resource use

Environmental impact

Resource decoupling

Impact decoupling

Time

1. Introduction

5

lifecyclebyusinglessofthem.Resourcedecouplingisrelativelyeasytomeasureandmonitor,butmaybemoredifficulttoachievethanimpactdecoupling.7Bycontrast,impactdecouplingmeansusingresourcesbetter,morewiselyormorecleanly.Reducingenvironmentalimpactsdoesnotnecessarilyhaveamitigatingimpactonresourcescarcityorproductioncosts,andmayevensometimesincreasethese.Anexampleofthisiscarboncaptureandstorage(CCS):sincethistechnologycurrentlyrequiresmoreenergyperunitofoutput,resourcedecouplingdoesnottakeplace,butsinceCO2isnolongerreleasedintotheatmosphere,theenvironmentalimpactoverthelifecycleisreduced.

Thisdiscussionofthetwomodesofdecouplingbeingconsideredhereimpliesthat:

1. resource decoupling is particularly important when:

• aspecificresourceisscarceanditsfurtherdepletioncouldfrustratesocietalprogress(suchasoil,rareminerals,orfertilelandtoproducefoodforthegrowinghumanpopulation)(seeUNEP,2010a;UNEP,2010b)

• aspecificresourceposeshighenvironmentalrisksthatcannotbealleviatedbyusingtheresourcebetter.Reductionofitsuseisthentheonlysolution.Historicalexamplesareasbestosandchlorofluorocarbonsusedincoolingdevices.Atpresent,fossilfuelsare

7 The well-known “Jevon’s paradox” states that productivity increases, in the end, do not result in resource savings but in accelerated economic growth. This rebound effect is discussed further in section 4.3. Some argue that the exergy – the energy available to be used – of resources is an indispensable driver of economic growth (Ayres, 2005; Ayres and Warr, 2005).

themostimportantcase,evenifusingCCScouldalleviatesomepartoftheCO2problemthroughimpactdecoupling.

2. impact decoupling is particularly important when:

• theuseofaresourceposesimmediatethreatstohumanandecosystemhealth(suchastoxicemissions,persistentorganicpollutants,orimpactsonsoilfertility)

• technologicalsolutionshavesubstantialpotentialtopreventharmtohumansandecosystems.

Whilenumerousformsofeconomicactivityhavenegativeenvironmentalimpactsofoneformoranother,somearedeliberatelydesignedtohavepositiveenvironmentaleffects,forexampleforestreserves,agriculturalset-asides,orpaymentsforecosystemservices.Socio-technicalchangesthathavereducednegativeenvironmentalimpactsinthepastmayhaveresultedinthedecouplingofeconomicgrowthfromcertainspecificimpacts,whileotherimpactsremainedunchangedorevenaccelerated.Therefore,itcanbeproblematictoconsiderimpactdecouplingingeneralwithoutacknowledgingthatspecificinterventionscanhaveunintendedconsequencesorelseignoresomeimpacts.Itfollowsthatitmaybedifficulttodesignasystem-widesetofinterventionscapableofdecouplingresourceusefromallnegativeenvironmentalimpactssimultaneously.


6

Designingstrategiesforadecouplingofeconomicactivityfromundesirableenvironmentalimpactsrequiresanimproved

understandingoftrendsandtheirdrivers.Thischapterwillassesspasttrendsandprojectresourceconsumptionintothefuturetooutlinethemagnitudeofthechallenge.Thefirstsectionwilldealwiththetemporaldynamicsofresourceuse1ofmaterials,waterandland.2Whereverpossible,thesourcesusedwillemployaglobalandlong-termperspective.Thesecondsectionwillinquireintothedynamicsofrelatedenvironmentalimpactsandassesstowhatdegree,andinwhichrespects,environmentalimpactshavefollowedthedynamicsofresourceuse,andwhereanadditionalimpactdecoupling–allowingimpactstobedissociatedfromincreasingresourceuse–couldbeobserved.Finally,thethirdsectionwillpresentthreescenariosforfutureresourceuseuntiltheyear2050,baseduponprevioustrendsandtheexistingknowledgeofdrivers.

2.1 Note on methodology

Whilemeasuringconsumptionofenergyresourcesisfairlystraight-forward,

1 From now on, for reasons of brevity and simplicity, we shall use the term “resources” to mean “natural resources”. Of course, economic activity is based on a number of different resources, apart from natural resources, in particular also on capital, labour, and knowledge.

2 The terms of reference for this working group did not include a focus on energy resources, as they are dealt with in many other contexts. We are aware that from several perspectives, the energy (or exergy) aspects of natural resources are crucial (Ayres & Warr, 2005; Smil, 2008), but the purpose of the task at hand is to illuminate other aspects of resource use that are often neglected.

seekingaconsistentmethodologyfordocumentingtheextentofuseofotherresourcesisarelativelynewfieldthatisstillunderdevelopment.

For material resources,suchamethodologyandsetsofindicatorshavebeendevelopedonlyrecentlyunderthetermof‘materialflowaccounting’(MFA),whichaccountsforallmaterialsusedineconomicactivities.Someapproaches(forexampleBringezuetal.,2004;Rodrigues&Giljum,2005)accountnotonlyfortheresourcesusedineconomicprocesses,butalsoforthetotalmaterialmobilizedduringtheextractionprocess(i.e.the‘totalmaterialrequirement’).Thisisclearlyjustified,astheseadditionallymobilizedmaterialsareresponsibleforsubstantialadditionalimpacts,thoughtheanalysiscanbecompromisedbydatareliability.Forconvenienceandclarity,thisreportwillfocusonmaterialsactuallyusedineconomicprocessesmeasuredintermsoftheirmass(metrictons),i.e.totalusedextraction.Asaruleofthumb,totalextractionisaboutdoubletotalusedextraction.TheMFAmethodologygeneratesaccountsinphysicaltermsthatareanalogoustonationalaccountingineconomicterms,andaccordingtothesamesystemboundaries(Eurostat,2001;Eurostat,2007).Thusityieldsdatathatsupportananalysisofdecouplingofeconomicactivityfrommaterialresourceuse.Untilnow,SERI(2008)istheonlydatasetpresentingtime-seriesdataonglobalmaterialsextraction,country-by-

Global long-term trends in the use of natural resources and in undesirable environmental impacts2

7

country.3 Itprovidesaquantitativeestimateofglobalresourceextractionfortheperiod1980to2005.Basedpartlyonthisdataset,andonothersources,Krausmannetal.(2009)recentlypublishedacentennialtimeseriesofglobalmaterialextractionanduse(seeFigure2.1).

Forassessing the use of water and land inrelationtoeconomicactivities,thedatasituationissomewhatlesswelldeveloped.Whileestimatesofglobalfreshwateruseinlongtimeseriesareavailable(seeGleick,2009;Hoekstra&Chapagain,2007;AlcamoandVörösmarty,2005;ShiklomanovandRodda,2003),nocountry-by-countrydatabaseisavailabletosupportananalysisofthecouplingbetweeneconomicactivityandwateruse.Thispaucityofdatais

3 See, for example, Adriaanse et al., 1997; Rogich et al., 2008; Eurostat, 2007; Gonzalez-Martinez and Schandl, 2008; and Russi et al., 2008. Economy-wide material flow accounts for historical periods have been compiled for a growing number of individual countries. Most of these country-level case studies document historic trends ranging from several years up to several decades. Only very few studies include time periods before 1970 (see e.g. Matos and Wagner, 1998; Schandl and Schulz, 2002; Petrovic, 2007). Several attempts have been made to compile global country-by-country material flow accounts for recent years (Schandl and Eisenmenger, 2006; Behrens et al., 2007; Krausmann et al., 2008b).

relatedtothefactthatwateruseisoftenconsideredafreecommongoodnotreflectedineconomicstatistics.Systemboundariesalsoraiseproblems,asthesamewatercanbeusedmanytimesover.FutureIRPreportswillexplorewaterdecouplingissuesingreaterdepth.

Withland,thestatisticalsituationismuchbetter,atleastasfarascroplandisconcerned.Themainfocusofaccountingforlandresourcesisputonlandcover(suchascropland,grasslandorforest)anditschangeovertime(Erbetal.,2007).However,thecouplingofeconomicactivityandlanduseisreflectednotonlyinlandcoverchange,butalsointheintensityofuse.Anincreaseinyieldsormulti-croppingonexistingarableland,oranincreaseinlivestockgrazingongrassland,doesnotnecessarilyleadtochangeinlandcovertypes,butneverthelessrepresentsanincreaseduseoflandresources.Forthisreason,existinglandusestatisticsarenoteasilyappliedtoananalysisofdecoupling.

© L

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As a result of these data constraints on water and land, the assessment of resource decoupling in this report will focus mainly on the use of materials as accountedforbyMFA.

Indicatorsforundesirableenvironmental impactsofeconomicactivitiesandresourceusegloballyandinlongtimeseriesdonotexistonanaggregatelevel.Inrecentdecades,abroadliteratureonenvironmentalimpactsandimpactassessmenthasevolved.Environmentalimpactsareusuallydescribedasimpactsonenvironmentalmediaandonhumanhealth.Anassessmentofenvironmentalimpactsismainlyoperationalizedontheproductlevelinlifecycleassessments(LCA)andadefinitionisfoundinISO14.040standardswherethefollowingsevenimpactcategoriesaredifferentiated(Nielsenetal.,2005):acidification;climatechangeandglobalwarming;ecotoxicity;humantoxicity;eutrophication/nutrientenrichment;photochemicalozoneformation(summersmog);andstratosphericozonedepletion.Thislistconsidersnegativeenvironmentalimpactsthat“areknown,wellexploredandoperationalized,andforwhichstatisticalinformationisavailable”(Molletal.,2004,p.4).Thisliteraturedidnot,however,convergeinasharedunderstandingofwhatenvironmentalimpactsactuallyareandhowtheyshouldbeconceivedandclassified(seetheeffortinUNEP,2010b).Onthemostgenerallevel,negative environmental impacts can be considered as undesirable changes in the natural environment (or one of its compartments) that can be causally linked to some socio-economic activity.

The‘undesirability’ofanenvironmentalimpactofasocio-economicactivityalwaysneedstobelegitimized,asthesocio-economicactivityassuchusuallypursuesdesiredgoalsandenvironmentalimpactsoccurastrade-offs,orunintendedside-effects,inreachingthesegoals.Thislegitimacycanbemosteasilyestablished

forcaseshavingtwoormorefunctionalequivalentsforpursuingthegoal(products,productionprocesses,materials,etc.)thatcanbecomparedintermsoftheirenvironmentaltrade-offs.Itisnowbroadlyacceptedthatthechoicebetweenalternativesshouldtakeintoaccountpotentialnegativesideeffects.Classicalexamplesofthiskindarethechoicebetweenplasticorpaperbags,andbetweenchlorideandozonebleachinginpaperproduction.Iftheoutcomesofimpactassessmentsarecontested,theycanbedebatedimpactbyimpactonthislevelofcomplexity.

Onhigherlevelsofaggregation,overallimpactassessmentsbecomeincreasinglyindeterminate.Amongthedifficultiesencounteredareproblemsof:

• impactselection:whichenvironmentalconcernsneedtobeaccountedfor,onwhichspatialandtemporallevel,onwhichlevelofcausalproximity(e.g.habitatlossorthreattobiodiversity)

• impactweightingandcomposingaggregates

• systemcompleteness(potentialomissions)anddoublecounting.

Eventhefewhigh-qualitystudiesthathavemadeseriousattemptsatcomprehensivesolutions(suchasvanderVoetetal.,2005;EEA,2005)werenotabletoestablishsolidconventionsforthefield.AnassessmentbaseduponthisresearchstrandwasprovidedinoneofthepreviousIRPreports(UNEP,2010b).

CO2emissions(and,toacertainextent,greenhousegas(GHG)emissions)aretheonlywelldocumentedenvironmentalimpactindicatoravailableatthegloballevel.Havingthesedataavailableinlongertimeseriesandonacountry-by-countrybasismakesitpossibletoanalysethecouplingbetweenpopulationdynamics,economicactivityandthecarbon/temperaturematrix.

2. Global long-term trends in the use of natural resources and in undesirable environmental impacts

9

2.2 The global dynamics of material resource use

The global use of natural material resources corresponds to the sum total of raw materials extracted. 4 At the beginning of the 21st century, estimates for the quantity of global raw materials extraction ranged between 47 and 59 billion metric tons (47–59Gt) per year (Fischer-Kowalski et al., 2011). At the global level, the amount of raw materials extracted is roughly equivalent to the global amount of raw materials then used in economic processes. On the level of individual countries, the materials they extract in their domestic territory (termed DE, domestic extraction) is not equivalent to their materials use, as they may export or import products for use.

Figure 2.1 shows global material extraction for the period 1900 to 2005 in a breakdown by the four major material classes: biomass, fossil energy carriers, ores and industrial minerals, and construction minerals. Total material extraction increased over that period by a factor of 8. The strongest increase can be observed for construction minerals, which grew by a factor 34, ores and industrial minerals by a factor of 27, and fossil energy carriers by a factor of 12. Biomass extraction increased only 3.6-fold. This comparatively low increase of biomass extraction, while the world population needing food had quadrupled, is mainly due to a substitution of biomass use for combustion by fossil fuels. For much of the 20th century, biomass had dominated among the four material types: in 1900, biomass accounted for almost three quarters of total material use. One century later, its share had declined to only one third. Thus on top of using more biotic renewable resources, the global socio-economic metabolism has

4 Systemboundariesofextractedmaterialscanbedefinedinvariousways.Whatisreportedhereisthefractionofextractedmaterialsactuallyusedafterwardsintheeconomicprocess,so,forexample,nooverburdeninminingorharvestresidues.Variationsinstoragearenotconsidered.

increasingly turned towards mineral resources.5

A major driver of the overall increase in raw material extraction and use is population numbers (Steinberger et al., 2010; Krausmann et al., 2008). The world’s, and each country’s, material use (called domestic material consumption, DMC) is tightly coupled to the number of inhabitants. This is plainly evident for food, for example, but it also holds true for other material resources that have become part of a certain material standard of life. Thus it is common to calculate metabolic rates, that is resource use per capita, as a fairly robust overall measure of material standard of living (see for example Krausmann et al., 2008; Behrens et al., 2007; Haberl et al., 2009). From another perspective, metabolic rates can be seen as the ‘material footprint’ of an individual person living by a certain country’s average level of consumption. These metabolic rates are by more than one order of magnitude different for different countries. For example, one person more in India means on average an additional 4 tons of resource use, while one person more in Canada means on average 25 tons more resource use per year.

While global resource use has increased eightfold during the course of the 20th century (Figure 2.1), average resource use per capita merely doubled (Figure 2.2). A global inhabitant in 2005 required somewhere between 8.5 (Behrens et al., 2007) and 9.2 tons (Krausmann et al., 2009) of resources annually, while a hundred years earlier the average global metabolic rate was 4.6 tons.

5 Theissueofrenewabilityofresourcesthathadplayedsuchaprominentroleintheenvironmentalandsustainabilitydebate(seeforexampleDaly,1977)istodaydifficulttoevaluate.Ontheonehand,theuseofrenewablebioticresources,evenifitisnotplainlyanoverusebeyondtheregenerationcapacitiesoftheresource,isconsideredtocausesomeofthemostsevereenvironmentalimpacts(vanderVoetet al.,2005).Ontheotherhand,forexamplewithmineralsusedforconstruction,thedistinctionbetweenrenewableandnon-renewableisnotsoeasy.Mostofthesemineralsareabundantintheearthcrust,butnotnecessarilyclosetothosepopulationcenterswheretheyareneeded.


10

Averageglobalmetabolicrateshavesometimesstagnated(suchastheperiodfrom1900totheendofWorldWarII),andsometimesgrownrapidly(suchastheperiodfromtheendofWWIIuptotheglobaloilcrisisintheearly1970s).6Fromthisfirstoilshockin1973untiltheturnofthecentury,theglobalaveragehasagainremainedstable(seeFigure2.2)andhascontinuedtodosointheindustrializedcountriesuptonow(Figure2.3).Globally,though,inrecentyearsthemetabolicratesstartedtoriseagain,duetoalargeextenttothegrowthoflargeemergingeconomiessuchasBrazil,ChinaandIndia.ThismarksanewphaseofinternationalconvergenceinmetabolicpatternsinwhichanumberofdevelopingcountrieshaveadoptedgrowthstrategiesthatmakeitpossibleforarapidlyexpandingmiddleclasstoachievehighconsumptionlevelsthataresimilartothoseOECDcountriesachievedduringthedecadesafterWWII.

6 This phase is known as the “Fifties Syndrome” (Pfister, 1996), but might also be addressed as the US-American New Deal spreading across the world, in combination with decolonization and the “green revolution” .

Thephasesofmetabolicpatternsarenotreflectedeconomicallyintermsofaverageincome(seeFigure2.2andFigure2.3),whichshowedamoreorlesscontinuousexponentialgrowth(withminordownturnsduringthefirstworldeconomiccrisisinthe1930sandWorldWarII).Thesefindingswarrantfurtherinvestigation,astheyindicatesomedecouplingofeconomicdevelopmentandresourceuse.

Thesedataindicatethatglobalmaterialresourceuseduringthe20thcenturyroseatabouttwicetherateofpopulation,butatasubstantiallylowerpacethantheworldeconomy.Thusresource decoupling has taken place ‘spontaneously’ rather than as a result of policy intention.Thisoccurredwhileresourcepricesweredeclining,oratleaststagnating.Furtherresearchisneededonthisrelationshipbetween‘spontaneous’relativedecouplinganddecliningresourceprices.

Figure 2.1. Global material extraction in billion tons, 1900–2005

Source: Krausmann et al., 2009

Material extraction Billion tons

100

80

60

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01900 20001910 1920 1930 1940 1950 1960 1970 1980 1990

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GDPtrillion (1012) international dollars


11

Figure 2.2. Global metabolic rates 1900–2005, and income

Source: Krausmann et al., 2009; based on SEC Database "Growth in global materials use, GDP and population during the 20th century", Version 1.0 (June 2009): http://uni-klu.ac.at/socec/inhalt/3133.htm)

Metabolic rate t/cap/yr

Income International dollars cap/yr

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1900 20001910 1920 1930 1940 1950 1960 1970 1980 1990

● Ores and industrial minerals● Fossil energy carriers● Construction minerals● Biomass● Income

1,000

0

2

0

Figure 2.3. Gross Domestic Production and Domestic Material Consumption in OECD countries, 1980–2000

Source: OECD, 2008b. Data update provided by OECD on 1 April 2011, http://www.oecd.org/dataoecd/55/12/40464014.pdf

Indexed 1980=100

● GDP● Material productivity (GDP/DMC)● Material consumption (DMC)

1980 1990 2000 2010

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Food and other crops

1980 1990 2000 2010

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AccordingtoWagner(seeFigure2.4),resource prices declined by about 30% in the course of the 20th century. Afterthefirstoilcrisis,thepricelevelincreasedtoafirstcentennialclimax,onlytoreturntoitstrendofdeclineafterlessthanadecade.

Asimilarphenomenonmaynowbehappeninginconjunctionwiththepresenteconomiccrisis(seeFigure2.5).Asteepriseinrawmaterialpricesreacheditspeakin2007,andareturntousualpricelevelsmayhavestartedalreadyin2008.Forthe

Figure 2.4. Composite resource price index (at constant prices, 1900–2000)

Source: Wagner et al., 2002

Indexed 2000=100

200

180

160

140

120

801910 20001920 1930 1940 1950 1960 1970 1980 1990

100

Figure 2.5. Commodity price indices

Source: World Bank Commodity Price Data (Pink Sheet), historical price data, available from http://blogs.worldbank.org/prospects/global-commodity-watch-march-2011

Price index (real year 2000 US$)2000=100

● Food● Raw materials● Energy● Metals and minerals (including iron ore)

1960 1970 1980 1990 2000 2010

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01960 20101970 1980 1990

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13

timebeing,though,itishardtotellwhethersuchareturntopricelevels‘asusual’withafurthertendencyofdeclinewillactuallytakeplace.Itcouldjustaswellbethatsymptomsofincreasingscarcityinconjunctionwithsteeplyrisingdemandwillleadtofinancialspeculationsthatkeeprawmaterialpricesathigherlevelsthanbefore,andevenenforceareversalofthelong-termtrendofdecline(seeforexampleAIECE,2009).

Nevertheless,eveninacontextofdecliningrawmaterialprices,thegrowth

ratesofglobalrawmaterialextractionthroughoutthe20thcenturyremainedbelowthegrowthratesofeconomicactivityasmeasuredbyGDP(seeFigure2.1).Whilematerialresourceuseincreasedbyafactorof8,worldGDPincreasedbyafactorof23(OECD,2008).Thismeansthateven under the unfavourable conditions of price decline, a certain amount of resource decoupling is evident, or put differently, a certain level of ‘dematerialization’ of the world economy has spontaneously occurred, effectively raising resource productivity

Figure 2.6. The global interrelation between resource use and income (175 countries in the year 2000)

Algeria

Angola Burundi

Cameroon Cape Verde

Central African Republic Chad

Comoros

Congo

Côte d'Ivoire

DR Congo

Egypt

Equatorial Guinea

Eritrea Ethiopia Gabon

Gambia

Ghana

Guinea

Guinea-Bissau

Kenya

Lesotho

Liberia

Libya

Malawi

Mali

Mauritania

Mauritius

Morocco

Namibia

Niger

Rwanda

Senegal

Sierra Leone

Somalia

South Africa

Sudan

Swaziland

Togo

Zimbabwe

Afghanistan

Australia

Bangladesh

Brunei Darussalam

Cambodia

China

French Polynesia

India

Indonesia

Japan

Kazakhstan

Malaysia

Mongolia

Myanmar Nepal

New Caledonia

New Zealand

Papua New Guinea

Philippines Samoa

Sri Lanka

Tajikistan

Thailand

Timor-Leste

Turkmenistan

Uzbekistan

Albania

Armenia

Belarus

Belgium

Croatia

Cyprus

Denmark

Estonia Finland

France

Georgia

Germany

Greece

Hungary

Iceland

Ireland

Israel

Italy

Latvia Lithuania

Malta

Norway

Poland

Portugal

Russia

Serbia

Slovenia

Spain

Sweden

Switzerland Turkey

Ukraine

Great Britain

Argentina

Bahamas

Bolivia Brazil

Chile

Cuba

Dominican Republic

El Salvador

Guyana

Haiti

Honduras

Mexico

Nicaragua

Panama

Paraguay

Peru

Puerto Rico

Suriname

Uruguay

Canada USA

Iraq

Kuwait

Lebanon Oman

Qatar

Saudi Arabia

United Arab Emirates

Yemen

1

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GDP per capitaConstant year 2000 US$

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● Africa● Asia and Pacific● Europe● Latin America and Caribbean● North America● West Asia


14

(added value/resource use) by about 1–2% annually at the global level(Krausmannetal.,2009).Thisdecouplinghasbeenparticularlymarkedamongtheindustrialcountries.SimilarfindingshavealsobeenpresentedbyBringezuetal.(2004).

Statistically,therelationbetweeneconomicactivity(measuredintermsofGDP)andresourceuseisrobust,ashasbeenshownbyananalysisbySteinbergeretal.(2010)of175countriesfortheyear2000(seeFigure2.6).However,whilegloballytheloglinearcorrelationwasR2=0.60(weightedbycountrysize),thescatterplotdemonstratesalargenumberofoutliers.Redraftingonlinearscalesshowsthatthe

steepnessofthefunctionismuchhigherinlow-incomeranges,declineswithlevelofincome,andnosaturationisevident.

Thissuggeststhatit is possible for some countries to achieve relatively high incomes per capita while consuming fewer resources per capita, while other countries display very high resource consumption levels per capita without a corresponding rise in incomes per capita. Thisisrelatedtofactorslikepopulationdensity(seebelow),butitisalsostronglyrelatedtotrade.Countriesmayshifttheirdomesticeconomytowardsservices,reducingtheirprimaryandsecondarysectors,andincreasingtheirdependenceonimportedmanufacturedgoods.Thisleadstoaloweringofdomestic

Source: Steinberger et al., 2010

Botswana

Comoros Congo

Equatorial Guinea

Gabon

LibyaMauritius

South Africa

Swaziland

Australia

Brunei Darussalam

French Polynesia

Japan

Kazakhstan Malaysia

Mongolia

New Caledonia

New Zealand

Papua New Guinea

Republic of Korea

Samoa

Austria

Belgium

Bulgaria

Croatia

Cyprus

Czech Republic Denmark

Estonia Finland

France Germany

Greece

Hungary

Iceland

Ireland

Israel

Italy

Lithuania

Malta

Netherlands Norway

Poland

Portugal

RussiaSlovakia

Slovenia

Spain

Sweden

Switzerland

Turkey Great Britain

Argentina

Bahamas

Belize

Bolivia Brazil

Chile

Guatemala

Guyana

Mexico Panama

Paraguay

Peru

Puerto Rico

Suriname

Trinidad and Tobago

Uruguay

Venezuela

Canada

USA

Bahrain

Kuwait

Lebanon Oman

Qatar

Saudi Arabia

United Arab Emirates

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0 35,000 40,00030,00025,00020,00015,00010,0005,000

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resourceuse(measuredintons)whileincomepercapitarises,andtoa shifting of the material and environmental burden into developing countries. Othercountriesmayspecializeasrawmaterialproducers(e.g.manyAfricancountries)ormanufacturers(e.g.manyAsiancountries),withahighdomesticmaterialresourceuseandenvironmentalburdenasaconsequence,withoutsignificantcorrespondingincreasesinincomepercapita.TheseissueshavebecomeastrongfocusofresearchthatwillbeassessedinChapter4.

Clearlythe global average metabolic rate rests upon highly unequal metabolic rates across countries, varying by a factor 10ormore(Fischer-KowalskiandHaberl,2007).Accordingtoarecentanalysis(Krausmannetal.,2008),twokeyfactorsaccountformuchofthisvariation:development status(developingoremergentvs.fullyindustrializedcountrieswithconcomitantincome)andpopulation density.7Eachofthesefactors,lookeduponindependently,seemstoberesponsibleforroughlyadoublingofthemetabolicrate.Fortheindustrialcountries,thosewithhighpopulationdensity(amongthemmanyEuropeancountriesandJapan)haveanaveragemetabolicrateofabout13tons/capita,whilethosewithlowpopulationdensity(forexampleFinland,theUSAandAustralia)haveametabolicratetwiceashighandmore,althoughincomeandmaterialcomfortdonotsubstantiallydiffer.Thesamevariationcanbeobservedamongtherapidlyindustrializingcountries:whileamongthemthehigh-densitydevelopingcountries(suchasChinaandIndia)showedaveragemetabolicratesof5tons/capitaintheyear2000,themetabolicratesincomparablelow-densitydevelopingcountries(e.g.BrazilandSouthAfrica)weremorethantwiceashigh.It appears that densely populated areas and regions,

7 A similar typological effort was undertaken by Romero-Lankao et al. (2008) to explain carbon emissions, putting the ecological modernization theory to a test. She developed a typology combining income, urbanization and stage in the demographic transition to explore trends of global convergence of carbon emissions.

for the same standard of living and material comfort, need fewer resources per capita.Thisstillneedstobecorroboratedbyresearch,foreachofthelargercomponentsofmaterialflows.Theapparentdifferenceintheuseofbiomass(seeFigure2.7)maybepartiallyduetothefactthatfoodandfeedstockisproducedinlesspopulatedareas,andonlythelower-weightrefinedproducesuchasmeat,milkorcheeseisexportedtodenselypopulatedregions.Butregionswithatraditionallyhighpopulationdensityoftentendtowardsadietlessdependentonmeatanddairy,andlivestockthatcauseslargematerialflowstendstobekeptandusedinlow-densityregions.Denselypopulatedareasalsohavelessneedfortransportfuels(ashasoftenbeendemonstratedforcities,seeNewmanandKenworthy,2007),andthesupplyofheatforhousingcanbeprovidedmoreefficiently.Industrialfacilitiesrequiringparticularlyhighmaterialflows(suchasmines),ontheotherhand,tendtobelocatedinsparselypopulatedareas.8Finally,thepercapitauseofconstructionmineralsfollowsasimilarpattern:understandably,peopleinurbanareassavespaceandthereforeconstructionmaterialanduseinfrastructuremorefrequentlyandthusmoreefficiently.

Thedecreaseinneedformaterialswithrisingpopulationdensityisessentiallygoodnewsinaworldofrapidurbanization.Thedoublingofpercapitamaterialuseduetoresourceandenergyintensivemodesofindustrialization,whichcanbeseeninFigure2.7,isamajorchallengeforthosehigh-densitycountriesthemselvesifthe‘materialfootprint’ofeachoftheirinhabitantsdoubles.Itisalsoachallengefortherestoftheworldintermsofresourcedepletionandenvironmentalimpact,especiallyifthisconventionalindustrializationmodeiscoupledtogrowthstrategiesindevelopedeconomiesthataredrivenbyever-risingconsumerdemandandglobalizedcapital

8 Why the per capita use of ores tends to be higher in low density areas needs further research.


16

investmentflows.It is necessary, therefore, to relate strategies dealing with resource use to developmental strategies. Whileitseemsfullyjustifiedtodiscussresourceusereductionsforindustrializedcountries,thisisnotapplicablefordevelopingcountries.Lowmetabolicratesindevelopingcountriesoftenreflectalackofsatisfactionofbasicneedsandalowstandardofmaterialcomfort,andsocialjusticecallsforenvironmentalandeconomicspacetoeradicatepovertythroughinvestmentinthenecessarymaterialinfrastructures.

However,thekeyquestionishowthesecountriesgoaboutthis.Iftheyemulatethetechnologiesandindustrialprocessesofthedevelopedeconomies,theireffortswillbeundercutbytheconsequencesofresourcedepletionandenvironmentalimpacts.Theiroptimalstrategy,therefore,istoexploitthisspacewhilesimultaneouslypursuingalessresource

andenergyintensivegrowthanddevelopmentpathway.Decoupling (resource and impact) as discussed in this report can help describe what such a less resource- and energy-intensive pathway could look like and how it can be achieved.

2.2.1 ConclusionAnnualglobalresourceextractionanduseincreasedfromabout7billiontons(7Gt)in1900toabout55billiontons(55Gt)in2000,withthemainshiftbeingfromrenewablebioticresourcestonon-renewablemineralones.Evenintheexistingeconomicenvironmentofcontinuouslydecliningresourceprices,somedecouplingofresourceusefromeconomicactivityhastakenplace:theworldeconomyhasbeendematerializing.Themostinelasticrelationshipexistsbetweenresourceuseandpopulationnumbers.The‘metabolicrate’,theannualresourceusepercapita,representsthematerialstandardoflivinginacountry,andifpopulationrisesor

Figure 2.7. Average metabolic rates (resource use in tons/capita) by development status and population density

High-density means a population density of 50 people/km2 or higher. Share in world population: 13% industrial, high density, 6% industrial, low density, 62% rest of the world, high density, 6% rest of the world, low density. Source: Krausmann et al., 2008

Metabolic rate t/cap/yr

20

0

15

● Ores and industrial minerals● Fossil energy carriers● Construction minerals● Biomass

5

10

Industrial(low density)

Industrial(high density)

Rest of the world(low density)

Rest of the world(high density)


17

declines,soproportionallydoesresourceuse.Theglobalaveragemetabolicratehasdoubledfrom4.6tons/capitain1900to8–9tons/capitaatthebeginningofthe21stcentury.Themetabolicratestronglydependsonthedevelopmentstatusofacountry(doublingortriplinginthecourseoftheindustrialtransformation),onincomeandonpopulationdensity:regionswithhighpopulationdensitydisplaysubstantiallylowermetabolicratesforthesamestandardofliving.Theseinsightscanbeusedforprojectingfutureresourceuseandformodellingresourcedepletion,developmentstrategiesandresourcedecoupling.Animportantfindingisthatmetabolicrates9 havestabilized10inhighlyindustrializedcountriesinthepastthreedecades,irrespectiveoffurtherrisingincomes,whilethemetabolicratesinmanypartsoftherestoftheworldkeeprising.

2.3 Assessing the dynamics of global environmental impacts

Thekeyquestionsofthisreportarewhetheradecouplingofenvironmentalimpactsfromresourceuseandeconomicgrowthistakingplace,andwhatarethechallengesfacingthefurthersupportingandenforcingofdecouplingbypolicymeasures.Resourceusehasbeenshowntohavenumerousindicators–notfullycomprehensivebutstatisticallyrobust–thatenabletheassessmentandmonitoringofthedegreeofdecouplingofresourceusefrompopulationdynamicsandeconomicgrowth,bothgloballyaswellasatthelevelofindividualcountries.Forassessingthedecouplingof(undesirable)environmentalimpactsfrompopulationandeconomicdynamics,nosuchaggregatecomprehensiveindicatorsexist.

However,substantialhistoricalevidenceindicatesthatthesame level of economic

9 Including traded products, but not the upstream material requirements of traded products.

10 A similar phenomenon can be observed for total primary energy consumption (TPES).

activities can be associated with a higher or a lower level of environmental impacts. Mostenvironmentalpoliciesinthepastdecadeshavebeendirectedatspecificimpacts,suchasputtingahalttodeforestation,keepingthestratosphericozonelayerintact,reducingcarcinogenicorothertoxicsubstancesinthehumanfoodchain,preventingeutrophicationofwaterbodies,orreducingair-pollutingemissionsdetrimentaltohumanhealth.Inrelationtoeconomicactivities,theytendedtoimposeadditionalcosts(oftenaddressedas‘internalizingexternalities’)andmetwithvariablelevelsofsuccess.

2.3.1 Strategies to reduce impactsInrelationtoresourceuse,undesirableenvironmentalimpactscanbereducedbybasicallytwostrategies: (a) changing the mix of resources used through substitution of more harmful by less harmful resources, and (b) using resources in a more environmentally benign way throughout the life cycle.

Strategy(a)iscertainlyeffectivebutalsohasitslimits.Aninformativeexampleisthesubstitutionofcoalforcombustionbypetroleumornaturalgas;thelatterhavealoweramountofcarbonemissionsperunitofmassandperunitofenergydelivered.Themorerecentexampleofsubstitutingbiofuelsforfossilfuelsneedscarefulassessmentonacase-by-casebasis,asarecentIRPreport(UNEP,2009)hasdemonstrated.TheIRPreportsonmetalsdemonstratethatakeytrendisusingincreasingamountsofevermoresubstancesasresources,acrossallnaturallyoccurringmineralelements.Thisexpansionputslimitsto(presentorfuture)substitution.Further,thepurposesforwhichmaterialresourcescanbeuseddonotallowforanindefiniterangeofsubstitutions:energyresources,freshwaterandlandarerequiredforpracticallyalleconomicactivities,thoughindifferentqualitiesandquantities.Thesubstitutabilityofmaterialsislimitedbytheirphysicalandchemicalproperties.Ofcourse,ithasbeen


18

Source: Adapted from Wilkinson et al., 2007

Figure 2.8. Environmental risk transition framework

● Household (e.g. dirty water)● Community (e.g. urban pollution)● Global (e.g. greenhouse-gas emissions)

Seve

rity

Increasing wealth

Local Global Immediate Delayed

Shifting environmental burdens:

veryimportantintermsofenvironmentalimpactstoreducetheamountofSO2orleadintransportfuels,therebyreducingtheoverallenvironmentalimpactsoffueluseintransportation.11Butbeyondacertainpoint,itiscrucialtouselesstransportfuels,i.e.lessresources.Thesameappliestomanyothereconomicactivities.

Strategy(b),usingresourcesenvironmentallymorecarefullyorsmartlythroughouttheirlifecycle,isdoubtlessakeystrategyforenvironmentalpolicies.Forexample,usingconstructionmineralsforthermalinsulationandrefurbishmentofhousesprobablyhasanoverallpositiveenvironmentalimpact,whileusingthemforanextensionoftheroadnetworkprobablydoesnot,moreorlessindependentlyoftheamountsused.Someenvironmentalimpacts,suchastheenergyandassociated

11 For a further step in reducing the environmental impact of transport fuels, namely reducing the emission of NOx by the use of catalysers, an important additional scarce resource, platinum, was required.

carbonemissionsrequiredforthetransportationoftheconstructionminerals,probablyremaininbothcasesafunctionofamountsofresourceuse.

2.3.2 The Environmental Kuznets Curve

Workingatagloballevel,Wilkinsonetal.(2007)revivedahypothesisthathadalreadybeenexpressedbyHoldrenetal.(2000)inUNDP’sworldenergyassessment(seeFigure2.8).Thishypothesisclaimsinterdependencebetweenthescalelevelofenvironmentalimpactanditsrelationtoeconomicactivityandincreasingwealth.Itassumesthathousehold-levelenvironmentalburdens(suchasdirtywaterorindoorpollution)declinewithariseinwealthandcommunity-levelburdens(suchasurbanairpollution)displayahump-shaped,typicalenvironmentalKuznetsfunction,whileglobalenvironmentalburdens(suchasgreenhousegasemissions)rise.


19

Itassumesthatovertime,globalimpactsontheenvironmentarebecomingmoreimportantthanlocalones,anddelayedimpactsarebecomingmoreimportantthanimmediateones(seegreenarrowsatthebottomofFigure2.8).Acrossthosescalelevels,impactdecouplingisnoteasytoassess.

2.3.3 Empirical studies of impacts Onthegloballevel,theonlywell-researchedandquantifiedcouplingbetweeneconomicactivity(and/orresourceuse)andenvironmentalimpactistheonebetweentheuseoffossilfuelsandCO2emissionsandgreenhousegas(GHG)emissions.Onthecentennialtimescale(1900–2000),worldGDPhadbeenrisingbyafactorofabout22(seeFigure2.1,dependingonGDPindicators),fossilfuelusebyroughlyafactorof14,andglobalCO2emissionshadbeenrisingbyafactorof13(Smil,2008,p.328).TherelationbetweenworldGDPandworldCO2emissionsacrossthistimespancanbeverywellrepresentedbyaloglinearfunction.12ThegrowthratesofCO2emissions(theenvironmentalimpactofconcern)aresmallerthantherespectivegrowthratesofGDP,soarelativedecouplinghasoccurred.However,thedegreeofimpactdecouplingacrossthislongertimeperiodhasbeenpracticallythesameasforresourcedecoupling.Inrecentyears,theincreasinguseofcoalagainraisedthelevelofCO2emissionsperunitoffossilfueluse,thoughfutureCCS(carboncaptureandstorage)mayreducenetCO2emissions(IPCC,2007).

Anotherilluminatingcaseistherelationbetweenbiomassuseanditsimpactontheglobalcyclesofsulphur,nitrogenandphosphorus.Whiletheseimpactsareconsideredsubstantial,withhuman-inducedflowsbeingofthesameorderofmagnitudeasnaturalflows(Ayres,1994;

12 After many efforts to the contrary, it may be concluded that fossil fuel use and CO2 emissions do not follow an Environmental Kuznets Curve, that is they do not rise during earlier stages of development or at low income while declining at later stages of development or at higher incomes (Stern, 2004; Luzzati and Orsini, 2009).

Smil,2002;Tilman,1999),notimeseriesdataexistthatallowjudginghowcloselytheseflowsarerelatedtochangesinglobalGDPorglobalbiomassextraction.Figure2.9showsthatcerealproductiongrowthsince1960hasbeendecoupledslightlyfromlandarea,butcoupledtoincreasingamountsoffertilizeruse.

Verymuchthesamemaybesaidaboutoneoftheenvironmentalimpactsofhumanresourceusethatisconsideredmostimportant:biodiversityloss,duelargelytobiomassextractionandlanduse.Althoughlong-termdatadocumentingbiodiversitylossonagloballevelaresparse,theavailabledataindicateaglobaldeclineofbiodiversityinmarine(seeSalaandKnowlton,2006),freshwater(seeDudgeonetal.,2006)andterrestrial(e.g.Sandersonetal.,2006)ecosystems.Whetherthisdeclineissteeperthantheriseinresourceuse,orevensteeperthangrowthinGDP,cannotyetbequantified.Thus,anydecouplingoftheseenvironmentalimpactsfromeconomicactivitycannotbedocumented.

Theenvironmentalimpactsassociatedwiththeextractionanduseoffossilfuelsareanotherveryimportantissue.13Inthepastdecades,theuseofcoalandoilshiftedtowardsnaturalgasthatwasenvironmentallyrelativelybeneficial;itreducedthespecificCO2emissionspertonoffossilfuelused,butitalsoincreasedtheratethatnaturalgasresourcesweredepleted.Now,theuseofcoalisontheriseagain(IEA,2008),whichhasanimpactintheoppositedirection.

Estimatesofremainingrecoverableoilresourcesvarygreatly(anddependtoanextentonshiftingeconomicandtechnologicalconditions),butareultimatelylessimportantthanannualflowratesofoilproduction.Hubbert(1956)presentedamodelwhereinoilproductioninanygivenregionfollowsaroughly

13 This section on oil resources was prepared by Jeremy Wakeford of the Sustainability Institute, Stellenbosch University, South Africa.


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bell-shapedcurve,reachinga‘peak’ratewhenapproximatelyhalfoftheultimatelyrecoverableresourcehasbeenconsumed.Oilproductionhasalreadypeakedanddeclinedinthemajorityofindividualoilproducingnations,andinlargeregionssuchasNorthAmericaandEurope(Hirsch,2008).Thus‘peakoil’isanempiricallyverifiablephenomenon(Sorreletal.,2009,p.vii).Evidencesuggeststhattheworldisrapidlyapproachingaworldoilproductionpeak.Globalnewoildiscoveriesreachedtheirheightinthe1960sandhavebeenonadecliningtrendeversince(seeFigure2.10),despiteremarkableimprovementsinexploration,drillingandextractiontechnologies,andepisodesofhighpricesinthe1970sand2000s(ASPO,2009).

Acomprehensivereviewofrecentoilproductioncapacityforecastsbyacademics,industryexpertsandinternationalagencies(Sorreletal.,2009,p.ix)concludedthat“a

peakofconventionaloilproductionbefore2030appearslikelyandthereisasignificantriskofapeakbefore2020”.Althoughunconventionaloilreserves(e.g.oilsandsandextra-heavyoil)arelarge,theirflowratesareseverelyconstrainedbyhighenergyandeconomiccostsaswellasenvironmentalfactors(Aleklettetal.,2009).Anadditionalconcernisthatitisrequiringincreasingamountsofenergytofind,extract,refineanddeliveroiltomarkets(Gagnonetal.,2009).Theeasiertoaccessoildeposits,typicallydiscovereddecadesago,arebeingrapidlydepletedandthefrontierfornewoilhasmovedintoareasthatareeconomicallymorecostlyandtechnicallymoredifficulttoaccess(suchasdeepoff-shorewellsandpolarregions).Thusthe‘netenergy’derivedfromoil–i.e.theenergyoutputminustheenergyinputs–issettodeclinefasterthanthe‘grossenergy’;thiswillinturnfurtherraisethemonetaryandpossiblyalsotheenvironmentalcostsofoil.Ineffect,aslong

Figure 2.9. Global growth of cereals production and fertilizer consumption

Note: Global growth in the production of cereals since 1961 almost exclusively depended on intensification (nitrogen input, tractors, yields and many other factors not shown on this graph), whereas the expansion of harvested area played an insignificant role.Source: UNEP GEO Portal, as compiled from FAOSTAT database, Food and Agriculture Organization of the United Nations (FAO), http://geodata.grid.unep.ch

Indexed 1961=100

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● Nitrogenous fertilizer consumption● Cereals production● Cereals, area harvested


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ascarboncaptureandstorage(CCS)technologiesarenotproventobefullyoperationalandprovidesubstantialreliefonemissions,itcannotbeexpectedthattheoverallenvironmentalimpactsoffossilfuelusewilldecouplefromtheamountsused.Perhapseventheoppositewillbethecase.

Industrialmineralsandoresareaveryheterogeneousclassofresources,dominatedquantitativelybyferrousmetalsandmineralfertilizers.Theseresourcesareusedinhighlydiverseprocesses,soitisimpossibleonthislevelofgeneralitytoassesspotentialenvironmentalimpacts(seealsoIRPmetalsreports).Themostaccessibleissuesareconnectedtotheextractionphaseinthelifecycleofthoseresources.

WhileissuesofuseandrecyclingaresubjecttootherIRPreportsonmetals(UNEP,2011),heresomeissuesconcerningapotentialdecouplingofimpactsfortheextractionphaseinthelifecycleofthoseresourcesarediscussed.Thelocationofresourceextractionisrelevant

fromanenvironmentalimpactpointofviewundertheassumptionthatenvironmentalregulationstandardsdifferacrosstheworld.Mostlikely,thosestandardsaretightestinwealthyindustrialcountries,andlesstightinpoorer,developingcountries.AccordingtoSERI’sMosusdatabase,extractionofindustrialoresandmineralshasnotonlydoubledinthelast25years,ithasalsoshiftedfromindustrialtowardsdevelopingandnewlyindustrializingcountries(NIC)(seeFigure2.11);in2006,morethanhalfofallmineralsandoreswereextractedoutsideofindustrialcountries.

Thisfindinghasimplicationsforenvironmentalimpactsassociatedwithextractionactivities.Iflegalstandardsonaveragearelikelytobecomeweaker,environmentalimpactsperunitofextractedmaterialmightbecomemoresevere.Anequallyindirectindicationmaybederivedfromworldwidedecliningoregrades.

Figures2.12,2.13and2.14displaythedeclineoforegradesforseveralkey

Figure 2.10. World conventional oil discoveries and production

Pre-1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

Source: ASPO, 2009

Gigabarrels/annum

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Figure 2.12. Ore grades of mines in Australia, 1840–2005

Source: Mudd, 2009

1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Ore grades

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0

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Figure 2.11. Global extraction of industrial minerals and ores 1980 and 2006, by type of country

Source: SERI, Mosus data base, own calculation, http://seri.at/projects/completed-projects/mosus

Percentage (%)

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Figure 2.13. Ore grades of gold mines, 1830–2010

Source: Giurco et al., 2010

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1857: 50.051858: 41.23

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Figure 2.14. Ore grades of nickel and copper mines, 1885–2010

Source: Giurco et al., 2010

1885 1900 1915 1930 1945 1960 1975 1990 2005

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● Australia (%Cu)● Australia (%Ni)● Canada (%Cu)● Canada (%Ni) ● USA (%Cu)

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metalsandcountriesthatbelongtotheworld’smajorprovidersofindustrialmineralsandores.Today,depending on the metal concerned, about three times as much material needs to be moved for the same ore extraction as a century ago,with concomitantincreasesinlanddisruption,groundwaterimplicationsandenergyuse.Therefore,eveniftoday’sextractionisdonemorecarefullythanacenturyago,andevenifthereleaseofaggressivechemicalshasdeclined,nodataareavailabletosuggestthatthegrowthratesofenvironmentalimpactswilllagbehindthegrowthratesoftheamountoforesextracted.

Most of the environmental impacts of extraction and use of construction minerals occur only at a regional level.Allextractionactivitiesofthesemineralsleadtothedisturbanceofland,airandwaterecosystems.Futhermore,energyuseforextractionandtransportneedstobeconsidered.14Similarly,alargepartoftheprocessinginvolvestheproductionofconcrete,15%ofwhichinvolvescementthatisamajorsourceofCO2emissions(1kgofcementgeneratesabout1kgofCO2emissions).Duetothenormallyhighwaste-to-productratios,extractiveoperationsoftengeneratelargevolumesofwaste;similarly,attheendofthelifecyclehighvolumesofwasterequiredisposal.Therefore,manyEuropeancountrieshaveintroducedminingchargesoraggregateleviestoreducethedemandforprimarymaterialsandencouragerecycling(EEA,2008,p.25).Asmostoftheenvironmentalimpactsoftheextractionofconstructionmineralsareadirectfunctionoftheirvolume,oneshouldexpecttheirdynamicstobefairlyproportionaltotheamountofresourceextractionanduse,perhapswiththeexceptionofconcrete:loweringtheproportionofconcrete,andimprovingthetechnologyofcementproduction,couldbeapathwaytofurtherdecouplingofenvironmentalimpactfromresourceuse.

14 In Germany, for example, 45% of the tonnage of freight vehicles is consumed by aggregates, see Bundesamt für Güterverkehr. 2006.

Different considerations apply to impacts in the use phase of construction minerals, with impacts depending on what is being built, where and how it is being built, and possibly relate only weakly to the amounts of resources used. Byusingadditionalmaterialtoprovidethermalinsulationtobuildings,forexample,CO2emissionsmaybereduced.

2.3.4 ConclusionTheenvironmentalimpactsassociatedwithresourceusearemultifold,varybetweentheresourcesunderconsideration,15andarenotdocumentedinaquantitativefashionthatrendersthemaccessibletoastatisticalassessmentortarget-settingfordecoupling.Itappearsthat short term and local environmental impacts of resource use across the life cycle have been and can be mitigated in a way that allows for impact decoupling beyond resource decoupling. With global and far-reaching environmental impacts, this is less likely to be the case. Whiletheextractionofdifferentclassesofresourcesmustbeassumedtohaveverydifferentenvironmentalimpacts,asubstitutionbetweenthemasastrategytoreduceimpactsisnoteasilyfeasible,becausetheyserveverydifferentfunctions.

Forfossilfuels,atleastintheextractionphase,environmentalimpactsappeartoberisingbothwiththerecentsharpincreaseincoalmining,andwiththeriseintheextractionofso-calledunconventionalfuels(whichincludeincreasingrisksposedbytheshiftofoilandgasproductionintosociallyandpoliticallyunstableenvironments).16Intheusephase(mainimpactconsidered:CO2emissions),mostresearchresultspointinthedirectionofaproportionalityofresourceusewithCO2emissions,whichmighttipinthedirectionofevenlessdecouplingwithincreasinguseofcoal.Inthefuture,itishopedthatcarboncaptureandstoragewillreversethistendency,butthisisfarfrom

15 See in more detail in the IRP report 2010 on environmental impacts.16 As well illustrated by the 2010 major accident in offshore drilling in

the Gulf of Mexico.


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certain.Forbiomassuse,someglobalevidenceindicatesimpactdecouplinginthesensethatwhilematerialflows(harvest)areincreasing,theamountoflandrequiredremainsstable.Atthesametime,though,fertilizeruseandirrigationareincreasing;itisthereforedifficulttojudgewhetheroverallenvironmentalimpactsarestable,orwhethersomeremainstableordeclineattheexpenseofothersthatkeeprising.Inparticular,impactsonbiodiversitylossarenotquantifiedinawaythatenablesdecouplingtobeassessed.Forindustrialmineralsandores(mainimpactsconsidered:landdegradationatextractionsitesandenergyconsumption)indicationssuggestthatimpactsassociatedwiththeextractionphasemayberisingover-proportionally,duetoashiftinthelocationofextractionsites(towardsdevelopingcountrieswithpossiblylowerenvironmentalstandards)andaglobaldeclineinoregradesimplyingrisingoverburdenandlanddegradationrelativetotheamountsextracted.Withconstructionminerals(mainimpacts:landdegradation,wastesandCO2emissionsfromtransportationandcementproduction)someenvironmentalimpactsarecloselyproportionaltothevolumesofextractionanduseoftherespectiveresource.Otherenvironmentalimpactsassociatedwiththeusephaseofconstructionmineralsentirelydependonthequalityofuseandmaynotberelatedtothequantitiesofthematerialsused.

2.4 Scenarios for future global materials use

Theprecedingsectionsindicatedthatthepresenthighlevelofannualrawmaterialextractionandthefuturetrendoffurtherstrongincreasesindemandconstituteaseriousthreatofresourceoveruseanddepletion,aswellasachallengetotheworld’sclimateandvariousecosystemservicesinthefuture.Inthe20thcentury,itwasmainlythehighlyindustrializedcountries(Europe,AmericaandafewAsiancountries)thatcontributedmosttoglobal

resourceconsumption,atleastonapercapitabasis.However,thenewlyindustrial-izedanddevelopingcountriesarenowplayinganincreasinglyimportantrole.Tworelevantfactorsarepopulationnumbersandrisingmetabolicrates(resourceuse/capita).Metabolicratesvarybetweencountriesbyafactoroftenormore,dependingespeciallyondevelopmentstatusandpopulationdensity(seeFigure2.7).Theglobalaveragepercapitametabolicrateintheyear2000issomewherebetween8tons(Behrensetal.,2007;Krausmannetal.,2009)and10tons(Krausmannetal.,2008)ofannualresourceuse.However,theaveragemetabolicratefortheindustrializedcountries(whichmakeuponlyonefifthoftheworldpopulation)istwicetheglobalaverageandfourorfivetimesthatofthepoorestdevelopingcountries.

ThescenariospresentedhereassumeacontinuationofthecurrentpatternsdocumentedinFigure2.7,thatdenselypopulatedregionsandcountriesrequireonlyabouthalfthemetabolicrate(annualresourceusepercapita)forthesamestandardoflivingassparselypopulatedareas.Allscenariosalsoassumethatdevelopedindustrializedanddevelopingcountries(someofwhicharealreadycommittedtorapidindustrializationoftheireconomies)shouldovertime converge to a point where all countries have similar levels of resource use. This does not at all imply that developing countries must all follow the Western industrial model. ThisoptionistheBusiness-as-Usualscenario(Scenario1).Scenario2impliesasignificantdeviationfromthetraditionalWesternindustrialmodel,possiblysimilartothemodeladoptedbymanyLatinAmericaneconomies.Scenario3envisagesaveryradicalbreakfromthetraditionalWesternindustrialmodel,inparticularfordevelopingindustrializingcountrieslikeChina,Brazil,SouthAfrica,Mexico,Turkey,India,Indonesia,andthePhilippines.Scenario3alsomeansthat


26

developedindustrializedcountrieswillneedtofundamentallybreakfromtheresource-andenergy-intensivehighconsumptioneconomicgrowthmodelthatremainsacentralpointofagreementforpoliticalpartiesinthesecountries.AllthreeScenariosassumethatthisconvergenceprocesswillbecompletedbytheyear2050.Furthermore,all three Scenarios accept similar assumptions to those that underlie the IPCC’s SRES scenarios,17withoutexplicitlyintroducingGDPgrowthasavariable.

TheScenariosareoptimisticaboutthefutureintworespects.First,similarmodesofanalysis(Romero-Lankaoetal.,2008)haveshownthatatpresentconvergencetrendscanbeobservedforsomecountries,butnotforothers.Theimplicationsofthisarethatthevisionof‘convergenceby2050’

17 In the SRES scenarios, convergence of income (GDP/capita) is somewhat more protracted and occurs, depending on the scenario, between 2050 and 2100 (see the analysis of Romero-Lankao et al., 2008, p.23).

(whichexpressesanormativecommitmenttosocio-economicjustice)isunrealisticandthe‘fortressworld’scenarioasoutlinedintheGEOscenarios(UNEP,2004)mightbemorelikely.ThisscenarioisexcludedfromtheScenariosbecause thepurpose here is to reveal the implications for resource consumption of the normative assumptions that underlie different economic growth and development models. Forexample,Scenario1:BusinessAsUsualrevealstheunderlyingresourceuseimplicationsofthegrowthanddevelopmentmodeladvocatedbytheGrowthCommissionwhich,inturn,reflectsamainstreameconomicpolicyconsensusatagloballevel.Scenario3ispointingouttheresourceuseimplicationsoftheIPCC’srecommendedscenarioforpreventingwarmingbymorethan2degreesthatmostgovernmentsintheworldapproved.Nodoubt,a‘fortressworld’scenariowouldrequirefarlessthantheprojected140billiontons(140Gt)ofresourcesannually,buttheresultwouldbe

© S

amra

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27

severeconflictbetweenthosewhobenefitandthosewhodonot–orwhatisreferredtothesedaysasResourceWars.Second,no assumption of physical constraints is built into the model.Thisisclearlyunrealistic,butintentionalbecausenearlyallthemainstreamgrowthanddevelopmentmodelsmakeasimilarassumption.Thesescenariosseektodemonstratetheconsequencesofthis.Forexample,Scenario1showsthatbusiness-as-usualmeansassumingthat140billiontons(140Gt)ofresourcesareavailableforannualextraction,useanddisposal.Thismaynotbestatedexplicitlyinanyglobalgrowthprojectionthatadvocateseitherexplicitlyorimplicitlyabusiness-as-usualapproach,butitisneverthelessaglaringunsubstantiatedassumptionaboutavailableresourcesforuseoverthelongterm.Thepurposehereistorevealthisassumptioninordertovalidatetheneedtoquestionitempirically.Wherevertheglobalconsumptionofaresourcecomescloseinfuturetosupplyconstraints,thethreatofdistributionalconflictswillalwaysarise.Toconfirmthisoneneedsonlytorefertothemanyresource-basedconflictsthatalreadyexistintheworldtoday(seeUNEPreportonresourceconflicts18).

Basedupontheseconsiderations,thefollowingScenariosfortheyear2050maybecomparedtothebaselineoftheyear2000.19AllScenariosassumeapopulationchangeaccordingtoUNprojections(mediumvariant),calculatedcountrybycountry.They assume the ratios of metabolic rates between high and low density countries to remain stable, and they assume that the composition by material components remains the same.

18 http://www.unep.org/pdf/pcdmb_policy_01.pdf19 The year 2000 is used as a baseline, as it best reflects a metabolic

equilibrium that dominated the 25 preceding years (see Figure 1.2) and was mainly shaped by trends in the industrialized countries. In the years since, a new phase of growth can be observed that we chose to capture in the scenario part of our analysis, as according to more detailed data it is already due to a “catching up” process by major developing countries (such as China and India).

2.4.1 Scenario 1: Business as usual

Freeze (industrial countries) and catching up (rest of the world)

Inthisscenario,relativedecouplinginindustrialcountriescontinuesasithassincetheearly1970s.Thismeanstheiraveragemetabolicratesremainstableatyear2000levels(freeze),whiledevelopingcountriesbuilduptothesamemetabolicrateby2050(catchingup).Fordevelopingcountries,thisimpliessomethingmorethanadoublingoftheirmetabolicrates,which,incombinationwithprojectedpopulationgrowth,booststheirmaterialdemandastheirmostimportantmethodforeradicatingpoverty.Forsomeoftheleastdevelopedcountries,convergenceimpliesafivefoldincreaseintheirmetabolicrates.Thisscenariocomplieswellwiththetrendsobservedinrecentdecades(‘businessasusual’).Forindustrializedcountries,metabolicratesremainedfairlystablesincethemid1970s(BringezuandSchütz,2001;Eurostat,2002;Weiszetal.,2006;NIES/MOE,2007;Rogichetal.,2008;andseveralothernationalMFAstudies20),whileinmanydevelopingcountriesasteepincreasecouldbeobserved(Giljum,2002;Gonzalez-MartinezandSchandl,2008;XiaoqiuChenandLijiaQiao,2001;Perez-Rincon,2006;Russietal.,2008;seealsoOECD,2008).Inshort,forthisscenariothelong-termtrendisacontinuationofrelativedecouplingfordevelopedeconomies,andeffectivelynodecouplingforemerginganddevelopingeconomies.21

Thisscenarioresultsinaglobalmetabolicscaleof140billiontons(140Gt)annuallyby2050,andanaverageglobalmetabolicrateof16tons/capita.Inrelationtotheyear2000,this

20 Barbiero et al., 2003; Schandl et al., 2000; Scasny et al., 2003; Pedersen, 2002; Maenpaa und Siikavirta, 2007; Muukkonen, 2000; German Federal Statistical Office – Statistisches Bundesamt, 2000; Hammer and Hubacek, 2003; De Marco et al., 2000; Femia, 2000; Isacsson et al., 2000; Schandl and Schulz, 2002; DETR/ONS/WI, 2001.

21 This BAU-scenario complies very well with what SERI Global and Friends of the Earth Europe (2009) have calculated as trend projections, in which they arrive at an increase of annual global resource use from 55 billion tons in the year 2000 to 100 billion tons in the year 2030.


28

wouldimplymorethanatriplingofannualglobalresourceextraction,andestablishglobalmetabolicratesthatcorrespondtothepresentEuropeanaverage.

Thisscenarioassumesnomajorsysteminnovationtowardssustainabilitysuchasaswitchawayfromfossilenergy,whichrepresentsanunsustainable future in terms of both resource use and emissions, probably exceeding all possible measures of available resources and assessments of limits to the capacity to absorb impacts. Averageannualpercapitacarbonemissionswouldtripleandglobalemissionswouldmorethanquadrupleto28.8GtC/yr.SuchemissionsarehigherthanthehighestscenariosintheIPCCSRES(NakicenovicandSwart,2000),butsincetheIPCCscenarioshavealreadybeenoutpacedbydevelopmentssince2000(Raupachetal.,2007),itmightinfactbeclosertotheobservabletrends.

2.4.2 Scenario 2: Moderate contraction and convergence

Reduction by factor 2 (industrial countries) and catching up (rest of the world)

Inthisscenario,industrialcountriescommittoanabsolutereductionofresourceuseandreducetheirmetabolicratesbyafactorof2(i.e.fromanaverageof16tons/capitato8tons/capita),whiledevelopingcountrieswouldthenmoderatelyincreasetheirmetabolicratesandcatchuptothesereducedratesbytheyear2050.Thisscenariopresupposessubstantialstructuralchange,amountingtoanewpatternofindustrialproductionandconsumptionthatwouldbequitedifferentfromthetraditionalresource-intensiveWesternindustrialmodel.Sofar,despiteefficiencygainsinvariousdomains,metabolicratesinthepasthavedeclinedinabsolutetermsinonlyafewindustrializedcountries.Giventheresourceproductivitygainsthathaveoccurredinthepast,thesemetabolicratescouldsupporta

comfortablemiddleclasslifestyleforallinbothdevelopinganddevelopedeconomies.Fordevelopingcountries,thisscenarioimpliesrelativedecouplingtoincreasetheirmetabolicratesbynomorethanafactor1.2to1.3(dependingupondensity)which,inturn,representsasubstantialcommitmenttosustainability-orientedinnovationsfordecoupling.

Thisscenarioamountstoaglobalmetabolicscaleof70billiontons(70Gt)by2050,whichmeansabout40%moreannualresourceextractionthanintheyear2000.Theaverageglobalmetabolicratewouldstayroughlythesameasin2000,at8tons/capita.TheaverageCO2emissionspercapitawouldincreasebyalmost50%to1.6tonspercapita,andglobalemissionswouldmorethandoubleto14.4GtC.

Takenasawhole,thisscenariowouldbeachievableonlywithsignificantdecouplingthroughinvestmentsinsustainability-orientedinnovationsthatresultinsystemsofproductionandconsumptionthatgeneratefarmoreperunitofresourcesthaniscurrentlythecase.Whileoverallconstraints(e.g.foodsupply)willnotbetransgressedinaseverewaybeyondwhattheyarenow,22developingcountriesinthisscenariohavethechancetoachievearisingshareofglobalresources,andforsomeanabsoluteincreaseinresourceuse,whileindustrialcountrieshavetocuttheirconsumption.TheemissionsthatcorrespondtothisscenarioaremoreorlessinthemiddleoftherangeofIPCCSRESclimatescenarios.

2.4.3 Scenario 3: Tough contraction and convergence

Freeze global resource consumption at the 2000 level, and converge (industrial and developing countries)

Inthisscenario,thelevelofglobalresourceconsumptionin2050islimitedtoequalthe

22 In terms of global footprint; existing resource consumption exceeds the Earth’s carrying capacity, let alone another increase of 40%.


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globalresourceconsumptionoftheyear2000.Itisanticipatedinthisscenariothatmetabolicratesofindustrialanddevelopingcountriesconvergeataround6tonspercapita.Thisscenariorequiresfar-reachingabsoluteresourceusereductionsintheindustrializedcountries,byafactorof3to5.Inthisscenario,somecountriesclassifiedas‘developing’intheyear2000wouldhavetoachieve10–20%reductionsintheiraveragemetabolicrateswhilesimultaneouslyeradicatingpoverty–anoutcomethatisonlyconceivableifitisacceptedthatsustainability-orientedinnovationscanresultinradicaltechnologicalandsystemchange.

Thisscenarioamountstoaglobalmetabolicscaleof50billiontons(50Gt)by2050(thesameasintheyear2000)andallowsforanaverageglobalmetabolicrateof6tons/capita.TheaverageCO2percapitaemissionswouldbereducedbyroughly40%to0.75tons/capita,soglobalemissionswouldremainconstantatthe2000levelof6.7GtC/yr.

Takenasawhole,thiswouldbeascenariooftoughrestraintthatwouldrequire

unprecedentedlevelsofinnovation.Thekeymessageofthisscenarioisthatdespitepopulationgrowthtoroughly9billionpeople,thepressureontheenvironmentwouldremainroughlythesameasitisnow.TheemissionscorrespondapproximatelytothelowestrangeofscenarioB1oftheIPCCSRES,butarestill20%abovetheroughly5.5GtC/yradvocatedbytheGlobalCommonsInstituteforcontractionandconvergenceinemissions(GCI,2003).

Theimplicationsofthesescenariosarefarreaching.Giventhatthe‘business-as-usual’(BAU)scenario(Scenario 1) assumesthatdevelopingcountriesadoptgrowthanddevelopmentstrategiesaimedat‘catchingup’withtheresourceconsumptionpatternsofindustrializedcountries,thiswillresultinthetriplingofglobalannualresourceextractionandconsumptionby2050.Specifically,this means more than doubling biomass use, while almost quadrupling fossil fuel use and tripling the annual use of metals (ores) and construction minerals. Thisscenariowouldplaceanequivalentburdenontheplanetasifthehumanpopulation

Figure 2.15. Resource use according to three different scenarios up to 2050

Source: Krausmann et al., 2009 (Development 1900–2005) and own calculations (see text)

● Development 1900–2005● Freeze and catching up● Factor 2 and catching up● Freeze global material consumption

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Baseline

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Scenario 2:Moderate

contraction and convergence

Scenario 3: Tough

contraction and convergence

Year 2000 2050 2050 2050

World population(Billions) 6.0 8.9 8.9 8.9

World Metabolic rate(Tons/capita/year) 8 16 8 5.5

World Metabolic scale(Billion tons/year) 49 141 70 49

Metabolic rate Industrialized High density 13 13 6.5 5

Industrialized Low density 24 24 12 8

DevelopingHigh density 5 13 6.5 5

DevelopingLow density 9 24 12 8

Table 2.1. Metabolic scales and rates, overview of scenario analysis

tripledbytheyear2050to18billionpeople,whilemaintainingtheresourceconsumptionpatterns(metabolicrate)oftheyear2000.Moreover,thisincreasewould,ifglobalmanufacturingcontinuestobeconcentratedinlow-wageenvironmentsendowedwithviableinfrastructuresandinstitutions,takeplaceincountriesthatwereclassifiedasdevelopingcountrieswithaveryhighpopulationdensityintheyear2000,suchasChinaandIndia.Thus,theburdenofresourceflowsperunitareawouldin2050besubstantiallyabovetheEuropeanorJapaneselevelsoftoday.ThisBAUscenarioisincompatiblewiththeIPCC’sclimateprotectiontargets.

AlthoughScenario 2 (moderate contraction and convergence) assumessubstantialstructuralchangeinthedominantindustrialproductionandconsumptionpatterns,itstillimpliesaroughly40%increaseinannualglobalresourceusewithassociatedenvironmentalimpacts.Ifglobalmanufacturingcontinuestobeconcentratedinlow-wageenvironments,practicallyallofthatincreasewouldoccurinthecountriesclassifiedas‘developing’intheyear2000.Suchafastincreaseinresource

consumptionwouldrendertheexistingpoliciesofa‘circulareconomy’(OECD,2008)verydifficult,ifonlybecausethepotentiallyreusablewastesareverymuchsmallerthantherequiredinputs.For the industrialized countries, achieving a factor 2 reduction of metabolic rates would imply resource productivity gains of 1–2% annually (whichiswithintherangeoftheproductivitygainsofthepasttwodecades),netofanyincome-basedreboundeffects(Greeningetal.,2000).Morerealistically,itwouldrequiremuchhigherinnovationratesandproductivity(efficiency)gains.23Ineithercase,thisscenariowouldrequiresubstantialeconomicstructuralchangeandmassiveinvestmentsininnovationsforresourcedecoupling.

Scenario 3 (tough contraction and convergence) doesnotraiseglobalresourceconsumptionabovethe2000

23 One should be aware that achieving a substantial reduction in resource use on an economy-wide per capita level is much more difficult than achieving substantial resource productivity gains within certain areas of production. For an overall “Factor 2”-reduction of metabolic rate, much larger resource productivity gains have to be achieved in some areas (cf. Weizsäcker et al., 1997 “factor 4”; or Schmidt-Bleek, "factor 10" cf. Hinterberger and Schmidt-Bleek, 1999; or “factor five” in, Weizsäcker, et al., 2009), while, for example, food supply can only be reduced by a much smaller margin.


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levels;thusitwouldbemostcompatiblewiththeexisting(ifunknown)limitstotheEarth’sresourcebase,andbestadjustedforasmuchcircularityineconomiesasistechnicallyfeasible.Toachievethisoverallstrategicgoal,absoluteresourceusereductionswillnotonlybenecessaryindevelopedeconomies,butalsoinalreadyadvanceddevelopingcountries.Mostpoliticiansarelikelytoregardthisscenarioastoorestrictiveintermsofdevelopmentalgoalssuchasreducingpovertyandprovidingforthematerialcomfortofarapidlyexpandingmiddleclass.Thusthisscenariocanhardlybeaddressedasapossiblestrategicgoal,butisvaluableinsofarasitilluminatestheimplicationsofahypotheticalbarriertofurtherglobalincreaseofresourceextraction.

All scenarios demonstrate that without significant improvements in resource productivity, it will not be possible to meet the needs of nine billion people (including the eradication of poverty) by 2050. Nevertheless,thebusiness-as-usualscenario(Scenario1)isaprojectionintothefutureofthecurrentlystructuredandmanagedglobaleconomy.Itassumeslimitedinvestmentsininnovationsforbothresourceandimpactdecoupling.Thepolicyimplicationsareclear:astheeconomicconsequencesofresourcescarcitiesanddegradedenvironmentsstarttoworktheirwaythroughtheeconomy,policy-makingwillstarttotakemoreandmoreseriouslytheimplicationsofscientificresearchaboutboththeconsequencesofBAUandpossiblysolutions.However,evenifitwerepossibletobuildaglobalpoliticalconsensusontheneedforabsoluteresourceusereductionsindevelopedeconomiesandrelativedecouplingindevelopingcountries(Scenario2),changewillonlybeabletogo

asfastasthelevelsofinvestmentininnovationsfordecouplingacrosstheentirevaluechain.Althoughithasbeenassumedinthesescenariosthatimpactdecouplingfollowsresourcedecoupling,inrealityitisimpossibletopredictwhereinnovationsfordecouplingwillhavethegreatestimpact.Itisconceivablethatimpactdecouplingcouldevenaccelerateaheadofresourcedecoupling(e.g.viaradicalpollutionreduction),butthereversecouldalsobetrue(e.g.biomassproductiontoreduceCO2couldexacerbatesoilandwaterscarcities).

Whateverthedynamics,thesingleclearpolicyimplicationofScenario2isthatanyGovernmentthatgetsaheadofthegamebyfacilitatinginvestmentsnowininnovationsfordecouplinginthefuturewillclearlyreapthebenefitswhenpressuresmountforotherstochangerapidlybydependingontechnologytransfersfromelsewhere.

Scenario3ismoreorlessconsistentwiththeIPCCassessmentsofwhatwouldberequiredtopreventglobalwarmingbeyond2degrees.AlthoughScenario2envisagesamixofabsolutereductionsandrelativedecoupling,thepolicyimplicationisclear:Scenario3willrequiregreaterglobalconsensusontheneedforconvergencethanScenario2,andthisconsensuswouldneedtobesupportedbyaclearcaseastowhypoverty reduction in a resource scarce world will depend more on innovations for decouplingthanifinvestmentscontinuetoprioritizeBAUproductionandconsumptiontechnologiesandsystems.Equally,threatstoover-consumptionneednotbeequatedtothreatstowell-beingandmiddleclasslifestyles,butratherasthreatstoparticularkindsofresource-intensivemodesofconsumption.


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3.1 Rethinking growth

Thelogicofdecouplingasdefinedinthisreporthassignificantimplicationsfortheunderstandingofeconomicgrowth,basedonarichtraditionwithinthesustainabledevelopmentliteraturethathasattemptedtoredefinegrowthfromasustainabilityperspective.

Theterm‘growth’issurroundedbyconfusion,asthetermmeansdifferentthingstodifferentaudiences.Whenbusinessesandgovernmentstalkaboutgrowththeygenerallymeaneconomicgrowth,theamountofeconomicvalueand

monetarytransactionsusingindicatorssuchasGDP.Forenvironmentalists,growthtendstobefocusedonthegrowthofphysicalthroughputintheeconomy,orphysical/materialgrowth.

Economic growth and physical growth are different.Economicgrowth,measuredbytheGDPofacountry,isdefinedastheadded(monetary)valueofallfinalgoodsandservicesproducedwithinacountryinagivenperiodoftime,usuallyacalendaryear.Itincludesthesumofeconomicvalueaddedateverystageofproduction(theintermediatestages)ofallfinalgoodsandservicesproducedduringthattime.

Decoupling and the need for system innovations 3

© C

hala

bala

/Dre

amst

ime

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Physicalgrowthoftheeconomymeansthatitspreadsovermorephysicalarea,orithasalargermaterialandenergythroughput,orithasalargerstockofphysicalproducts,buildingsorinfrastructure.Physical growth is often coupled to increased environmental pressures, damage and resource depletion.Basedonthisunderstandingofthesetwotypesofgrowth,itbecomesconceptuallypossibleforeconomicgrowth(definednowasmoneyflow,orvalue)tobedecoupledfromphysicalgrowthoftheeconomy(resourceconsumption)andassociatedenvironmentalpressures.Ekins(2000)madethesamepointwhenheargued:

“Itisclearfrompastexperiencethattherelationshipbetweentheeconomy’svalueanditsphysicalscaleisvariable,andthatitispossibletoreducethematerialintensityofGNP.This establishes the theoretical possibility of GNP growing indefinitely in a finite material world.”

Writingfromadevelopingcountrycontext,Gallopin(2003)developsasimilarlineofargument.Hedistinguishesbetweendevelopment(improvementsinwell-beingplusmaterialeconomicgrowth),maldevelopment(materialeconomicgrowthwithnoimprovementsinwell-being),underdevelopment(nomaterial

economicgrowthandnoimprovementsinwell-being),andsustainabledevelopment(improvementsinwell-beingplusnon-materialeconomicgrowth)(Figure3.1).Hearguesasfollows:

“Intheverylong-term,therearetwobasictypesoftrulysustainabledevelopmentsituations:increasingqualityoflifewithnon-materialgrowth(butnonetmaterialgrowth)andzero-growtheconomies(noeconomicgrowthatall).Sustainabledevelopmentneednotimplythecessationofeconomicgrowth:azerogrowthmaterialeconomywithapositivelygrowingnon-materialeconomyisthelogicalimplicationofsustainabledevelopment.Whiledemographicgrowthandmaterialeconomicgrowthmusteventuallystabilize,cultural,psychological,andspiritualgrowthisnotconstrainedbyphysicallimits.”(Gallopin,2003,p.27)

ThelogicofGallopin’sframeworkisthatdevelopmentstrategiesfordevelopingcountriesshouldbesplitintotwomodes(whichcouldbeconsecutivephasesincertaincircumstances).Thefirstmodewouldentailmovingfrommaldevelopment/underdevelopmenttodevelopmentwherebyimprovementsinwell-beingforthemajorityareachievedviainclusivematerialeconomicgrowth.Thisiswhatmainstreamdevelopmenteconomicsisallabout,anditisthecentralfocusofTheGrowthReport

Source: Redrawn from Gallopin, 2003, p. 27

Figure 3.1. The different guises of development

Increasing quality of life

IncreasingGDP

4 Sustainable development

Decreasing or steady GDP

5 Zero growth

1 Unsustainable development

Material growth

Reduced/non material growth

Constant or decreasing quality of life

IncreasingGDP

Decreasing or steady GDP

3 Under- development

2 Mal- development

Material growth

Reduced/non material growth


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thatbringstogethertheperspectivesofthemostinfluentialeconomistsintheworldtoday(CommissiononGrowthandDevelopment,2008).However,itvirtuallyignoresecologicalsustainability,exceptforaminorreferencetoglobalwarming.

Theseconddevelopmentmodewouldentailashiftintosustainabledevelopmentwherebyimprovementsinwell-beingareachievedvianon-materialeconomicgrowth.Whenreferencesaremadeto‘leapfrogging’,thisusuallymeanseithershorteningthetransitionfromthefirsttothesecondmodeconsiderably,orskippingthefirstphasealtogether(Sachs,2002).Leapfrogging,however,willdependentirelyonwhetherthecapacityforinnovationexistswithinaparticulardevelopingcountryandwhether,inturn,anappropriatesetofinstitutionalarrangementsareinplacetoprovideincentivesandharnessinnovationsthatdemonstrateeconomicallyviable‘leapfrog’technologies.

TheUKSustainableDevelopmentCommission(UK-SDC)hasproducedareportentitledProsperitywithoutGrowth:theTransitiontoaSustainableEconomy(Jackson,2009).WhatGallopincalls‘non-materialgrowth’,theUK-SDCcalls‘prosperity’whichiswhen“humanscanstillflourishandyetreducetheirmaterialimpactontheenvironment”.Onceprosperityceasestomeanincreasingconsumptionofmaterialgoods,thenthefocusshiftstowardsthecapabilitiesthatcitizenswillneedto“participatemeaningfullyandcreativelyinthelifeofsociety”.However,thereportdismissesrelativedecouplingonthegroundsthatthissimplyimpliesincreasingconsumptioninmoreefficientways.Itdismissesabsolutedecouplingonthegroundsoflackofevidencethatthishashappenedinpractice,orthatitcanhappeninpracticeindevelopedeconomies.Instead,thereportturnstoanupdatedversionofHermanDaly’sclassicnotionofasteady-stateeconomy(orwhatGallopincalls‘non-growtheconomies’),

coupledtoaprogrammetodismantletheinsatiablehungerforgoodsthatdrivescontemporaryconsumerculture.Itlacksaconceptionoftransition,somethingthattheconceptsofresourceandimpactdecouplingcanprovide.

Inconclusion,decouplingcanleadtoarethinkingofassumptionsabouteconomicgrowthand,byimplication,GDPasthekeyindicatorofgrowth.Alternativeindicatorsofgrowthwillberequiredtoencouragedecouplinganddematerialization.AnexampleofthisistheGenuineProgressIndicator(GPI)(Talberth,2008;Talberthetal.,2007)oraHappinessIndex(Stiglitzetal.,2009).TheGDPindicatoronitsownwillalwaysdependonrisingquantitiesofextractedresources,especiallyastheyaredepletedandpricesarepushedupwards,which,inturn,willacceleratetheirdepletion.TheGPIputsinplacedifferentincentives,especiallyifitcanbereinforcedbyamaterialflowanalysisperspective(Haberletal.,2004).However,itwouldnotbeadvisabletoeliminatetheuseofGDPasanindicatoraltogether.Itshouldberetainedasagoodmeasureofeconomicactivity,butnotasagoodmeasureofhumanprogressandecologicalsustainability.Other indicators are needed to complement the GDP indicator in order to generate a more balanced understanding of development. TheHumanDevelopmentIndexisoneexample.Thenextstepistofindanagreedindicatorofdevelopmentthatreflectsprogresstowardsmoresustainablemodesofproductionandconsumptionbymeansofdecoupling.AstheChinacasestudyinChapter8suggests,aDecoupling Indexmightbeoneelementofsuchanindicator.

3.2 Innovation and decoupling

Thecorelogicoftheargumentthusfaristhatamoresustainableglobaleconomywilldependonthedecouplingofgrowthratesfromtheratesofresourceconsumption

3. Decoupling and the need for system innovations

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(‘resourcedecoupling’)andenvironmentaldegradation(‘impactdecoupling’).Tobringaboutthesechanges,radicallynewvisionsofafutureglobalsocio-ecologicalmetabolismwillberequired.Totranslatethesevisionsintopracticewillrequirerapidimprovementsinthecapacityforinstigatinginnovationsformoresustainableresourceuse.ThesecondreportoftheDecouplingWorkingGroupwilldocumentmanyoftheseinnovationsinmoredetail,butthissectionwilloutlinetherationaleforlinkinginnovationtosustainability.

Economistswhoaccepttheassumptionsofendogenousgrowththeoryseeknowledgeandinformationasthekeydriversofeconomicgrowth,andthatthereturnsoninvestmentsinknowledgeoutweighthereturnsoninvestmentsincapitalandun-andsemi-skilledlabour.Newknowledgeandinformationprocessingcapacitiesthatgetbuiltintoproductionprocessesastechnologies,operatingroutinesormanagerial/organizationsystemsatthefirmand/ormacro-economylevelareconsideredinnovations.Theseinnovationsareafunctionof‘milieusofinnovation’whereoverlappingnetworksofexpertise,knowledgeandsystemdesignmeshtogetherinwaysthatcreateinformation-drivengrowthenginesthatreplacetheold‘smokestack’industrialnodesthatweretheprimarydriversofeconomicgrowthuntilthe1960s(withSiliconValleybeingthearchetypalmodelofthenewapproach)(Evans,2006;foroverviewsseeCastells,1997;Evans,2005).

Theproblemwiththenationalinnovationssystemsthathavebeenpromotedbymanygovernmentsaroundtheworldoverthepasttwodecadesisthattheyareaimedatpromotingeconomicgrowthwithinsufficientattentionpaidtothevariousdimensionsofdecoupling(cleanerproductionbeinganobviousexception).Inotherwords,innovationisnotinandofitselfagoodthingfromasustainableresourcemanagementperspective.Anewconceptofinnovationwillberequired(Montalvo,2008).

Eco-innovationissuchanewconcept.FortheEuropeanCommission,eco-innovationisdefinedas“theproduction,assimilationorexploitationofaproduct,productionprocess,serviceormanagementorbusinessmethodthatisnoveltotheorganisation[sic.](developingoradoptingit)andwhichresults,throughoutitslifecycle,inareductionofenvironmentalrisk,pollutionandothernegativeimpactsofresourcesuse(includingenergyuse)comparedtorelevantalternatives.”(KempandPearson,2008).Buildingonthisdefinition,eco-innovationisdefinedbyOECD(2009)as“thecreationorimplementationofnew,orsignificantlyimproved,products(goodsandservices),processes,marketingmethods,organizationalstructuresandinstitutionalarrangementswhich–withorwithoutintent–leadtoenvironmentalimprovementscomparedtorelevantalternatives”.Inthisdefinition,eco-innovationisnotlimitedtoenvironmentally-motivatedinnovations,butincludes“unintendedenvironmentalinnovations”.Theenvironmentalbenefitsofaninnovationcanbeasideeffectofothergoals,suchasrecyclingheavymetalsinordertoreduceabatementcosts.Institutionalinnovationssuchaschangesinvalues,beliefs,knowledge,norms,andadministrativeactsareincluded,alongwithchangesinmanagement,organization,lawsandsystemsofgovernancethatreduceenvironmentalimpacts.However,eco-innovationtendstofocusonwhatthisreporthasreferredtoas‘impactdecoupling’.Sustainability-orientedinnovationsforresourcedecouplingisadifferentmatteraltogether.

Whereas the first generation of innovation investments has focused on labour productivity through the application of knowledge embedded in information systems, the second generation will need to focus on resource productivity.InFigure3.2,theresultsofthefirstgenerationshowsubstantialincreasesinlabour


36

productivity,withmaterialsandenergyproductivitylaggingbehind.PricesasthekeydriveroffirstgenerationinnovationsarereflectedinFigure3.3,showingthatlabour

costshavegoneupsteadily,whilematerialsandenergypricesremainedstaticorevendeclined(untilrecently,whenmanymaterialcostsincreasedrapidly).

Figure 3.2. Resource productivity, labour productivity and energy productivity in EU-15

1970 1980 1990 2000 2010

Note: Labour productivity in GDP per annual working hours; material productivity in GDP per domestic consumption (DMC) and energy productivity in GDP per total primary energy supply (TPES).Source: EEA, 2011

Indexed 1970=100

250

200

150

100

1970 20101980 1990 2000

● Labour productivity● Materials productivity● Energy productivity

Figure 3.3. Price dynamics of wages, materials and electricity

1960 1970 1980 1990 2000 2010

Note: All series are in real prices without direct taxes. Wages are based on collectively agreed wages (CAO) in the Netherlands (source CBS). Materials are from the CRB Commodity Price Index (CCI) reflecting world-wide prices. Electricity prices are from CBS and Eurostat. Own calculations in the wages series and electricity series in order to standardize different series on each other (multiplicative standardization).Source: De Bruyn et al., 2009

Indexed 1960=100

600

400

200

01960 20101980 1990 2000

● Wages, price● Materials, price● Electricity, price

1970


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Thekeytodecouplinginpracticewillbeinnovationsthatmakeitpossibletoincreaseresourceproductivity,therebyreducingmetabolicrates.Increasingresourceproductivitymayalsojustifyincreasingresourceprices,benefittingresourceproducers(oftenindevelopingcountries).Innovationforresourceproductivity,therefore,maywelldefinethecorechallengeforsustainableresourcemanagementforthecomingdecades.Onelessonfrominnovationstudiesisthatstateinterventionisrequiredtosustainhighlevelsofconsistentinvestmentininnovation,becausethereturnsoninvestmentininnovationaccumulatewithinthepublicdomain,evenifthesearefundedbyprivateagentswho,therefore,donotalwayshaveanincentivetoinvestininnovation,especiallyduringrecessionarytimes.

Fourkeyinsightsoninnovationarerelevantforsustainableresourcemanagement(Lundvall,2007):

• Innovationsaredifferentfrominventions.Aninventionresultsfromanewideaemergingforanewproductorprocess,whileaninnovationisthesynthesisoftheideawiththenecessarysetoffinancialandinstitutionalarrangementstoimplementthenewideaonabroaderscale;

• Innovationsarenotrandomevents,butarerathertheresultofspecificincentivesandinvestments;

• Innovationsdonotarisefromsingleindividualsorsinglefirms,butratherfromwell-networkedeconomicagentsworkingcollaborativelywithknowledgeinstitutions(suchasuniversities)andinwaysthatareopen,creative,problem-drivenandconnectedtolearningfrompractice;and

• Innovationsarenotaboutbuildingupstocksofknowledgecapital(patentedideas)createdfortradeintheso-called‘knowledgeeconomy’,butrather

innovationsarecontinuouslearningprocessesresponsivetothefactthatinahighlycomplexglobalizedworld,fixedbitsofknowledgerapidlybecomeobsolete–themoderneconomy,therefore,isalearningeconomy,notaknowledgeeconomy.

Innovationisnotsimplyabouttechnologicalsolutions(theso-called‘techno-fix’approach).Rather,innovationisaprocessthathasthreedifferentforms:

• technologicalinnovations,providingspecifictechniquesformanaging/processingmaterialsandenergy(e.g.thesteamengine,hydrogenfuelcell,micro-chip,oraprocessthatachievesmorewithless);

• institutionalinnovationsformanagingonasociety-widebasis–orevenglobally–incentives,transactioncosts,rents,benefitdistribution,dispersal,contractualobligations,precautions,andindividualobligations;and

• relationalinnovationsformanagingcooperation,socialcohesion,solidarity,sociallearningandbenefitsharing.

Thesethreeformsofinnovationprovidedifferentoutcomes.AsFigure3.4suggests,toachievetheradicalbreakfromBAUpatterns(i.e.Factor5toFactor10improvementsinresourceproductivity),allthreewillberequired.

Pastinnovationconcernedwitheconomiccompetitivenessandgrowthhascontributedtoanextraordinaryincreaseinproduction,consumptionandeconomicactivityandthereforeimprovementsintheaveragehumanwelfare.However,thishasoccurredalonganunsustainabletrajectory.Innovationnowneedstobeharnessedforresourceproductivityandenvironmentalrestoration.Mergingtheseseeminglydisparatethemesofsustainabilityandsystemsofinnovationoffersanopportunitytorealize


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‘sustainablesystemsofinnovation’(Montalvo,2008),or‘sustainability-orientedinnovationsystems’(Stammetal.,2009).Thisrequiresinnovationsthatcontributetodecouplingthroughreducingenvironmentalpressureandcontributingtosustainabilityduringeconomicactivities(Stammetal.,2009;Montalvo,2008).Asustainability-orientedinnovationsystem(SOIS)“referstothetransitionfromonesocio-technicalsystemtoanother,qualitativelydifferentone”(Geels&ElzeninStammetal.,2009,p.26).

Stammetal(2009)advocatetheSOISapproach,showinghowinnovationhasbeenlinkedtosustainabilitythrough‘systeminnovation’inwhichsocio-technicalsystemsprovidethelensthroughwhichsystemstransitionscanbeanalysedandunderstood.ThereforeSOISprovideadeparturepointfordecoupling,areductionofsocio-economicmetabolismandsustainability.

Geels(2004)extendedthenarrowfocusofinnovationatthesectoralleveltoencompassabroaderperspectiveoftechnology,includingproduction,

distributionandusewithinsociety.Thisfurthersunderstandingoftransitionswhichaffectbothtechnologyandthesysteminwhichthattechnologyisembedded(Geels,2004);inthesecasesthesystemandtechnologyadaptandco-evolveassocio-technicalsystems(vonMalmborg,2007).Furthermore,thescopeprovidedatthesystemscaleallowsfortheradicalinnovation(paradigmshift)neededtoaddresssustainabilitychallenges(Tukker,2005).However,the‘radicalness’ofinnovationsisdependentontheactorspresentwithinthesystem,thelearningthatoccurs,andbehaviouralchanges,whichareattributedtotheprocessofsysteminnovationduringwhichnewknowledgeislearntandexplored,whileoldknowledgeundergoescreativedestruction(vonMalmborg,2007).Figure3.5isanidealizedimagethatdemonstratesthedifferencebetweenincrementalinnovations,whichhavebeendescribedaboveastechnologicalimprovements,andsystemsinnovation.Changesatthesystemlevelofferthemosteffectivewaytoachievedecoupling(Vollenbroek,2002).

Figure 3.4. Conceptual model of innovations

Source: Weterings et al., 1997

Improvement in environmental efficiency

Factor 10 –

5

Factor 5 –

Factor 2 –

System innovation = new system

Partial system redesign

System optimisation

10 15 20 Time horizonYears


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Ifgrowthanddevelopmentaredependentonthecapacityforinnovation,whataretheimplicationsfordevelopingcountriesthatclearlylagbehinddevelopedeconomieswhenitcomestoscientificandtechnologicalcapacity?Manyeconomistsarepessimisticaboutthepossibilityofdevelopingcountries‘catchingup’,preciselybecausetheywillneverbeabletobridgethe‘ingenuitygap’(Homer-Dixon,2000).However,developing countries may not wish to ‘catch up’ to a level and mode of economic development which is now regarded as ecologically unsustainable.Ifitisrecognizedthatdevelopmentisaboutacceleratingthespreadofsustainableeconomicalternatives,aredevelopingcountriesstillatadisadvantage?FollowingMontalvo(2008),developing economies actually may have an advantage over developed economies concerning eco-innovations inthefollowingrespects:firmsindevelopingcountriesdonotalwaysfacethepowerofentrenchedfinancialinterestsvestedintechnologicalparadigms;newtechnologiesindevelopingcountriesmayhavemoreregulatoryspacetoflourish;inmanydevelopingcountriesinvestmentin

fixedinfrastructureshasonlyjustbegunwhichprovidesspaceforinnovationthatdoesnotexistincountrieswhereexistinginfrastructuresareasunkcostanddifficulttochange;andmarketsindevelopingcountriesmaynotbesaturatedormatureandcan,therefore,bemouldedtoadapttonewkindsofconsumerbehaviours.

Animportantquestionfromadecouplingpointofviewishow technological leapfrogging canenabledevelopingcountriestoskipsomeofthedirtystagesofdevelopmentexperiencedbyindustrializedcountries(SauterandWatson,2008).Forexample,manydevelopingcountrieshavepartlyskippedlandlinephonesystemsinfavourofmobilephonesystems.Acrucialconditionforleapfroggingisthatanationpossessesasufficientlevelofabsorptivecapacity(thatis,theabilitytoadoptnewtechnologies).Thiscapacityincludestechnologicalcapabilities,knowledgeandskillsaswellassupportiveinstitutions.Astrongroleforgovernmentmaybeneeded.Forexample“leapfroggingintheKoreansteelandautomobileindustrieswasenabledby

x

2

4

2000 1970 2030

Figure 3.5. System innovation

a At time of publicationSource: Vollenbroek, 2002

Improvement in eco-efficiency Factor

X –

1970 20302000

4 –

2 –

System innovation

Presenta

Transition

Existing technologies


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investmentsintechnologicalcapabilitiesinthecountriesconcerned.Thiswasenhancedbyabalancedandcoherentpolicymixofeconomic,industrialandR&Dpolicies”(SauterandWatson,2008,p.2).ThesuccessoftheIndianandChinesewindindustriesowedagreatdealtothebenefitsofincentivesforthedeploymentofwindtechnology.Inthesecountries,internationalmarketcreationwasalliedwiththedevelopmentofdomesticwindmanufacturingindustries.This,inturn,wasenabledbyaccesstoexternalknowledgeandthecreationof

knowledgenetworks.1Thislastcasereflectsonlyapartialleapfrogging,asthemajorityofthepowergenerationinvestmentsarestillincoaltechnologyinthesecountries.

Thedifficultieswithleapfroggingmaybegenerallyunderestimated.“Tobeginwithitisfarfromclearthattheevidenceofthefirst-tierAsiannewlyindustrializingcountriescanbereplicatedindevelopingcountriestoday.Foronething,the

1 Based on http://www.dfid.gov.uk/Documents/publications/DFIDLeapfroggingReportWeb.pdf

Summary of a theory of socio-technical transition to sustainable development

A multi-level-perspective (MLP) provides a framework for “...understanding sustainability transitions that provide an overall view of the multi-dimensional complexity of changes in socio-technical systems” (Geels, 2010, p.495). The MLP is a three-tiered framework which consists of the landscape (macro), regime (meso) and niche (micro) levels.

The socio-technical landscape, or macro level, is considered as an external factor and it provides the greater structure for activities in a system. As it is external, it is out of the control of actors within the system and thus cannot be changed according to preference and is in relatively stable condition, adapting slowly according to indirect adjustments at a lower level. But the landscape by nature is unpredictable, responding to variations in macro-economic, environmental and social conditions (Tukker, 2005).

At the micro level are socio-technical niches, isolated protected pockets where creation, development and testing of radical novelties and innovations take place. These novelties are learning experiments that respond to changes or demands at both the meso and macro levels; while the isolation provides a mechanism for protection against other market products, niches are the starting points for change (Geels, 2002; Geels & Schot, 2007). Furthermore, niche innovations usually occur within a small network of actors who provide the financial and technical support for their realization.

The meso level, or socio-technical regime, represents the existing configuration of institutions, rules, culture and techniques, forming the set of practices, exhibiting dynamic stability carried out by social groups (Geels, 2002).

This stability is reinforced by the consistent reference to a particular regime – whether it is science, technology, economics, politics or culture – identified according to its function, which hampers the introduction of niche innovations. Geels and Schot (2007) argue that the meso level is deeply embedded within the ‘cognitive routines’ of engineers, policy makers, the private sector and even academic institutions, consequently inhibiting the entry of radical innovations onto the market.

Through the interaction of its three embedded interconnected and interdependent components, the MLP allows for the emergence of socio-technical transitions. Changes at the macro and micro levels exert pressure on the socio-technical regime, which can lead to a transition. At the micro level, small networks developing radical innovations exert upward pressure through a build up of internal momentum which weakens the barrier of the regime level; eventually ‘breaking through’ when sufficient and simultaneous pressure has been exerted from the macro level. This breakthrough or ‘window of opportunity’ is created via the mutual tension from the macro and micro levels which destabilize the particular socio-technical regime, allowing competition between new and existing regimes, be it technological, cultural, political, economic or scientific. These changes have the capacity to influence or change the landscape level, while the landscape and regime levels directly affect or influence the niche innovation level. While numerous radical innovations are necessary to resolve the ecological crisis, technological transitions occur via step by step processes as opposed to radical regime changes. Various niche innovations, when connected, can thereby accrue to a system transition.


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developmentsuccessofthefirstgenerationofAsiantigerswaspredicatedonanumberofcountry-specificcharacteristics(competent,goal-directedandinsulatedbureaucracies,etc.)notfoundinmanyotherpartsofAsia,AfricaandLatinAmerica.Foranother,manyofthestateinterventions(tradeprotection,subsidies,procurement,etc.)thatwereusedtopromotelocalindustrialdevelopmentinthepastarenolongeravailabletodevelopingcountriesundertoday’sinternationaltradeandinvestmentrules”(Perkins,2003,p.181)

Forleapfrogging,Perkinssuggests:

• Clearerandmorespecificdefinitionofwhatitistobe‘leapfrogged’;

• Targetingprioritysectorsforinvestment;

• Supportingthedevelopmentofleapfroggingcapabilitiesandtechnologies;and

• Promotingcooperativepartnershipsbetweenkeyactors.

Inconclusion,overthepasttwodecadesmuchhasbeenlearnedaboutthedynamicsoftheinnovationprocess.Investmentsininnovations,however,havebeenmotivatedprimarilybythedesiretoaccelerategrowth,withlittleattentionpaidtovariousdimensionsofdecoupling(althoughimpactdecouplinghasreceivedalotmoreattentionthanresourcedecoupling).Thechallengeistoapplytheinsightsaboutinnovationtoresourceproductivity.Sustainability-orientedinnovationsholdthekeytodecouplingasapracticalframeworkforaction.Inthisregard,developingcountriesmayenjoyastrategicadvantagebecausetheydonotfacethesamemarketandinstitutionalrigiditiesthatstemfromadependenceontechnologicalandphysicalinfrastructuresthatarerapidlybecomingobsoleteasmoreecologicalthresholdsarebreached.

3.3 Cities as spaces for innovation and decoupling

Citieshavehistoricallybeencentresofpolitical,economic,culturalandinformationalpower.Asof2007,over50%ofpeopleliveincities(UnitedNations,2006);yetcitiesoccupyonly2%oflandsurface.Neverthelesstheyconsumethreequartersofallnaturalresourcesandin2006accountedfor71%oftheworld’senergy-relatedCO2,withtransport,industryandbuildingsectorsbeingthelargestcontributors.Thissharewillrisetoabout76%by2030asurbanizationcontinues(IEA,2008).2

Astheworld’spopulationgrowsfromthecurrent6.8billionpeople(2010estimate)to8billionby2030,andperhapsatleast9billionby2050(UnitedNations,2004b),citieswillmostlikelybecomethehomefortheadditional2to3billionpeopleofthefutureworldpopulation.Thisisdrivingwhatiscalledthe‘secondurbanizationwave’.Whereasthe‘firsturbanizationwave’fromthemid-1800stothemid-1900sinvolvedtheurbanizationofonlyabout400millionpeoplemainlyinEuropeandNorthAmerica,thenext2billionpeoplewhowillbelivingonEartharemostlikelytobelivinginAsianandAfricancities(UnitedNations,2006).However,thebulkofthisexpansionwillbeinsecondaryandtertiarycities,nottheexistingsprawlingmega-citieslikeCairo,Calcutta,Mumbai,Shanghai,SanPaulo,Seoul,Dhaka,Karachi,BuenosAiresandManila(NationalResearchCouncil,2003).Ithasbeenprojectedthatby 2015 nearly 60% of the total urban population will be living in cities of less than a million people.

Theglobalnetworksofprimaryandsecondarycitieshavebecomethelocalesofmassivepopulationconcentrationsduetofactorssuchasglobalization,resourceefficiency,improvedinfrastructure,economicopportunities,andtheinformation

2 International Energy Agency (IEA) (2008): World Energy Outlook 2008


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andcommunicationtechnology(ICT)revolution.Theglobaleconomyisnoworganizedintointenselyconcentratedclustersofeconomicactivitiesthataredispersedacrossanetworkedsetofcitiesacrosstheglobe,eachofwhichhasaplaceinthenewinternationaldivisionoflabourcreatedbyglobalization.Computerizationmadeitpossibletosetupthecoordinationandlogisticalsystemsforthesegloballynetworkedactivities,attractingmillionsforjobs,education,shelter,protection,culturalassimilation,andaccesstoinformation.Unsurprisingly,levelsofurbanization

correlatewithrisinglevelsofGDPpercapita(Figure3.6).Inequality,however,ispervasive–1in3urbandwellersintheworldtodayliveinslums(UnitedNationsCentreforHumanSettlements,2003).

The‘secondurbanizationwave’inthedevelopingworldplustherisesincethe1980swithindevelopedcountrycitiesofthepropertydevelopmentindustryasakeydriverofgrowth(ascheapcreditwasusedtofuelconsumptionofimportedgoodssecuritizedagainstproperty),helpsexplainwhytheextractionofindustrialand

Figure 3.6. The relation between urbanization level (%) and Gross National Income (GNI)

Algeria

Botswana

Burundi

Egypt Equatorial Guinea

Ethiopia

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Kenya

Libya

Mauritius

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Rwanda

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Japan

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Germany

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Urbanization levelPercent of total population living in urban areas

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constructionmineralsincreasedby40%(Behrensetal.,2007).TheconstructionindustryworldwideisaUS$4.2+trillionglobalindustry,isresponsiblefor10%ofglobalGDP,employsover100millionpeople,andconsumesaround50%ofresources,45%ofglobalenergy(5%duringconstruction),40%ofwaterand70%ofalltimberproducts(VanWyk,2007).

Justascountrieshavemetabolicrates,sodocities.Citiesusuallyhavealowermetabolicratethanthecountryside,astheyrelyuponperipheralareasforhighlyenergy-andmaterially-intensiveservicessuchasrawmaterialextraction.Asageneralrule,astheGDPpercapitaincreases,themetabolicrateofthecityincreases.Atthesametime,citiesconcentratelargenumbersofpeopleintosmallplaces,andtheyalsoconcentratetheknowledge,financial,socialandinstitutionalresourcesrequiredforsustainability-orientedinnovations.Thiscapturesthedilemmaofcitiesforsustainability:theydrivetheglobalunsustainableuseofresources,buttheyarealsowherethegreatestpotentialexistsforsustainability-orientedinnovations.

Judgingfromareviewoftheliterature,dailyreportsfromcitiesaroundtheworldandtheproliferationofwebsitesaboutsustainablecitiesandneighbourhoods,urbaninfrastructurecouldbecomeoneoftheprimaryfocusesofsustainability-orientedinnovationsaroundtheworld,inparticularwhereenergyuse,mobilityandthewatercycle(sources,usesandreuses)areconcerned.Anewacademicliteratureisemergingthataddressesurbaninfrastructurefromasustainabilityperspectivebyexaminingthemetabolicflowsthatareconditionedbythewiderangeofextremelycomplex‘socio-technical’and‘socio-ecological’networksthatmediatetheseflows(Guyetal.,2001;Graham&Marvin,2001;Heynenetal.,2006;Pieterse,2008).Lowcarbonandevenzero-carbonsustainablecitiesarebeingplanned,forexampletheZero

EmissionCityplannedinBoughzoul,AlgeriaorinDongtanonChongmingIslandoffShanghai,MasdarinAbuDhabi,SongdoinSouthKoreaandTreasureIslandinSanFranciscoBay.Whilethesearecapital-intensive,theymaybepioneersforfuturedecoupling.

Ithasbeenestimatedthattheurbaninfrastructureoftheworld’scitiesoverthenext20yearswillrequireUS$41trillionforinvestmentsinurbaninfrastructure,includingUS$22.6trilliononwaterandsanitation,US$9trilliononenergy,US$7.8trilliononroadandrailservices,andUS$1.6trilliononair/seaports.Thisrepresentsanopportunityforsustainabilityas“...citiesthatignoreenvironmentalimpactwillthemselvesfaceanothercollapseofinfrastructure30or40yearsfromnow...”(Doshietal.,2007).

Worldwidenetworksofcitiesfocusattentionontheneedforlocalauthoritiestofindwaysofreducingtheirmetabolicrates.ProminentexamplesofinternationallocalgovernmentassociationsincludeICLEI–LocalGovernmentsforSustainabilityandUnitedCitiesandLocalGovernments(UCLG)withmembercitiesfromacrosstheglobe.Inaddition,theC40CitiesClimateLeadershipGroup,whichlists45majorcitiesasaffiliates,including22fromdevelopingcountries,buildslocalgovernmentcoalitionstofightclimatechange.Buildingontheprivatizedurbaninfrastructuresthathavebeenbuiltupoverthepast25years,thegloballeagueofLargeCitiesenvisagesinvestmentsinnewformsofurbanismthatwilldifferradicallyfromthepast,includingsustainabletransportation,reduceddependenceonfossilfuels,increaseddependenceonlocallygrownfoodandlocalizedsupplyof(recycled)water,compacturbanformandmuchhigherdensities,integratedlivingandworkingneighbourhoods,zerowastesystems,cleanerproduction,andresponsibleecologicallysustainableconsumption.Inconclusion,innovationsformoresustainableuseofresourcesarealready


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underwayintheworld’scities.Itmaybetimetotransformtheconceptofdecouplingintoanoperationaltoolthatwillhelpcitiestodeterminetheirmetabolicratesandthepotentialofdifferentinterventionstoreducetheseratesovertime.

3.4 Experiences and lessons from the country case studies

ThissectiondrawslessonsfromthecasestudiescontainedinChapters6to9ofthisreport.ThesecasestudiesofChina,Germany,JapanandSouthAfricawerewrittenbyPanelmembers(orbyateamcommissionedbyaPanelmember)duringthecourseof2008.Politicalconditionshavesincemovedonineachcountrybuttheoverallpolicytrendtowarddecouplinghasnotshiftedfundamentally.Theselectionofcaseswasbasedontheirapproachestodecouplingandwasnotintendedtoberepresentativeofthediverseglobalcontexts,lacking,forexample,astudyofalargelow-densitydevelopedeconomy(e.g.USAorAustralia)orofalargelow-densitydevelopingeconomysuchasBrazil.Nevertheless,thefourcasestudiesdemonstrateatcountrylevelemergingresponsestoresourcedepletionandenvironmentalimpacts.Thissuggeststhatmoredetailedandthoroughcountrycasestudiesthatarerepresentativeofthedifferentglobalcontextscouldbeausefultopicforfutureresearch.

Thecasestudiesrevealthatgovernmentsinthesecountriesarerespondingtothethreatofrisingpricesofresourcesthatareatleastpartlycausedbyresourcedepletion.Althoughnoneofthecountrieshavefully-fledgedintegratedpolicyframeworksforachievingcomprehensiveresourceandimpactdecoupling,significantempiricaltrendsandthekeyelementsforcomprehensivepoliciesthatcouldresultinmoresustainableuseofresourcesareinmanywaysalreadyinplaceacrossthese

verydiversecontexts.Threethemeswereusedtostructurethecasestudies:

• whetherrisingpricesofresourceshavebeenrecognizedeitherdirectlyorindirectly;

• howpolicyresponsestobothresourcedepletionandnegativeenvironmentalimpactshaveevolvedovertime;and

• whatevidenceindicatesconcernsforresourceandimpactdecoupling,bothempiricallyandatthelevelofpolicyintent.

GermanyandJapanareadvancedhigh-densityindustrialeconomiesthataredependentonexternalsourcesofmaterialsandmarketsfortheirproducts.Chinaisalargerapidly-industrializinghigh-densitydevelopingeconomythatisbothamassiveresourceimporterandgoodsexporterasithasevolvedintotheworld’smanufacturer.SouthAfricaisasmallfairlylow-densityindustrializingdevelopingeconomythatisheavilydependentonexportsofprimaryresources.

Thecasestudiesindicatethattherising economic and environmental costs of resource depletion and negative environmental impacts have affected the economic growth and development trajectories of these countries. Significantly,allfourcountrieshaverespondedbyadoptingpolicies(ofvaryingdegreesofefficacy)thatcommittherespectivegovernmentsandindustryplayerstosomeformofresourceusereductionandimpactdecoupling.Thelanguageofresourceefficiency,resourceproductivity,dematerialization,andmaterialflowshasclearlyenteredmainstreampolicylanguageinthesecountries,andmostlikelymanyothers,inwaysthatreflectaverydiverseunderstandingofwhatdecouplingmeansinpractice.Theseideasareevolvinginnationally-specificwaysthatmakecross-countrycomparisonsdifficult.


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3.4.1 Recognizing resource depletion and negative impacts

All four countries have been responding to the particular manifestations of resource depletion–inthecaseofJapanandGermany,the1970soilshockswereclearlyimportanttriggersofpolicyandscientifictrendsthatculminatedinmorematureperspectivesbythelate1990s.Althoughpolicyresponsesintheseinitialdecadesweretonegativeenvironmentalimpacts,thebriefconcernafter1973withoilpricesandsecurityofsupplydidtriggerresponsesthatwereconcernedwithresourceinputsintotheeconomy.Onlyafterthe2002WorldSummitonSustainableDevelopmentinJohannesburgdidChinaandSouthAfricastarttakingresourcedepletionmoreseriously(atleastatthepolicylevel).

InthecaseofGermany,policychangesthatcanbetracedbacktothelate1970sculminatedintheadoptionoftheNational

StrategyforSustainableDevelopment(NSSD)in2002.Itsaimwastopromotethedoublingof‘resourceproductivity’by2010.Althoughpoliciesinthe1970sand1980sfocusedontheenvironmentalimpactsofindustrialgrowth,inparticularonair,waterandsoil,bythelate1990sthefocuswasonresourceproductivity.Germanyhasclearlyunderstoodthatresourceproductivitymakeseconomicsense,anditprovidesthestrategicframeworkforinvestmentsintechnologicalinnovationandcapacitythatcouldrepositionGermanywithinaglobaleconomyfacingresourcedepletion.Forexample,DESERTEC,aprojectdrivenbyagroupofGermantechnologycompanies,isamassivesolarpowerplantplannedfortheSaharaDeserttosupplyEuropewithgreenenergy.

South Africa’sConstitutioncarriestheinjunctionthatthestatemustensure“…ecologicallysustainabledevelopmentanduseofnaturalresourceswhilepromotingjustifiableeconomicandsocial

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development”(Section24(b)).Thisprovidedthebasisfordecisionsin2008bythegovernmenttoadopttwokeypolicydocuments:theNationalFrameworkforSustainableDevelopmentwhichcallsspecificallyfor‘resourceandimpactdecoupling’;andtheLong-TermMitigationScenario(LTMS)whichenvisagesGHGemissionscutsof30–40%by2050.Thesecanbeseenasadirectresponsetoalonghistoryofhighlyunsustainableresourceuse.Butreversingthisdependenceontheso-called‘mineral-energycomplex’willnotbeeasy.Sincethebirthofdemocracyin1994,SouthAfricahasbeenaresource-richresource-exportingdevelopingcountryeconomythatisheavilydependentonitsvastsupplyofcheapcoal;earnsthebulkofitsexternalrevenuesfromprimaryresourceexports(oftenatpricesbelowtherealcostofnaturalcapital);sufferedthedeclineofmanufacturingasitliberalizeditscapitalmarketsandreducedtariffbarriers;pursuedgrowthbystimulatingconsumerdemand(foranincreasingnumberofimportedproducts)witheasycredit;andthensufferedtheconsequenceswhencommoditypricescollapsedwhenthefinancialcrisishitin2007/2008.However,thedomesticeconomybecamemarginallymoreresourceproductiveoverthepasttwodecades,showingsomeresourcedecoupling.Onlysince2007hasthegovernmentbeguntorealizethatduetoabundantcheapcoal,thecarbonintensity(CO2emissionsperunitofGDP)ofSouthAfrica’seconomyisthehighestintheworld(0.99)anditsemissionspercapitaare9.8tons,doubletheworldaverageandsimilartodevelopedhighdensitycountriesliketheUKandGermany.

In2003 ChinaadoptedaScientificOutlookofDevelopmentasitsprimaryphilosophyandguidingprincipleofdevelopmentandin2007committeditselftothebuildingofan‘ecologicalcivilization’.Thisover-archingpoliticalvisioninformedthedetailedcommitmentstomandatorytargetssuchasenergyconservation,pollutionabatementandthe‘circular

economy’inthe11thFiveYearPlan.ThiswasindirectresponsetoChina’sincreasingconcernsabouttheconsequencesofrapidindustrializationandurbanizationinacountrywithaweaknaturalresourcebaseandincreasinglypollutedanddegradedecosystems.Calculatedincontemporarypricesandcurrentexchangerates,3overthe30yearsfrom1978to2008,China’sGDPexpandedbyanannualaverageof9.8%toUS$4.4trillion.Thisgrowthhasbeennon-linearandfeaturesanacceleratedrateofgrowthinlateryearsaccompaniedbymassiveemissionsofpollutants.Accordingtosomecalculations(whichChinaquestions),Chinaisnowtheworld’slargestCO2emitter(althoughstilloneofthelowestwhenmeasuredintermsofCO2percapita).ItmayalsotoptheworldinSO2emissionsandchemicaloxygendemand(COD)discharge.CODdischargeinChinahasexceededtheenvironmentalbearingcapacityby80%andthepictureofSO2emissionissimilarlygrave.Ontheresourceinputside,whatChineseresearchersrefertoasthe‘resourceintensity4perunitofGDP’isabout90%higherthantheworldaverage,whileenergyefficiencyis10%belowthatofthedevelopedworld.TheChinesegovernmentacknowledgesthattheenvironmentalcostsofeconomicgrowthhavebeenexcessive.

Chinahasbecomeanetexporterofenergy(energyexpendedinproducingaprocessedcommodity).TheChinaCouncilforInternationalCooperationonEnvironmentandDevelopment(CCICED)estimatedthat,from2002to2006,China’snetexportofembodiedenergyjumpedfrom240milliontons(240Mt)ofstandardcoalequivalent(TCE)to630milliontons(630Mt),andtheproportionofexportedembodiedenergyinChina’soverallprimaryenergyconsumptionincreasedfrom16%to26%.

3 US$1 against RMB 6.8337 in February 2009.4 Including freshwater, primary energy, steel, cement and common

non-ferrous metals.


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Japanhasexplicitlyrecognizedtheneedforsystemchangesthatrespondtorisingcoststhatarederiveddirectlyandindirectlyfromresourcedepletion.Inresponsetothe1998annualQualityoftheEnvironmentreport,whichwasthecleareststatementoftheresourcerisksJapanfacedbythen,JapanadopteditsSoundMaterialCycleSocietypolicyframework.TheJapaneseeconomyishighlydependentonimportsofnaturalresources,suchasenergy,foodandotherrawmaterials.Thisgeopoliticalfactmeansthatitsuseofprimarymaterialsistoalargeextentseparatedfromtheenvironmentalimpactsatthepointoftheirextraction.YetJapanisfacingseriousproblemsassociatedwithitsincreasingvolumeofsolidwastes,suchasshortageofdisposalsites,riskofenvironmentalpollutionbywastetreatmentfacilities,illegaldumping,andrisingcostsofwaste.Inadditiontothechallengeofwastedisposal,the1973and1979oilshockstriggeredchangesthatresultedinsignificantlevelsofdecouplingbetweenenergyconsumptionandeconomicproductionbymanufacturingindustriesduringthelate1970stoearly1980s.Whileoildependencyofnationalprimaryenergysupplyhasdecreasedgraduallytolessthan50%,itisstillhigherthanotherdevelopedeconomies.

Inshort,thegovernmentsofallfourcountrieshaveexperiencedthelong-termconsequencesofresourcedepletionandnegativeenvironmentalimpacts,andrespondedbyadoptingpoliciesthatincludedecoupling.

3.4.2 Policy responsesIncrudeterms,policymakingwithrespecttoresourceuseandenvironmentalimpactsoverthepastfourdecadeshasgraduallyshiftedfroma‘command-and-control’focusonnegativeenvironmentalimpacts(especiallypollution)toresponsestoresourcedepletionchallengesthatuseeconomicinstruments.Thishastakenplaceagainstabackgroundofrapidglobalgrowthaseconomicglobalization

facilitatedtherelocationofkeymanufacturingsectorsfromdevelopedtodevelopingcountries.Theresultantincreaseinmaterialflowsfrom40to55billiontons(40–55Gt)peryearoverthetwodecadesstartingin1980explainsinpartwhyresourcedepletionissueshavebecomeaconcernofpolicymakersatnationalgovernmentlevel.

TheGermanNSSDcomprisesstrategic,mostlyquantitative,trendobjectivesandasetof21indicatorsgroupedunderdifferentheadings.Indicator1(‘resourceconservation’)isthemostimportantoneforthepurposesofthisReport,asitincludessub-indicators1a‘energyproductivity’and1b‘resourceproductivity’.TheNSSDgoalistodoublebothenergyproductivity(baseyear1990)andresourceproductivity(baseyear1994)by2020.Thesegoalswereaffirmedbythegovernmentafter2005andcannowbeconsideredasthecornerstoneofthegovernment’spositiononresourceuse.WiththeIntegratedEnergyandClimateProgramme(IECP,2007/2008)theGermangovernmentreinforcedtheNSSDbyadoptingtwodozenpoliciesandmeasureswhosecollectiveaimby2020istoraisetheshareofrenewablesasapercentageoftotalsupplyofelectricityto30%,forheatto14%,theshareofCombinedHeatPower(CHP)forelectricityto25%andtosaveenergyinallsectorsviasubstantialenergyefficiencyinterventions.WiththehelpoftheIECPandadditionalmeasuresitisexpectedtoreachatleasta30%CO2-reductionby2020.

South Africa’skeymacro-economicpolicyframeworks(AcceleratedandSharedGrowthInitiativeforSouthAfricaandNationalIndustrialPolicyFramework)donotrecognizeresourceconstraintsasaneconomicfactor,althoughtheSouthAfricanscientificcommunityhasreachedalmostcompleteconsensusthatresourcedepletionisanurgentprioritywhenitcomestowaterandsoil,whilerelativedecouplingisneededwithrespectto


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energyandawiderangeofenvironmentalimpacts.Theviewsofthescientificcommunitywerereflectedinthe2008NationalFrameworkforSustainableDevelopment(NFSD),thefirstofficialpolicysincedemocracywasintroducedthatarguedfor‘dematerialization’andthe‘decoupling’ofratesofresourceusefromeconomicgrowthrates.TheNFSDproposedfivestrategies:enhancingsystemsforintegratedplanningandimplementation;sustainingecosystemsandusingresourcessustainably;investinginsustainableeconomicdevelopmentandinfrastructure;creatingsustainablehumansettlements;andrespondingappropriatelytoemerginghumandevelopment,economicandenvironmentalchallenges.Duringthecourseof2010,theNFSDwastransformedintoamorecomprehensiveNationalStrategyforSustainableDevelopment.

SupportforthisstrategicperspectivehascomeprimarilyfromtheNationalTreasuryandtheMinisterofFinancewhohasrecognizedthatSouthAfricamustkeepupwithglobaltrends.InApril2006theNationalTreasurycirculatedforcommentitsFrameworkforConsideringMarket-BasedInstrumentstoSupportEnvironmentalFiscalReforminSouthAfrica.Asthetitleimplies,thisreportrecommendsusingeconomicratherthancommand-and-controlinstruments,includingagradualistapproachofsmallsteadily-risingtaxesonawiderangeofwhatitcalled‘environmentalbads’.However,itisprobablyfairtosaythatcomparedtotheotherthreecountriesstudied,SouthAfricahastheleastdevelopedpolicyandregulatoryframeworkforlinkingeconomicpolicytoresourcereductionandmitigationofnegativeenvironmentalimpacts.

SincetheadoptionofitsScientificOutlookofDevelopmentin2003,theChinesegovernmenthasfundamentallyaltereditsdevelopmentphilosophy,resultinginthemovetowardsbuildingan‘ecological

civilization’.Thisapproachmaderesourceandenvironmentalconcernstoppolicypriorities.The11thFive-YearPlanforEconomicandSocialDevelopment(2006–2010)markedakeyturningpointfortheprocessofreconcilingrapidindustrializationwiththeambitiontobuildanecologicalcivilization.Theplansets22quantitativeindicatorsofwhicheightaremandatorytargets,fiveofthemrelatedtoenvironmentandresources.Themostchallengingtargetsarea20%reductionofGDPenergyintensityanda10%dropofSO2emissionandCODdischargeby2010(from2005levels).Toensureachievementofthesetargets,theStateCouncilofChinaestablishedtheLeadingGrouponEnergyConservationandPollutionReductionaswellasClimateChange,headedbyPremierWenJiabao,andissuedtheActionPlanforEnergyConservationandPollutionReduction.Anintensiveprogrammewaslaunchedacrossthecountry,andsignificantprogresshasbeenmade.

Since2006,ChinahasrunnationwidemandatoryenergysavingandpollutionreductionprogrammestoaddresswhatChineseresearchersrefertoas‘lowresourceefficiency’and‘highpollutionlevels’.Theso-called‘circulareconomy’strategieswereimplementedtoaddressthelinearprocessfromprimaryresourcestoproductsandfurthertopost-consumptionwastes.Inadditiontothekey‘circulareconomy’policiessuchastheLawonCircularEconomyPromotion,othermeasuresincludedtheLawonCleanerProductionPromotion,managementandtaxationpoliciesforcomprehensiveutilizationofwastesandusedresources;AssessmentStandardstoevaluateeco-industrialparksandsetoutcodesfortheirestablishment;greenprocurementbygovernmentalagenciesandpublicinstitutions;andinvestmentpoliciesforpilotingthecirculareconomy,includingaspecialfundtosupportpilotprojects.

Inrespondingtoclimatechange,theNationalActionPlanonClimateChange


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wasintroducedin2007andatargetofreducing40–45%inCO2emissionperunitofGDPby2020against2005levelswassetbytheChineseGovernmentin2009.Intheprocessofcopingwiththeglobalfinancialcrisis,initiativestoimplementthegreeneconomyandlowcarboneconomyapproacheshavebeenemergingnationwide.

Chinais,inmanyways,thetestcasefortheglobaleconomy.BecauseofChina’sdominanteconomicposition,andbecauseitwantstocontinueitsrapideconomicgrowthbutuseresourcesmoresustainably,themeasuresthatChinaintroducestoreconciletheseobjectiveswillbeofcrucialsignificanceforeveryotherdevelopingcountrywithsimilarpolicyintentions.

In2007theJapanesegovernmentadoptedapolicythatcommittedJapantobecominga‘SustainableSociety’.5ItproposestobuildaSustainableSocietythroughcomprehensivemeasuresintegratingthethreeaspectsofsuchasociety,specifically,aLowCarbonSociety,aSoundMaterial-CycleSocietyandaSocietyinHarmonywithNature.Thisdecisionbothconsolidatesalongperiodofsectoralpolicydevelopment,andsetsthestageforintegratedplanninginthefuture.ThefoundationswerelaidwhentheBasicEnvironmentLawwasadoptedin1993followedbyadoptionoftheBasicEnvironmentPlaninDecember1994.TheSoundMaterialCycleSociety(SMC)conceptiscentraltotheJapaneseapproachandisfirmlyrootedin3Rprinciples.6Asaresult,materialflowaccounts(MFA)havebecomeanintegralfeatureofJapaneseenvironmentalpolicy,identifyingthewholesystemofmaterialflowsinthenationaleconomyandprovidingitemizedoverviewsforsuchflows.

AFundamentalLawforEstablishingaSoundMaterialCycleSocietyhasbeenin

5 See www.env.go.jp/en/focus/070606.html6 Reduce, reuse and recyle.

placesince2000.The1stFundamentalPlanforEstablishingaSoundMaterialCycleSocietywasadoptedbythecabinetin2003,andarevised2ndPlanwasadoptedin2008.TheselegalinstrumentsprovidethefundamentalframeworktointegrateenvironmentallysoundmanagementofwastesandefficientuseofnaturalresourcesintoJapan’smainstreameconomicprocesses.

MuchcanbelearnedfromwhatJapanhasachievedbecausetheseinstrumentsareprobablythemostadvancedexamplesofmeasuresaimedatincreasingresourceproductivityandminimizingnegativeenvironmentalimpactsinpractice.

Ascanbeseenfromthisreview,decouplingeconomicgrowthfromnegativeenvironmentalimpactsandpromotingresourceproductivityhavefoundaplaceinthepolicyagendaofallfourcountries.Theyhaveadoptedpoliciesthatcallfortheintegrationofeconomicandsustainabledevelopmentpolicies.Althoughmuchmoredifficulttoachieveinpractice,thefactthatconsensushasbeenreachedonwhatisneededisofgreatsignificance.AllfouraremembersoftheG-20,thussuggestingthattheG-20statementbelowwasmorethanjustanotherglobalstatementofgoodintent,butwasrootedintheevolutionofpolicythinkingatnationalgovernmentlevel:

“Wewillmakethetransitiontowardsclean,innovative,resourceefficient,lowcarbontechnologiesandinfrastructure.”StatementoftheG-20,London,2April2009

Toensurethediffusionoflearning,itwillbeessentialtomonitorthesepolicyframeworks,howtheyareimplemented,andtheiroutcomesandimpacts.

3.4.3 DecouplingAlthoughdecouplingasdefinedinthisReportisalong-termprocessofmacro-structuraltransformationtobuild


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sustainablesocioecologicalsystems,thetrendsatcountrylevelthatemergefromthecasestudiesconfirmthatrelativedecouplingwithrespecttoresourceuseisalreadyunderwayindevelopedeconomies.Resource use reductions will be much more difficult but are, ultimately, what really is needed most.However,thekeyfactorthatwilldeterminewhetherthishappenswillbethedegreeofinvestmentininnovationsformoresustainableuseofresources.Akeydriverherewillbewhetherpricesofcriticalresourcesriseinresponsetoresourcedepletion.

EmpiricalevidencefromtheGermancontextsuggeststhatbetween1994and2007aseeminglyimpressivelevelofresource decoupling7occurredinGermany.Whileresourceproductivity(rawmaterial)roseby35.4%andGDPby22.3%,rawmaterialinputdecreasedby9.7%.However,thesefiguresdonotincludebioticresourceflows(thatmayincreasingly

7 This includes all used abiotic raw material extracted in Germany as well as imported abiotic materials.

replaceabioticresourcessuchasfossilfuels),domesticunusedprimarymaterialextraction,andthevariousenvironmentalimpactsembodiedinimportedmaterialsandgoods.Ifthesearefactoredin,Germany’sachievementsmightbesomewhatlessimpressive.

AmacroeconomicanalysisforGermanindustrydemonstratesthatevenifonlyhalfoftheexisting‘resourceefficiency’targetswererealized,therewouldstillbeanincreaseingrossnationalproduct,creationofnewbusinessareasandgrowthinemploymentlevels.Thesemacroeconomiceffectsseemtojustifyalong-termmodernizationandinnovationpolicyforincreasingresourceproductivityasawaytoboostgrowthandemployment.

TheWuppertalInstitutehasalsoproposedanInnovationProgrammeforResourceEfficiencytoformpartofacomprehensiveGermanefforttomitigatetheeconomiccrisis.8Byscalingupexistingexperiences

8 See Hennicke & Kristof, 2008.

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(seedetailedcasestudyinChapter6)withatotalamountof€10billionfromthefederalbudgetforthesmallandmediumenterprise(SME)sector,itsaimwouldbetofoster‘ecologicalmodernization’bycreatingnewemploymentandbusinessfieldsforGreenTech.ItwouldbeoperatedbyaleanfederalResourceAgencytogetherwithanetworkofregionalandlocalpartners.SupportforSMEswouldcompriseamixtureofimpulseandin-depthauditscombinedwithinvestmentsubsidies.

Tounderstanddecouplingtrends,aDecoupling Index (DI)isusedintheChina casestudy.Primaryenergyconsumptionappearstohavebecomemoreefficientsince1992,providingevidenceofrelativeresourcedecoupling.Inmostofthepast10years,Chinaachieveddecouplingbetweenratesofincreaseinfreshwaterconsumptionandeconomicgrowthrates;during1998–2007,totalfreshwaterconsumptionvariedwithinasmallrangebetween290.1and306.2billionm3whileGNPnearlydoubled.ButintermsofmineralconsumptionChinastillfaceshugechallenges.Forinstance,thecountry’ssteelconsumptionjumpednearlytenfoldfrom53milliontons(53Mt)in1990to520milliontons(520Mt)in2007,andsteelconsumptionperunitofGDPincreasedataratehigherthanGDPgrowth.

Ontheenvironmentalimpactside,theemission/dischargeofmanypollutantsbegantodecouplefromeconomicgrowthintheearly1990s.Since1992,industrialwastewaterdischargeandsolidwastedischargehavedecoupledinmanyyears,withtheDIofsolidwastefallingbelow–1severaltimes.Progressinthisareaowesmuchtotheimprovedrecyclingrateandproperdisposalofindustrialsolidwaste.

Followingadoptionofits11thFive-YearPlan,theChinesegovernmenthaspursuedathree-prongedstrategytoraiseenergyefficiencyandreducepollution:industrialrestructuringtoreducedependenceonresource-intensivepollutingindustries;

energyconservationprogrammesandconstructionofpollutiontreatmentfacilities;andstrengthenedenvironmentalmanagement.Bytheendof2009,theGDPenergyintensityhadreducedby15.6%,andSO2emissionsandCODdischargedroppedby13.14%and9.66%respectivelyagainst2005levels,suggestingthatChinamaybeabletoachieveitsmandatorytargetsforenergyconservationandpollutionabatementthatweresetinthe11thFive-YearPeriodby2010/2011.However,whetherthesemeasuresandachievementssufficientlysucceedincounteringtheimpactofrapidindustrializationandurbanizationremainstobeseen.

Japan’sfundamentalplanforaSustainableMaterialCycleSociety(SMC)setsanationaltargetofresourceproductivityandbindsthegovernmentitselftoachieveit,buttheplandoesnotsetbindingtargetsforindustries.Nevertheless,voluntaryeffortshavebeenmadetoincorporatethe‘FactorX’conceptintobusinesses.Forexample,asmanyaseightJapaneseleadingelectronicscompanies(Fujitsu,Hitachi,Panasonic,Mitsubishi,NEC,Sanyo,SharpandToshiba)arecollaboratingtodeveloptheguidancesystemfortheCommonFactorXapproach.

Inmanycountries,theenergyefficiencyofelectricalappliancesisenhancedbyMinimumEfficiencyPerformanceStandards(MEPS).Japanfollowedadifferentstrategy.Insteadofsettingaminimumefficiencystandard,itsTopRunnerProgrammesearchesforthemostefficientmodelonthemarketandthenstipulatesthattheefficiencyofthistoprunnermodelshouldbecomethestandardwithinacertainnumberofyears.TheTopRunnerProgrammeappliestomachineryandequipmentintheresidential,commercial,andtransportationsectors,settingtargetsbyproductcategory.

TheFundamentalPlanforEstablishingSMCSocietyadoptedaresource


52

productivityindicatorthatissimpleandeasilyunderstood,i.e.GDPdividedbyDMI(totalweightofdirectinputsofresources).Sincetheadoptionofthe1stFundamentalPlanin2003,performancehasbeenreviewedannuallybytheCentralEnvironmentalCouncilofJapan.

AsfarasSouth Africaisconcerned,someevidencesuggeststhatthedomesticeconomyisbecomingmoreresourceefficient.Thegrowthrateofdomesticextractionusedwithinthedomesticeconomyhasdecoupledfromtheeconomicgrowthrate,butthisignorestheincreaseddependenceonexportedprimaryproducts.Policiescallfordematerializationanddecouplingwithrespecttoresourceintensity,andforemissionscutswithrespecttonegativeenvironmentalimpacts.Varioussectoralresponsestobiodiversitydegradation,depletionoffisheries,pollutionofwaterresources,airpollutionandexcessivesolidwastedisposalareevident.However,SouthAfricahasnointegratedmaterialflowanalysis,norasetofindicatorsfor

measuringfutureprogress.TothisextentSouthAfricalagsfarbehindtheotherthreecountries.Overthepasttwoyearsthefocusofdiscussionhasbeenonenergyandwaterdecoupling.SouthAfrica’sbulkenergydemandhascaughtupwithsupply,andthetraditionalsolutionofbuildingmorecoal-firedpowerstationscontradictstheLong-TermMitigationScenario(whichisSouthAfrica’sstrategyforbuildingalow-carboneconomy).Thishasforcedpolicymakerstofocusonenergyefficiencyandrenewableenergysolutions.Thesameappliestowater:SouthAfricaisawater-scarcecountryandthescientificcommunityandpolicymakersagreethatnomorewaterisavailabletobeallocatedforfuturedevelopment,leavingwaterefficiencyandreuseastheonlysolution.Onepotentialnewwatersourceisdesalinationofseawater,butthisissustainableonlyifitcanbepoweredbyrenewableenergy.Likemanyotherdevelopingcountries,SouthAfricaneedstointroduceacapacityformaterialflowanalysislinkedtoasetofindicatorsforevaluatingfutureprogress.


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4.1 Trade and the distribution of resources and environmental burdens

Globaltradeoftheresourcesbeingassessedhereisacomplicatedprocess,withdifferentinfluencesatthevariousstagesofthelifecycle(describedinChapter1,section1.1.),frominitialextractionofaresourcetotheultimatedisposalofthecommodityproducedfromtheresource(thoughmanyproductscontainlargenumbersofmaterialresources,eachofwhichmayhavecomefromadifferentpartoftheglobe).Differentactors,oftenfromdistantcountries,mayplayakeyroleatthevariousstages,makingitchallengingtodeterminewhereresponsibilityfordecouplingshouldbeassigned.Furthercomplicatingthechallenge,differentpoliciesmayberequiredatdifferentstagesofthelifecycle.Ideally,everystageofthelifecycleshouldbeaccompaniedbyappropriatepoliciespromotingdecoupling,thoughthisidealremainsfarinthefuture.Thissectionwillassesssomeofthecurrentchallenges.

Globally,thegeographicdistributionofresourceextractiondoesnotnecessarilycorrespondtothegeographicdistributionofmanufacturingprocessesandconsumption,andtotheenvironmentalimpactscoupledtothesepartsofthelifecycle.Thelargestmaterialflowsoccuratthepointofextraction,andtheretheyaddmosttotheindicatorofresourceuse.Oncetherawmaterialshavebeenextractedand

becomesubjecttotrading,theyhavealreadyleftsomeoftheiroriginalvolumebehindaswastesandemissions.Generallyspeaking,inthechainfromextractiontomanufacturetosaleforconsumption,eachcommoditygainseconomicvalueasithasembodiedevermorelabourandintellectualcapitaloverthevaluechain,butatthesametimelosesphysicalweightasittravels.Thiscreatesamajorproblemforobjectiveinternationalcomparisonsofresourceproductivityanddecoupling,becausethebenefitsofinternationaltradeshiftburdensinwaysthatoftenaredifficulttounravel.Thedecouplingelementsof‘greeningofglobaltrade’warrantfurtherinvestigation.1

4.1.1 The dynamics of global trade in economic (monetary) and physical terms

Overthepastfewdecades,internationaltradehasincreaseddramatically.Between1970and2006,worldwidetradevolumesinmonetaryunits(realterms)grewbyanaverageof7.2%eachyear.Comparedwith1970,in2006thevalueoftradewasalmostafactorof10higherformanufacturedproducts,2.3timeshigherforfuelsandminingproducts,andmorethan3timeshigherforagriculturalproducts(WTO,2008).

Growingtradeinmonetarytermsreflectsanincreaseinphysicaltradeflows,albeitsomewhatdampened.In1970,around5.4billiontons(5.4Gt)wereinternationallytraded,increasingto19billiontons(19Gt)in2005.Arelativedecouplingbetween

1 The IRP is planning to produce a report on the impacts of trade on resource use and environmental impacts.

Decoupling, trade and development dynamics4

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monetaryandphysicaltradeflowshasoccurred:tradeinmanufacturedproductswithahigherpricepertonhasgrownfasterthantradeinprimarymaterials.In2005,manufacturedproductsmadeuponly24%ofphysicaltrade,butcontributed74%totheeconomicvalue(Dittrich,2009).

Atthegloballevel,physicaltradeisdominatedbyfossilfuels,whichaccountedforalmost49%ofallexportsin2005.Biomassrankedsecondwithover20%,followedbymetals(18%),minerals(10%)andotherproducts(3%)(Dittrich,2010).

Intensifyingglobaltradealsoimpliesgrowingenvironmentalpressuresassociatedwithtradeactivities.Ontheonehand,theseincludedirectpressures,inparticularduetotheimpactsoftransportation.AccordingtotheIPCC’s4thAssessmentReport,by2004thetransportsectorcontributed13.1%tothetotalCO2-eqemissions.Ontheotherhand,theindirect(orembodied)environmentalpressuresareaugmentedwithgrowingtradevolumes.Accordingtorecentmodelcalculations,CO2emissionsembodiedininternationallytradedproductsaccountedfor27%ofthetotalenergy-relatedCO2

emissionsin2005,upfrom22%in1995(Bruckneretal.,2010).OtherstudieshavecalculatedthevolumeofCO2emissionsembodiedinglobaltradeat22%fortheyear2001(PetersandHertwich,2008a).Fortheissueofwaterconsumption,measuredbythe‘waterfootprint’indicator(ameasureofthedirectandindirectuseofwatertoproduceagood),totalwaterembodiedinglobaltradewasaround16%oftheglobalwaterfootprintinthe1997to2001period(HoekstraandChapagain,2007).Firstestimationsofmaterialextractionembodiedinglobaltradeareabout20%oftotalworld-widematerialextractionintheyear2000(Giljumetal.,2008).

Environmentalpressuresdirectlyandindirectlylinkedtointernationaltradethusmakeupasignificantshareoftotalenvironmentalpressures.Therefore,

differentresultsareobtainedwhenresourceuseandenvironmentalpressuresareaccountedforfromaproductionperspective(i.e.allocationtothecountrywherethepressureoccurs)versusfromaconsumptionperspective(i.e.allocationtothecountrywheretheproductisfinallyconsumed).Inestablishedinternationalaccountingsystems(suchastheGHGaccountsintheUNFCCCframework),production-basedsystemsarefarmorecommon,particularlyastheyallowforthesettingofclearsystemboundaries.However,inordertoproperlytaketrade-relatedeffectsintoaccount,complementaryconsumption-basedaccountingsystemsarerequiredatthegloballevel(seeforexamplePeters,2008).Suchadoublesystemofaccountscouldserveastheempiricalbasisfordevelopingoptionsforsharingenvironmentalresponsibilitybetweenproducingandconsumingcountries(Lenzenetal.,2007).

4.1.2 The economic structure of global trade

Fromaneconomicperspective,theglobaltradingsystemhasfourmajorplayers.TheEU-27(excludingintra-EUtrade)isthelargestexportingregionwitha15.9%shareofglobalexportsandan18.3%shareofglobalimportsin2008.Chinarankedsecondasexporter(11.8%)andthirdasimporter(9.1%),followedbytheUS,whichhelda10.6%shareofglobalexportsanda17.4%shareofglobalimports,andbyJapanat6.5%and6.1%,respectively.Halfofthevolumeofworldtradeissharedbetweenthesefourplayers(44.8%ofworldexportsand50.9%ofworldimports,WTO,2009).

Ontheotherendofthespectrum,alargenumberof–mostlydeveloping–countriesplayanegligibleroleinglobaltrade.Some49oftheleastdevelopedcountries,mostlyinSub-SaharanAfricaandCentralAsia,togetheraccountforonly1.1%ofglobaltrade(WTO,2009).Whilesomedevelopingandemergingcountries(mostnotablyChina,butalsoBrazil,Mexico,Malaysia,andIndia)haveachievedsuccessful


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integration into the global trade system, globalization has not benefitted all countries and individuals.

The degree of economic integration into the world market is one issue, the role played in the international division of labour is another issue. A main distinction that matters needs to be drawn between mainly trading in raw materials and trading in manufactured products.

Industrialized countries largely export manufactured products. This segment of world trade is characterized by high value added, is associated with employment and has various positive spin-off effects. Many developing regions, on the other hand, continue to rely strongly on the export of primary materials. Latin America earns almost 70% of export revenues from agricultural and mineral raw materials, more than three quarters of total exports of the Middle East are fossil fuels, and Africa

has the highest share in primary products (80% of exports, consisting of agricultural products, minerals and fossil fuels, see Figure 4.1).

However, this general pattern has some important deviations, as some industrial countries, typically those with a very low population density, also play a major role as exporters of primary products. Australia, for example, has significantly expanded its primary sectors (in particular, coal and iron ore) in the past few years in order to serve growing demand in Asian countries, notably China. Some 70% of Australia’s exports in 2008/08 were primary products (food, fuels, minerals), up from 57% in 2003/04 (Australian Government, 2009). More than 47% of Canada’s exports in 2008 were agricultural products, minerals or fuels, and the US, with 21% of its exports comprising primary products, is a major world market supplier of natural resources (WTO, 2009).

Figure 4.1. Composition of exports (in monetary units) by world regions, 2006

Source: WTO, 2008

Asia

0% 100%20% 40% 60%

● Agricultural products● Minerals and fuels● Manufacturers

Europe

North America

Latin America

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4. Decoupling, trade and development dynamics

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4.1.3 The physical structure of global trade

Thetotalextractionofmaterialresourcesisnotsounevenlydistributedacrosstheworld,asbecomesapparentfromthephysicaldata(seeFigure4.2).Lookedatinmoredetail,biomassextractionisdistributedmostevenly(incloserelationtopopulationnumbers),andtheextractionoffossilfuelsisdistributedmostunevenly,dependingonresourceendowmentandpreviousexploitation.Internationaltraderedistributestheseresourcesacrosstheglobe,allowingsomecountriestoexportresourcesandothercountriestobesuppliedwithprimaryproductsformanufactureandconsumption(bothdomesticandabroad).

AsFigure4.2illustrates,industrializedcountrieshavethehighestshareintradeactivities,whiletheirshareinmaterialsextractioncorrespondsroughlytotheirshareinworldpopulation.Eveniftheyarealsoactiveexporters,theyimporttwo

thirdsofalltradedmaterials.2 Thisdifferenceisalsoreflectedwhencomparingeconomic(monetary)andphysicaltradebalances(Figure4.3).

Whilemonetarytradebalancestendtoberelativelyeven,3physicaltradebalanceshaveasystematicasymmetry:industrialcountriestendtobenetmaterialimporters,whiledevelopingcountrieshaveservedasnetexportersoverthewholetimeperiod.Duringthelastdecade,thegroupofcountrieswitheconomiesintransitionhavealsoturnedintonetexporters.In2005,theindustrialcountriesimportedaround2billiontons(2Gt),ofwhichtwothirdsoriginatedfromdevelopingcountriesandonethirdfromtheformerComeconcountries.

2 See Figure 2.1 for global material extraction, amounting to nearly 60 billion tons (60 Gt) in 2005, though the amount traded is considerably less; the precise amount is difficult to determine because an unknown amount of materials extracted are converted into manufactured goods that may also contain some imported materials.

3 Since the late 1990s the trade balance of the industrialized countries has become negative, which is due mainly to the rapidly-growing trade deficit of the US.

Source: Drawn from SEC database, http://www.uni-klu.ac.at/socec/inhalt/3812.htm, see Steinberger et al., 2010

Figure 4.2. Raw material extraction and trade by country type

Industrialized countries

0% 70%10% 20% 30%

● Domestic extraction● Exports● Imports

Transition markets

Gulf cooperation council

Least developed and developing

countries

40% 50% 60%

Newly industrialized

countries


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Figure4.4providesadetailedworldmapofnetsuppliersandnetdemandersofmaterialresources.Themapillustrates–aswastobeexpected–Europeancountries,theUSandJapantobethemostimportantnetimportersofresourcesintheworldeconomy.Whatisnewcomparedtoearlierdecadesisthatseveralemerging

economies,particularlyinAsia(suchasChina,IndiaandSouthKorea)havenowalsobecomenetimporters,augmentingdomesticresourceusewithresourcesimportedfromabroad.Importantsuppliersofmaterialresourceswithnetexportsofmorethan50milliontons(50Gt)in2005wereRussia,Kazakhstan,Indonesia,Saudi

● Industrial countries● Transformation countries● Developing countries

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Arabia,Iran,Brazil,ArgentinaandVenezuela.In some countries that specialized in natural resource exports, such as Peru and Chile, domestic material extraction grew faster than GDP, resulting in a rising material intensity of these economies, i.e. a reverse decoupling effect (seeRussietal.,2008).However,asFigure4.4shows,someindustrialcountriesareamongthegroupofnetexportingcountries,inparticularAustraliaandCanada.Asasinglecountry,Australiahasaccumulatedthehighestnetexportsinthepast40years(Dittrich,2009).

4.1.4 Indirect resource flows embodied in trade

Agrowingliteraturedealswithresourceflowsindirectlyassociatedwithtradedresourcesorcommodities.Thisisrelevanttodecouplingbotheconomically(forrespectivedomesticresourcedepletion)andintermsofenvironmentalimpacts.Standardeconomy-widematerialflowindicators,asexplainedabove,registertheweightoftradedcommoditiesatpoint

ofentryintoacountry.Indicatorsunderdevelopment(forexampleso-calledRawMaterialEquivalents(RME),asproposedbytheEuropeanStatisticalOffice(Eurostat,2001,p.22),or‘hiddenflows’–materialsthatareextractedormovedbutdonotentertheeconomy–ascalculatedintheframeworkoftheTotalMaterialRequirementindicatorseektocapturethoseindirectflowsassociatedwithtrade,bothforimportsandforexports,intermsofweight.ForEuropeancountriesforwhichsuchresearchhasbeenconducted,theresultsusuallyshowthatindirectflowsareinthesameorderofmagnitudeorsomewhatlargerthandirectflows,andthatindirectflowsassociatedwithexportsdonotfullycompensateforindirectflowsassociatedwithimports.Thus, in effect, a certain amount of material burden and the associated environmental impacts are being ‘externalized’ from importing countries to the exporting countries(Buynyetal.,2009;Schaffartziketal.,2009;WeinzettelandKovanda,2009;

Figure 4.4. Physical trade balances, year 2005a

a For countries that are blank, no appropriate data exist.Source: Dittrich and Bringezu, 2010


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Weisz,2006;Schutzetal.,2004).Theimportingcountriesbecomeresponsibleforthelaststageinthelifecycle–disposal–butcanalsorecyclethesewastesorre-exportthem,oftentodevelopingcountries.

Includingindirectflowsiscrucialforassessingdecouplingtrends.Countriesmayimprovetheirdecouplingperformancemosteasilybyoutsourcingmaterial-intensiveextractionandprocessingtoothercountriesandbyimportingtheconcentratedproductsinstead.Comprehensiveindicatorsthatincludeindirectflowsareessentialforcomparingperformanceofcountriesindecoupling(Molletal.,2005).Overthepastdecades,theseindirectflowshaveincreasedfornet-importingworldregions,suchasEurope(BringezuandBleischwitz,2009).

Suchindirectmaterialflowshavealsobeencalculatedforresource-exportingcountries.Thebiggestdifferencebetweendirecttradeflowsandtradeflowsincluding

indirectflowscanbeobservedforcountriesthatextractlargeamountsofcrudemetaloreswithlowconcentrations,butexporthighlyconcentratedores.InthecaseofChile,theworld’sbiggestexporterofcopper,thephysicaltradebalanceintheyear2003changesfromnetexportsof1milliontons(1Mt)intermsofdirectflowstonetexportsof634milliontons(634Mt),ifcalculatedincludingindirectflowsforthesameyear(Munozetal.,2009).Resource-exporting countries thus may have an interest in applying comprehensive consumption-based accounting systems that can identify costs of these indirect flows,whichmayincreasethepriceofresourcesfortheimportingcountries.Theeffectsofsuchpriceincreasesforbothexportersandimportersremaintobeseen,butmayleadtoatleastsomedecoupling.

Relatedeffortsarebeingundertakentoidentifytheamountofwaterembodiedininternationaltrade(alsocalled‘virtualwater’,theamountofwaterrequiredtoproduceagoodorservice).Theconceptof

North America

Central Africa

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Figure 4.5. Virtual water trade balances and flows of agricultural products, 1997–2001

Source: Adapted from Chapagain and Hoekstra, 2008

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virtualwaterisappliedmainlytothetradeinbiomassandbiomassproducts,butcanapplytomanufacturedgoodsaswell.

Europe,Japan,China,andIndiaarethebiggestnetimportersofwaterembodiedintradeofagriculturalproducts,followedbythecountriesoftheMiddleEast(Figure4.5).Contrarytothetradeinmaterialsdescribedabove,theUSisthebiggestnetexporterofembodiedwater,duetoitshighnetexportsofagriculturalproducts,notablycereals.Manynetexportersofmaterials(Figure4.4)arealsonetexportersofvirtualwaterfromagriculture,includingCanadaandAustraliafromtheOECD,andSouthAmerica,SouthAfricaandSoutheastAsiafromthedevelopingworld(HoekstraandChapagain,2007).4

Thediscussionontheallocationofembodiedenvironmentalfactorstoeithertheproducingortheconsumingcountriesalsocoversgreenhousegasemissions.Forexample,uptoaquarterofChina’stotalCO2emissionsareembodiedinChineseexportstotherestoftheworld(PetersandHertwich,2008a;YunfengandLaike,2010).Thishasimportantpolicyimplicationsforthedesignofinternationalenvironmentalagreements:shouldthecostoftheseemissionsbeincludedinthepriceoftheexports,orassumedbytheimporter?

Therelocationofenvironmentally-intensiveeconomicactivitiesfromdevelopedtodevelopingcountriescanalsoinduceanetincreaseofglobalenvironmentalpressures.Forexample,globalCO2emissionsincreasedby720milliontonsofCO2between1997and2003duetotheoutsourcingofproductionfromtheUStoChina(ShuiandHarris,2006),duetothehighshareofcoalusedforelectricityproductioninChinaandlessefficientmanufacturingtechnologiesinChina’sindustrialsectors.

4 Similar patterns have also been found for the net trade of embodied HANPP (human appropriation of net primary production). The US by far leads the ranking of the top net-exporters of embodied HANPP, followed by Australia, Argentina and Brazil. Most important net importing countries are Japan, followed by China, the Netherlands and South Korea (Erb et al., 2009)

4.1.5 Trade, decoupling and development

Currenteconomicspecializationandresultingphysicaltradepatternshavehadbothpositiveandnegativeimplicationsforeconomicdevelopmentindevelopingcountries(EisenmengerandGiljum,2006;GiljumandEisenmenger,2004;MuradianandGiljum,2007;Muradianetal.,2002;Pérez-Rincón,2006;Russietal.,2008).Thebalanceofpositiveandnegativedependslargelyontheenablingandregulatoryconditionsandthespecificconditionsthatareagreed.Factorscitedforcontributingtothenegativeimpactshaveincluded:

• Pricesforrawmaterialshavebeenfallingfordecades(Figures2.4and2.5),forcingdevelopingcountriestoexporteverlargeramountsofnaturalresourcestomaintainaconstantlevelofincome;

• Developingcountriesmayexportnaturalresourceswithlittleornodomesticprocessingandthuslittlecreationofaddedvalueforthedomesticeconomy;

• Multi-nationalenterprisesaremajoractorsinprimarysectorproductionandtradeandtheseenterprisesactaccordingtotheeconomicinterestsoftheirstockholdersratherthanthelong-termdevelopmentofthecountrywheretheactivitytakesplace–thismayinclude,forexample,favouringtherepatriationofprofitsinsteadoflocalre-investmentsintotheregionaleconomy;

• Someprimarysectorsarepoorlyconnectedtotherestofthenationaleconomy,representing‘extractionenclaves’withlittlespill-overeffectsonregionalmarkets(agricultureisasignificantexception);

• Resourceextractionactivities,inparticularintheminingsector,areverycapitalintensiveandprovideonlymodestemploymentforlocalpeople;


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• Rent-seekingandcorruptionarewidespreadphenomenainmanycountriesspecializinginresource-intensivesectors,withlocalelitesoftenspendingrevenuesonconsumptionorforeigninvestmentratherthaninvestingindomesticsectorswhicharecrucialforsustainabledevelopment,suchasinfrastructure,educationandhealth.

Despitetheseconcerns,internationaltradecanmakeanimportantcontributiontoglobaldecouplingwhenguidedbyappropriatepoliciesonenvironmentandtrade.Thesehavehithertobeenmanagedseparatelyatcountryandgloballevels(with,forexample,verylimitedconnectionsbetweentheworkoftheWTOandglobalenvironmentalbodiessuchastheinternationalenvironmentalconventionsandtheUNEPGoverningCouncil).Keypolicyprinciplesthatcouldinformanimprovedpolicyinterfacetosupportdecouplingincludethefollowing(seeDittrich,2007):

1. tradecouldcontributetoreducingglobalresourceusethroughexploitingtransportandphysicalorgeologicalpotentialsinawaythatminimizesnegativeenvironmentalimpacts;

2. tradenegotiationscouldconsiderthefullvaluechainofthecommoditiesbeingtraded,agreeingpricesthatincorporateenvironmentalfactorsandsocialcoststhatarenowconsidered‘externalities’;and

3. tradeagreementsbetweencountrieswhoseeconomiesarebasedonexportingprimaryresourcescouldbeaccompaniedbysideagreementsthatassistthesecountriesindiversifyingtheireconomies,includingthroughaddingvaluedomesticallyandsupportingimpactdecoupling.

Suchmeasurescouldsupportthedesireofdevelopingcountriestodiversifytheireconomiessothattheycanreduce

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dependenceontheexportofasmallnumberofcommodities,supportthedevelopmentofdomesticmarkets,andpromotesustainableeconomicdevelopment.

4.2 Decoupling, development and inequality

Globaleconomicgrowthhasacceleratedoverthepastquartercenturydueinlargeparttothecomplexprocessofeconomicglobalizationthatabsorbedthenewly-industrializedcountriesasmajoreconomicplayersintotheglobalfinancialsystem.Althoughsomeassumedthatcomputerizationwouldleadtoadematerialized‘knowledgeeconomy’,materialextractionalsoincreasedfromabout35billiontons(35Gt)in1980tonearly60billiontons(60Gt)in2005, withsubstantialincreasesinparticularinthe

extractionanduseofconstructionmineralsandores(reflectingthetwinimpactsofacceleratedurbanizationandpopulationgrowthonresourcerequirements).

Thebenefitsofglobaleconomicgrowthwerenotevenlydistributed.In1998,therichest20%oftheworld’spopulationwasresponsiblefor86%ofconsumptionexpenditure,whereasthepoorest20%wereresponsibleforonly1.3%ofconsumptionexpenditure(UnitedNationsDevelopmentProgramme,1998).Whileconsumptionexpendituredoesnottranslatedirectlyintoconsumptionofmaterials,thesestatisticsareadramaticreminderthatthewealthyhaveampleroomforresourcedecoupling,andassociatedimpactdecouplingwouldbenefitallpeople.

Somedecouplingaccompaniedtheexpansionofmaterialconsumption,astheoverallmaterialintensityoftheglobal

Figure 4.6. Material intensity of the world economy: Domestic extraction of materials per unit of GDP by world region

1980 1985 1990 1995 2000 2005

Source: Behrens et al., 2007

Material intensityTons per US$ (constant 1995)

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01980 20051985 1990 1995 2000

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economydeclinedfrom2.1tonsin1980to1.6.tonsperUS$1000in2002(Figure4.6).Inotherwords,25% less material input was required in 2002 compared to 1980 to produce one unit of real GDP(Behrensetal.,2007).Thisdecouplingwasaneconomicresponsetotheinnovationsmadepossiblebythegrowthofinformationandcommunicationstechnology,newmaterials,moreefficientproductionmethods,betterhealthandeducation,andahostofotherfactors.ItseemsreasonabletoconcludethatresourcedecouplingonaglobalscalehasbeenasignificantpartofglobalGDPgrowth,withmanydevelopingcountriesshowingmorerapidGDPgrowththantheindustrializedcountries,atleastsomeofwhichexperiencedlow,orevennegative,GDPgrowthratesinatleastsomeyears.However,Figure4.6alsorevealsthatWesternEuropeandNorthAmericaremainedthemostefficienteconomiesduetotheirknowledgeinfrastructuresandtechnologicalcapabilities,andtheoverallprocessofrelocatingextractiveindustriesintootherpartsoftheworld.Incontrast,theresource-richresource-exportingcountriesinLatinAmerica,Africa,Oceania(duemainlytoAustralia’srapidriseasacoalandironoreproducer)andAsiawereeitherhighlyinefficient(Africaortransitioncountries)orwerebuildingfast-growingeconomiesthatwereincreasinglydependentonconstructionminerals,oresandfossilfuels(AsiaandOceania).

IsdecouplingarealisticbasisforfurtherpolicyworktosupportthegreeneconomythathasbeenadvocatedinprinciplebytheG20(Barbier,2009;Houseretal.,2009;Pollinetal.,2008;Renner&Sweeney,2008;GreenNewDealGroup,2008)?Willthesolutionstotheglobaleconomicrecessiondependoninvestmentsin‘greengrowth’ratherthanjustbeareturntobusiness-as-usual?Nodefinitiveanswersareavailable,butsomeevidencesuggestscautiouslypositiveanswers.

UNEPconsidersagreen economy is “one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. In its simplest expression, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive”.5

UNEP’sGreenEconomyinitiativecommissionedareport(Barbier,2009)thatdescribesa‘business-as-usual’approachasfollows:

• globalenergydemandwillriseby45%by2030,pushingoilpricestoUS$180/barrel;

• GHGemissions,coupledtoenergydemand,willincreaseby45%by2030,pushingaveragetemperaturesupbyasmuchas6degrees;

• globalGDPcouldshrinkby5–10%,withpoorercountriessufferinglossesinexcessof10%;

• degradationofecosystemserviceswillcontinueandwaterscarcitieswillbecomemorepervasive;

• over3billionpeoplewillbelivingonlessthanUS$2adayby2015.

ItthenarguesthattheUS$2–3trillionthatwillbeinvestedtorevivetheglobaleconomyshouldbeinspiredbymorethananarroweconomicrecoveryvision.Itproposesthreeinter-linkedinvestmentobjectives:

• revivetheworldeconomythroughemploymentcreationandprotectingthemostvulnerable;

• reducecarbondependence,ecosystemdegradationandwaterscarcity;and

• realizetheMillenniumDevelopmentGoalofendingextremepovertyby2025.

5 See http://www.unep.org/greeneconomy/


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Many countries have incorporated ‘green growth’ elements into their economic rescue packages(Figure4.7).Theseincluderetrofittingbuildingstomakethemmoreenergyefficient,expandingpublictransportandfreightrailservices,constructing‘smart’electricalgridmanagementsystems,investinginrenewableenergy(wind,solar,bioenergy),greeningoflivingspaces,restoringriversandforests,recyclingwastes,andimplementingGIS-basedgreeninformationsystems(Barbier,2009).Manyoftheseinvestmentsareconcentratedinnewkindsofurbaninfrastructure,thusreinforcingthesignificanceofcitiesinmanagingthetransitionto‘greeneconomies’.

4.2.1 Africa as a special case?GrowthratesinAfricainthe1980saveragedbelow2%,butbytheendofthe1990sweregettingcloseto3%andby2005werereaching5%.However,theseimpressivegrowthratesdeclinedafterthecollapseofcommoditypricesfrom2008onwards,mitigatedonlyslightlyin2009bytherisingpriceofoil.ThisisindicativeofthestructuralweaknessesoftheAfricangrowthmodel.

In2000,theexportofprimarynaturalresourcesaccountedfornearly80%ofall

exportsfromAfrica.Thisismuchhigherthanfortherestoftheworld(seeFigure4.1).AccordingtotheUNConferenceonTradeandDevelopment,in 2003 many African countries were highly dependent on the export of a single resource–forexample,crudeoil(Angola,Congo,Gabon,Nigeria,EquatorialGuinea),copper(Zambia),coffee(Burundi,Ethiopia,Uganda),tobacco(Malawi)oruranium(Niger)(Oxfam,2005).Manymoreweredependentontheexportofjusttwoorthreeprimaryproducts.

TheWorldBankhasestimatedthe‘realwealth’ofcountriesbycalculating‘genuinesavings’,byadjustingthegrosssavingscomponentoftheGrossNationalIncome(GNI)asfollows:first,depreciationoffixedcapitalwasdeductedtocreateafigurefor‘netsavings’;tothiswasaddedexpendituresoneducation(deemedtobeaninvestmentinhumancapital);thenthevalueofthedepletionofnaturalcapitalandofpollutionwasdeductedinordertoarriveatthefigureforGenuineSavings(WorldBank,2006).BecausemostAfricancountriesareexportersofprimaryresources,theresultofthisstudywasthatmostAfricancountrieshadanetnegativerateofGenuineSavingsrelativetoGrossNationalIncome.Thefactthatthe

Figure 4.7. Eco-friendly spending, total amount and percentage of total fiscal stimulus package

Source: HSBC, 2009

South KoreaChina

United Kingdom

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GenuineSavingsforsub-SaharanAfricahoveraroundzeroisanimportantexplanationforwhypovertyalmostdoubledbetween1981and2005(WorldBank,2006,p.42).

However,whereascountrieswithrelativelydiverseeconomies,likeKenya,TanzaniaandSouthAfrica,havepositivegenuinesavingsrates,resource-dependentcountrieslikeNigeriaandAngolahavegenuinesavingsratesthatdeclineto-30.Thecountrieswiththehighestresourcedependenceandlowestcapitalaccumulationincludedsomeofthelargestresourceexporters,namelyNigeria,Zambia,Mauritania,Gabon,andCongo.Unfortunately,raisingresourcepricesinabsenceofappropriateregulatoryarrangementsandgoodgovernancecouldexacerbatewhatSachsandWarner(2001)calledthe ‘resource curse’,awaytoexplainwhycountrieswithsubstantialresourceendowmentsenduppoor.Theysuggestthatover-dependenceonexportincomeremovestheincentivetoinvestinthehumanresourcesandinnovationsrequiredforgrowththrougheconomicdiversification.Insteadoffundinginstitutionalandhumancapitalresourcestobenefitthemajority,resourcerentsbolsterthepowerandprestigeofelites.Itfollowsthatanystrategytoincreaseresourcerentsforresource-richresource-exportingeconomieswillneedtobecoupledtoa‘goodgovernance’strategyaimedprimarilyatstrengtheningdemocraticinstitutionsandaccountability(Evans,2006).

Theabove-citedWorldBankreportcomesaftermorethan20yearsoftradeliberalization.Africangovernmentshaveliftedprotectivetariffs,thusundercuttinglocalindustriesthatwereunabletocompetewithpricesofimportedgoods.Inthenameofincreasingtrade,theoppositewasachieved.AccordingtoChristianAid,“[t]radeliberalizationhascostsub-SaharanAfricaUS$272billionoverthepast20years.Overall,localproducersare

sellinglessthantheywerebeforetradewasliberalized”(ChristianAid,2005,p.3).

DespiteincreaseddemandforprimaryresourcesfromtheemergingeconomiessuchasChinaandIndia,the value of Africa’s primary resource exports are generally falling.ThisisparticularlytrueforagriculturalproductsthatdeclinedinabsolutevaluefromUS$15billionin1987toUS$13billionin2000.AccordingtoAksoyandBeghin(citedinBond,2006,p.61),non-oilexportingsub-Saharancountriessufferedfromdecliningtermsoftradefortheperiod1970–1997resultinginacumulativereductioninrevenuelevelsthatamountedto119%oftheirtotalactualGDPfortheperiod.Inotherwords,ifthetermsoftradehadremainedstable,thecombinedGDPofthesecountriesfortheperiod1970–1997wouldhavebeenmorethandoublewhatitwas,withalltheattendantpotentialdevelopmentbenefits(Bond,2006,pp.60–63).

Remainingsodependentontheexportofprimaryresourcesdoesnotmakeeconomicsenseforanyresource-richresource-exportingcountries.WhatwillmakeadifferenceinAfricaaresubstantialinvestmentsinthedevelopmentofindigenousinnovationcapacityandgovernancesystemsthatmakeitpossibletocapture resource rents for re-investing in human capital development, infrastructure and technological innovation. AnidealmodelthatmayhavesomelessonsisNorway’sapproachtoinvestingitsresourcerentsgeneratedfromoilinwaysthatwillcontinuetobeeconomicallyproductiveafterthedeclineofoilrevenues.

4.3 Decoupling and the rebound effect

Thispaperhasshownthatbothresourcedecoupling(achievingthesameorgreateroutputwithfewerinputs)andimpactdecoupling(doinglessenvironmentalharm


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perunitofoutput)arefeasible,andindeedaretakingplace(drivenlargelybymarketforces).Itlogicallyfollowsfromthisthatanyinnovationthatresultsinlessinputs/impactsperunitofoutputwillcontributetodecoupling.Inpractice,however,otherfactorscomeintoplay.Thisistheproblemthathascometobeknownasthe‘reboundeffect’(otherwiseknownasJevon’sParadox).The rebound effect is the quantitative difference between the projected savings of resources that should have been derived from a given set of technological changes and the actual savings derived in practice,measuredinpercentageterms.Itdeterminestheactuallevelofdecouplingthatcanbeachievedbyagivensetofsustainabilityinnovations.

Jevon’sParadoxinitsoriginalformclaimedthat“withfixedrealenergyprices,energyefficiencygainswillincreaseenergyconsumptionabovewhatitwouldbewithoutthesegains”(Saunders,1992).Undertheconditionofconstantprices,thereboundeffectcanamounttomorethan

100%ofthesavingsachievedbytheoriginalinnovation.

Variouseffortshavebeenmadetoclassifyreboundeffects(Greening&Greene,1997;Sorrell,2007).Acommonclassificationisintomicroeffects(ordirectrebound)andmacroeffects(indirectrebound).Microeffectsoccurattheconsumerlevel:eventhoughthefinalpriceofaproductisnotdeterminedentirelybytheresourceprice,ingeneralifaconsumersavesmoneyonacommoditybecauseithasbeenproducedwithlessresourcesandthereforepossiblyatlowercost,hemayconsumemoreofthiscommodity,orspendhismoneysavedonsomethingelsethatagainconsumesresources.Macroeffectsoccuratthelevelofnationaleconomies,aremorelongtermandmoredifficulttoassess.Howthesedirectandindirecteffectsmaybedistinguishedfromtheeffectsofeconomicgrowthingeneraldependsontherespectivetheoryofeconomicgrowth.Forsome,thisispossible(Sorrell,2007),butotherscontendthatreboundeffectsarea

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necessaryoutcomeofeconomicgrowthandthereforecannotbedistinguishedfromgrowth(AyresandWarr,2005).

Researchon micro level reboundeffectshas,ingeneral,concludedthatacrosstimeandacrossproducts,thereboundeffectisnotamajorproblemanddoesnotunderminethecaseforinvestinginresourceefficiencyorproductivity(Greeningetal.,2000;Herring,2004;Berkhoutetal.,2000;Schipper,2000).Inmostcases,thedirectreboundsrangefrom0%to40%(Sorrell,2007).Thesizeofdirectreboundeffectsdependsonincome:therichertheconsumer,thegreaterthelikelihoodthathewillnotbuymoreofthesameifitgetscheaper,andtheresourcesavingswillbeachieved.Thepoorertheconsumer,themorelikelyhewillredirecthissavingsintomoreorotherconsumptionthatwillreducetheresourcegains.Thisway,however,thereboundeffectactuallyallowsforimprovementsinmaterialwelfare.ResearchonruralelectrificationinIndia,forexample,showsthatareboundeffectofatleast50%couldbeobserved,buttherebyallowedformeetingbasicneedsthatcouldnotbemetpriortoelectrification(Roy,2000).

However,whenitcomestothemacro-economic level theimplicationsofthereboundeffectaremuchlessclear,andarepotentiallyproblematicfromadecouplingperspective.Themacro-levelreboundeffectdoesnotadequatelyaddressthedivergencebetweenprojectedefficiencygainsandactualefficiencygains.Whereefficiencyincreases,thedivergenceisinthelevelofeconomicactivitywhich,intheory,shouldbehigherwithefficiencygainsthanwithout.Itisverydifficulttoverifythisempirically,especiallyforefficiencyincreasesthataretheresultofgovernmentpolicy.Thisisclearlyanissueforfurtherresearch,withsomeplausiblesupportforthisproposition(AyresandWarr,2005;AyresandvandenBergh,2005)butnodefiniteproofofadirectlinkbetweenincreasesinenergyefficiencyandeconomicgrowth.

4.4 Prices and resource productivity

Thesizeofreboundeffectsdependsatleastpartlyonthetrajectoryofprices.Inacontextofconstantorsinkingpricelevels,reboundeffectstendtobecomelarger.ThisissuewillbedealtwithinmoredetailintheSecondReportoftheDecouplingWorkingGroupthatwillfocusonspecificapplicationsofdecouplingacrossarangeofsectors.

Figure2.4showedthatthelong-termhistoricaltrajectoryofrealresourcepriceshasbeendownwardinthe20thcentury,withsomeperiodsofsoaringresourceprices.SincetheturnoftheMillennium,manyhavearguedthatnow,finally,resourcepriceswillcontinuouslyrise.Thesurgeofoil,gasandothermineralresourcepricesuntiltheeconomiccrisisin2008wastriggeredbysteeplyrisingdemandfromtherapidlydevelopingAsianeconomies,ledbyChina,followingstandardeconomictheoryofsupplyanddemand.Butthe economic interpretation that declining price levels are a correct market indicator for resources not becoming scarcer is risky:onemayfindtheoppositewhenitisalreadytoolatetotakecorrectivemeasures(seediscussioninDeBruynetal.,2009).

Inthecontextoftheclimatedebate,whereagreementshavebeenachievedaboutlimitsnotofresourceuse,butoftheabsorptioncapacityoftheatmosphere,policyinterventionsintothepricesystemseeminevitable.TradingpermitsforCO2emissionswill–indirectly–raisepricesforenergyusefromfossilfuels.Variousinstrumentsareavailable–thecapandtraderegime,feebates,feesandcharges–andvariouscommandandcontrolinstrumentssteeringtechnologieshavedirectandindirecteffectsonprices.Anothermajorinstrumentforinfluencingpricesisataxescalatorregime,usedinBritainandGermanysincethe1990s.The‘escalator’ideaistoaddsmallannual


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pricesignalsthatareagreedformanyyearsinadvance.

Thesetwohistoricalexamplesoffueltaxescalatorscanbeseenasproofofeffectiveness.TheBritishescalatoronpetroltaxeswasintroducedin1993,andtheGermanecotaxreformcamesixyearslater.Inbothcasesthefiscaldutyincreasedyearbyyearbyverysmallamounts,whichbyitselfwouldhavehardlyanysteeringeffect.Butthe certainty of future steps to come had a major effect on customer behaviour.Familieswouldbuymorefuel-efficientcars,travellingbyrailandotherpublictransportenjoyedsomerenaissance,andunnecessarytripswerereduced.Figure4.8showstheeffectsonCO2emissionsfromfuelconsumptionpercapitaandyear.ItshowsthatGermanpetrolconsumptionfallsbeforetheecotaxescalatorbeganwerealsocausedbyfueltaxes,whichwereraisedthreetimesbythepreviousgovernmentsince1991forpurelyfiscalreasonstopayforcostsoftheGermanunification.

Figure4.8contraststheBritishandGermanexperienceswiththoseofCanadaandtheUS.Inthelattertwocountries,theincreasingefficiencyofcompactcarswasmorethancompensatedbytheintroductionoftaxbreaksforsportutilityvehicles(SUV’s)andsmalltrucksandbyaddedmilesdriven;nosignsofrecoverycanbeseeninthemostlyoutdatedandinefficientrailwaysystemsintheNorthAmericancountries.

IfclimateprotectionpoliciesaregoingtobetakenseriouslyworldwideanditisagreedthatastrongdownwardtrajectoryofCO2emissionsneedstobeachieved,policyinterventionsdirectlyorindirectlyintothepriceoffossilfuelwillberequired,andthisislikelytoincreasethepricelevelofallrawmaterials.Inthewaythistransitionisplannednow(Stern,2007;Edenhoferetal.,2008),itmighttransfersomeoftheincomeachievedintodevelopingcountrieswhereanincreaseinmaterialwelfareishighlywarranted.

Figure 4.8. CO2 emissions from fossil fuel consumption

1993 1998 2003 2008

Source: UNEP, 2011. The UNEP GEO Data Portal, as compiled from Carbon Dioxide Information Analysis Center (CDIAC). United Nations Environment Programme, http://geodata.grid.unep.ch.

Indexed 1993=100

110

100

90

80

1993 20081998 2003

● Canada● USA● UK● Germany

United KingdomFuel duty escalator 1993–1999

GermanyEcotax 1999–2003


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Conclusions and major policy challenges5

5.1 Conclusions

Thisreporthassoughttoclarifytheconceptofdecouplingasappliedtosustainabledevelopment.Thisconceptprovidesabasisforenhancinghumanwell-beingwhilereducingtheintensityofresourcesbeingusedineconomicactivities(resourcedecoupling)andreducingnegativeenvironmentalimpactsfromanyuseofnaturalresources(impactdecoupling).Resourcedecouplingleadstoincreasingefficiencywithwhichresourcesareused,sometimescalled‘dematerialization.’Impactdecouplingmeansusingresourcesbetter,more

wisely,ormorecleanly,butdoesnotnecessarilyreducetheamountofresourcesused,orthecostofproduction.

Thereport’sfocushasbeenonmaterialresources:constructionmaterials;oresandindustrialminerals;fossilfuels;andbiomass.Thesenaturalresourceshavebeenharvestedatincreasingratesoverthepastcentury,helpingtosupportincreasinglyrapidgrowthinGDP(Figure2.1).Theymaygraduallyapproachlimitsofproduction,astheirpricesinrecentyearsareshowingincreasingvolatilityafteralong-termdeclineofabout30%duringthe20thcentury.Increasing

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demandforresources,declininggradesofseveralkeyores,andincreasingenvironmentalimpactsassociatedwithresourceusesuggestthatdecouplingcouldbeatimelypolicyresponse.

Othercategoriesofresourcesarealsoimportantandwouldbenefitfromdecoupling(suchaswater,soilsandland),butthesearebeingaddressedelsewhere,includingbyotherworkinggroupsoftheInternationalResourcePanel(IRP).

Thereporthasbuiltonseveralfundamentalconcepts:

• Adistinctionbetweenrelative decoupling(inwhichthegrowthrateofresourcesusedislowerthanthegrowthrateofGDP,thoughresourceusecontinuestogrow)andabsolute reductions ofresourceuse.Absolutereductionsarerare,astheyrequireresourceproductivitytogrowfasterthanGDP.

• Afocusonmaterial resources,characterizedbyqualitiesthatrenderthemusefulforcertainapplications,andgetlost(ordiminished)byuse.Theyarenaturalassetsdeliberatelyextractedbyhumanactivityfortheirutilitytocreateeconomicvalue;theycanbemeasuredinbothphysicalunitsandmonetaryterms.

• Alife cycle perspectiveonresourceuse,showingthatresourceuseimpliesaseriesoftransformations.Whileeachofthefourclassesofmaterialresourcesaredifferentinmanyways,generallyspeaking,theirlifecyclebeginswithextractionoftheresource,thentransporttoaprocessingplant,combustionorconversionintoacommodity,contributiontoamanufacturedproduct,transporttoconsumers,consumption,andfinallydisposalorrecycling.Eachpartofthelifecyclecantakeplaceinvariouspartsofacountryorevendifferentpartsoftheworld,withthecostsandbenefitswidelydistributed.Decoupling

cancontributetoresourceefficiencyatmanypartsofthelifecycle,withdifferentactorsresponsibleforthedecouplinganddifferentpoliciesrequiredforsupportingdecouplingatthedifferentstagesofthelifecycle.

• Resourcescanbeaccountedforastotalglobalornationalamountsannuallyused,andasindividualmetabolicrates,whichistheamountofresourcesconsumedbyanaveragepersonontheentireglobeoraparticularcountry.Metabolic rates arearelativelyobjectivewayofcomparinghowresourceconsumptionischangingovertime,orforcomparingcountrieswitheachother.Theaverageglobalmetabolicratedoubledfrom4.6tonspercapitain1900to8–9tonspercapitaatthebeginningofthe21stcentury.Metabolicratesvarywidelyamongcountries,anindicatorofinequity,thoughitappearsthatdenselypopulatedareasandregionsneedfewerresourcespercapitaforthesamestandardoflivingandmaterialcomfort.

• Adistinctionbetweeneconomic growth(definedastheaddedmonetaryvalueofallfinalgoodsandservicesproducedwithinacountryinagivenperiodoftime)andphysical growth(definedasthegrowthofphysicalthroughputintheeconomy).Itisphysicalgrowththatiscoupledtoenvironmentalpressuresandresourcedepletion.

International tradeisacriticalissueindecoupling,giventhatsome20%oftheconsumptionoftheresourcecategoriesaddressedinthisreportistradedinternationally,andCO2emissionsembodiedininternationallytradedproductsaccountedfor27%ofthetotalenergy-relatedCO2emissionsin2005,upfrom22%in1995(Bruckneretal.,2010).Environmentalpressuresdirectlyandindirectlylinkedtointernationaltradethusmakeupasignificantshareoftotalenvironmentalpressures.Internationallytradedmaterialsincreasedfromabout


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5.4billiontons(5.4Gt)in1970to19billiontons(19Gt)in2005,anindicationofthechallengeoftryingtoassignresponsibilityfordecouplingalongthevaluechainfromoriginalextractiontoultimatedisposal.

Thereportwasnourishedbythedetailedcase studiesfromChina,Japan,Germany,andSouthAfrica,allofwhichhaveexperiencedthelong-termconsequencesofresourcedepletionandnegativeenvironmentalimpacts,andrespondedbyadoptingpoliciesthatincludedecoupling.

Whilesomedecouplinghasoccurred‘spontaneously’(forexample,GDPgrewataconsiderablyfasterratethanmaterialextractionormetabolicratesduringthe20thcentury,asshowninFigures2.1and2.2,respectively),muchmoreisneededifsocietyistobesustainableoverthelongerrun,asresourcescomeundermorepressurewithpopulationgrowthandincreasingGDP.

Thisneedisindicatedbyconsideringseveralscenariosforthefuture.Businessasusualwouldtripleglobalannualresourceextractionby2050,comparedto2000,amountingtosome140billiontons(140Gt)–farbeyondwhatislikelytobesustainable.Moderatecontractionandconvergence wouldrequireindustrializedcountriestoreducetheirpercapitaresourceconsumptionbyhalftheratefortheyear2000whiledevelopingcountriesreachthemetabolicrateoftheindustrializedcountriesby2050–thiswouldleadtoaglobalannualresourceuseof70billiontons(70Gt). Toughcontractionandconvergence wouldkeepglobalresourceconsumptionatits2000level,butredistributetheresourcessoallcountriesachieveroughlythesamepercapitametabolicrate;thiswouldbeunlikelytobepoliticallyacceptable.Eventhelastscenariowouldnotleadtoanactualglobalreductioninresourceuse.

Thereportfindsthatinnovation,evenradicalinnovation,willberequiredto

achieveresourceandimpactdecoupling.Someofthiswillneedtobeeconomicinnovation,forexampleUNEP’sGreenEconomyInitiative,whichseekstocouplearevivedworldeconomywithreducingecosystemdegradation,waterscarcity,andcarbondependence.Otherformsofinnovationwillbebasedonnewknowledgeandwaysofmanaginginformation,leadingtotechnological,institutionalandrelationalinnovations.

Anespeciallypromisingsourceofinnovationcouldbecities,wheremorethanhalftheworld’spopulationlives.Peopleareattractedtocitiesforjobs,education,shelter,protection,accesstoinformation,andculturaldiversity.Citiesusuallyhavealowermetabolicratethanruralareas,thoughrichercitieshavehighermetabolicrates.Butcitiesalsoconcentratetheknowledge,financial,socialandinstitutionalresourcesneededforsustainabilityinnovations.Whilecitiesdriveunsustainableuseofresources,theycanalsoprovidethegreatestpotentialforsustainabilityinnovations.

Ultimately,onemainobjectiveoftheIRPistoprovideinformationabouthowtoreducetheconsumptionofresourcesrequiredtosupportwell-beingforallpeople.Non-material economic growthhasbeenproposedasonemeansofdoingso.Decouplingisseenasamajorconceptualbasisforhelpingtoachievethis,butmanychallengesremain.Thisreporthasidentifiedsomeofthemajorchallengesandsuggestedpossibleapproachestoaddressingthem.

Manygovernmentshaveadopted‘greengrowth’asanimportantpartoftheireconomicdevelopment,astheoverallmaterialintensityoftheglobaleconomydeclinedfrom2.1tonsperUS$1,000in1980to1.6tonsin2002,requiringsome25%lessmaterialinputin2002comparedto1980toproduceoneunitofrealGDP(Behrensetal.,2007).

5. Conclusions and major policy challenges

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Insummary,resourceandimpactdecouplingarealreadytakingplace,thoughataratethatisinsufficienttomeettheneedsofanequitableandsustainablesociety.Fargreatereffortswillberequiredinthecomingyearstoacceleratedecouplingandavoidinganyreboundeffect,andthereporthasidentifiedsomekeychallengesthattheIRPwilladdressinthecomingyears.Successinmeetingthesechallengeswillcontributetomeetingtheneedsofagrowingpopulation,reducepoverty,andsupporteconomicdevelopmentwithoutthreateningtheecosystemservicesuponwhichhumanwell-beingdepends.

5.2 Major policy challenges

Thisreporthasprovidedevidencethatitistimetorecognizethelimitstothenaturalresourcesavailabletosupporthumandevelopmentandeconomicgrowth.Growing resource constraints will not affect everyone equally.Theworld’spoorestpeoplewillbedeprivedofopportunitiestodevelop,eventhoughthey

areminorconsumersofmostmaterialscoveredinthisreport.Atthesametime,theworld’srichestnationswillfinditincreasinglydifficulttoenjoytheircurrentlevelsofconsumptionandthefruitsofastableworldifresourcedepletioncontinuesandresourcepricesincrease.Theoptimalsolutionforallcountriesistomakesustainableresourcemanagementacentralfocusofglobalpolicyframeworksforgrowthanddevelopment.Asacontributiontowhatthismeansinpractice,thisreporthasshownhowdecouplingofresourceconsumptionandenvironmentalimpactsfromeconomicgrowthcouldprovideapolicytoolforcalibratingtheshiftsrequiredovertimetomanagethetransitiontoamoresustainableglobaleconomy.

Tomakethetransitiontoamoresustainableglobaleconomy,sustainableresourcemanagementstrategieswillberequiredthatpromoteresourceandimpactdecoupling,withanemphasisonabsoluteresourceusereductionsindevelopedeconomiesandrelativedecouplingindevelopingeconomies(uptoacertainpoint

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afterwhichtheymustalsoshiftintoanabsolutereductionmode).

Thisapproachtodecouplingposesatleastthefollowingmajorchallenges:

• Howcanglobalresourceflowsandtheirassociatedenvironmentalimpactsbeintegratedwitheffortstodealwithproblemssuchasclimatechange,degradationofecosystemservices,andpollution?

• Howcanpolicymakers(andthepublic)beconvincedoftherealityofphysicallimitstothequantityofnaturalresourcesavailableforhumanuseandthatthenegativeenvironmentalimpactsofeconomicactivitiesalsohavelimits?

• Whataretheeconomicfactorsdrivingthedecouplingthatisalreadytakingplace,andhowcanthesebemobilizedmoreeffectivelytoenhanceescalationsininvestmentsininnovationsandtechnologiesthatcanacceleratedecoupling?

• Howcanmarketsignalsgenerateincreasesininnovationforresourceproductivity?Howcaninternational

tradebestincorporatetheconceptsofresourcedecouplingtosupportequitableconditionsoftradeinnaturalresources?

• Howcanthecurrenteconomicgrowthmodelbemodifiedtorealizetheaimsof‘non-materialgrowth’throughsustainableresourcemanagement?

• Giventhatthemultiplechallengesofeconomicgrowth,sustainableresourcemanagementandendingpovertytakeplaceinthemidstofthe‘secondwaveofurbanization’,howcancitiesbecomethespaceswhereingenuity,resourcesandcommunitiescometogethertogenerateinpracticewhatdecouplingmeansinthewaycitiesproduceandconsume?

• Howcandecouplingbedemonstratedasanecessarypreconditionforreducingthelevelsofglobalinequalityandeventuallyeradicatingpoverty?Inparticular,howcandevelopingcountriesfindagrowthanddevelopmentstrategythateradicatespovertybyincreasingresourceproductivityandrestoringecosystemservices?

TheIRPintendstoseekanswerstosuchquestionsinitsfuturework.

5. Conclusions and major policy challenges

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Country case studies

Whatfollowsarefourcasestudiesofcountriesthathaveinonewayor

anotherstartedtoaddressthechallengeofdecoupling.Thecountries

studiedareGermany,China,SouthAfricaandJapan.Eachcaseis

structuredinaccordancewiththefollowingheadings:

• Recognizing limits:thissectionaddresseswhetherthecountryhas

experiencedandrecognizedresourceconstraintsandlimits;

• Policy responses:thevariouspolicyresponsesarethenassessedin

ordertoshowhowthecountryunderstandsthechallengeandthe

relatedresponses(mainlyatthelevelofintent);

• Decoupling:whetherthereisevidenceofdecoupling,bothempirically

andatthelevelofpolicyintent;

• Conclusion and outlook:keychallengesgoingforward.


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Germany1 6

Addressing overallresourceproductivityasakeyelementofsustainableproductionandconsumptiononlyveryrecently

cameintothefocusoftheFederalGovernmentofGermanywiththeformulationofaNationalStrategyforSustainableDevelopment(NSSD)in2002.Thegovernment’sgoaltodoubleresourceproductivityby2020evolvedasakeyindicatortoevaluatepolicyprogressintheprocessofformulatingtheNSSD.‘Governancebyevaluation,integrationandcoordination’ishowZieschank(2006)labelstheuseofanindicatorsetintheNSSD.Thisis,however,quiteanuncommonpracticeinGermanpolicymaking.Thenewgovernment,inplacesince2009,reconfirmedthispolicylineandestablishedanationalresourceefficiencyprogramme,servingasaninputtotheRio+20UNConference.

6.1 Recognizing limits

Germanyisoftendescribedasanearlyfront-runnerinenvironmentalpolicymaking.Recognitionofnaturallimitstoresourceuse–albeitmorebiasedtoimpacts–wasalreadyapparentintheearly1970swhenthebasisforsuccessfulreductionofairandwaterpollutionandforapropersystemofwastedisposalandhandlingwaslaid(AndersenandLiefferink,1997).Inits1971EnvironmentalProgrammetheBrandtgovernmentofSocialDemocratsandLiberalsadopteda

1 The main text of this case study was completed in January, 2009. A few factual amendments were added in December, 2010.

strategicplanningapproachandattemptedtotreatenvironmentalprotectioninanintegratedmanner.Theprogrammeformulatedambitiouslong-termtargetsforairpollutioncontrolandwaterprotection,describednearly150concretepolicymeasures,andsetupguidingprinciplesofenvironmentalpolicy.Newinstitutionalarrangements2wereestablished,leavingtheMinistryoftheInteriorinchargeofenvironmentalpolicy.3Despiteformaladoptionofenvironmentalpolicyasacross-sectionaltaskandformalcontinuationoftheEnvironmentalProgrammebythefederalgovernmentin1976,theintegratedandstrategicplanningapproachinthelate1970sandearly1980sgavewaytoamedium-termapproachrelyingheavilyondetailedcommand-and-controlregulationstocontrolemissionsatthesource.Federalenvironmentalpolicythusbecameincreasinglyfocusedonkeyresourcecarrierssuchasair,waterandsoil,withpollutionaddressedinmostcasesbymeansof‘bestavailabletechnology’.ThoughtheKohlConservative-Liberalgovernmentafter1982haltedfurtherprogressinenvironmentalpolicy,advancescontinuedtobemadeinthe1980sandearly1990swithrespecttoairpollution,waterprotectionandwastedisposalandmanagement.Bythemiddleofthe1990s,however,theformerfront-runnerhadturnedlaggardastheKohlgovernmentfailedtoformulateanintegratedapproachtotheconceptof

2 In 1972 the Environmental Expert Council (SRU) was established, as well as Cabinet Committees and Standing Committees of Federal executives; two years later the Federal Environmental Agency (UBA) was set up.

3 The Federal Ministry for the Environment was established later in 1986.

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sustainabledevelopmentconceptualizedbythe1987BrundtlandReportandthe1992UNCEDinRio.Itmaybeworthmentioning,though,thatin1998,thethenenvironmentministerDr.AngelaMerkel,wholaterbecamechancellor,issuedacomprehensivepolicypaperonsustainabledevelopment4intendedtoanswerthechallengesfromRiodeJaneiro.Butinthe1998elections,threemonthslater,politicalmajoritieschanged,andthegovernmentofSocialDemocratsandGreens(1998–2005)setoutonanother,yetmoreproactiveagenda.

6.2 National Strategy for Sustainable Development

ThecalltodevelopaNationalStrategyforSustainableDevelopment(NSSD)wasraisedbythink-tanks(BUND/MISEREOR,1996) andintheBundestag,thefederalparliament.Theworkoftwosuccessiveparliamentarycommitteesofenquiry5finallyledtotheBundestagaskingthefederalgovernmenttoelaborateaNSSDandtoestablishasustainabledevelopmentcouncil.6Aftertheelectionin1998anewgovernmentcoalitionofSocialDemocratsandGreenstransposedthisdecisionintoitscoalitionagreement:aNSSDwithconcreteobjectivesshouldbeelaboratedbythenewgovernmentandbepreparedby2002.In2000thegovernmentdecidedontheinstitutionalframeworkforaNSSD.ItsmainfeatureisastrongrolefortheChancellor’sOffice(Bundeskanzleramt);itsmandateistohorizontallycoordinatetheworkofthefederalministriesinvolvedintheNSSDthroughaCommitteeforSustainableDevelopmentatthelevelofpermanentsecretaries.7Aninter-ministerialworkinggroupatthelevelofsub-directors

4 Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (BMU), 1998. Entwurf für ein umweltpolitisches Schwerpunktprogramm. Bonn: BMU.

5 Cp. Deutscher Bundestag, 1998.6 This decision in 1998 was made using a wide cross-party

consensus.7 This Committee was called “Green Cabinet” under the Schröder

government; after the election of 2005 this name was dropped.

preparesthemeetingsoftheCommittee.OtherimportantinstitutionalinnovationsweretheestablishmentoftheGermanCouncilforSustainableDevelopment(RNE)in2001andanewCommitteeforSustainableDevelopmentintheBundestagin2004.TheRNEsignificantlycontributedtotheNSSDthatwasfinallyendorsedbythegovernmentin2002.

RecallingthepatternsofenvironmentalpolicymakinginGermanyasdescribedabove,itisnosmallachievementthattheNSSDwasdevelopedandthatitsinstitutionalsettingwasestablished.TheNSSDcanbeseenasaremarkablepolicyinnovation–whetheritprovestobealong-termsuccessremainsopenasthestructuralconditionsofintegratedpolicy-formulationandpolicymakingcontinuetobeunfavourable.

TheGermanNSSDcomprisesstrategic,mostlyquantitative,trendobjectivesandindicators–allinallasetof21indicatorsgroupedundertheheadings‘intergenerationalequity’(includingindicatorsfornaturalresourceuse,statebudget,innovationandeducation),‘qualityoflife’(includingindicatorsforeconomicprosperity,qualityoftheenvironment,mobility,nutrition,healthandcrime),‘socialcohesion’(includingindicatorsforemployment,equalopportunitiesandfamilies)and‘internationalresponsibility’(includingindicatorsforexpenditurefordevelopmentaidandopeningEUmarkets).Inthecontextofthisreport,Indicator1(‘resourceconservation’)isthemostimportant,asitincludessub-Indicators1a‘energyproductivity’and1b‘resourceproductivity’.TheNSSDgoalistodoublebothenergyproductivity(baseyear1990)andresourceproductivityby2020(baseyear1994).The‘resourceproductivity’indicatorincludesallusedabioticrawmaterialextractedinGermanyaswellasabioticimports.Bioticrawmaterial,though,isnotincluded,whichconstitutesagraveproblemaswillbediscussedlater.Adifferentindicator


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(Indicator4‘landuse’)callsforthereductionofthedailyincreaseinlanduse(dailyincreasereducedfrom120hato30haby2020).

TheNSSDissubjecttoregularreviewandsomeindicatorswererevisedin2006(thoughnonereferringtoresourceuse).Whyeachofthe21indicatorswaschosenisnotalwayseasytocomprehend.AsJänicke(Jänickeetal.,2001)pointsout,thereisafundamentallackofagreementinthefederaladministrationonhowtodefinesustainability.Bethatasitmay,theNSSDdoublingresourceproductivityby2020becametheofficialgoalofthefederalgovernment.ThisgoalwasaffirmedbythenewMerkelgovernmentafter2005andcannowbeconsideredasthecornerstoneofthegovernment’spositiononresourceuse.TheChancellor’spoliticalcommitmenttothegoalsoftheNSSDshouldbeseenasanimportantprerequisiteforthecontinuingeffortstowardsimplementingsustainablepatternsofconsumptionandproductioninGermany.

6.3 A feasible vision? The ‘2000 Watt/cap society’

Thefeasibilityofraisingenergyefficiencybyafactoroffour(atleast)hasbeendemonstratedformanyspecificexamplesandwithnationalandglobalscenarios.8Inparticular,theSwissconceptofa‘2000Wattpercapitasociety’9isinteresting,becauseitincludesavisionforthecombinationofenergyefficiencywithmaterialefficiencyasagoal,thoughthemutualreinforcingeffectshavenotbeenquantifiedinintegratedscenariosuptonow.

Meanwhile,theconceptisdebatedinGermanyaswell:decoupling,leapfroggingandsocio-technicalinnovationsarethebasicrationalebehindtheconceptofthe‘2000Wattpercapitasociety’forOECD

8 Compare Weizsäcker et al., 1998 and Lovins & Hennicke, 1999. WBGU 2003 and Ecofys/ DLR et al., 2007 and 2008.

9 The 2000-watt society is a vision, originated by the Swiss Federal Institute of Technology in Zürich at the end of 1998, in which each person in the developed world would cut their overall rate of energy use to an average of no more than 2,000 watts (i.e. 17,520 kilowatt-hours per year of all energy use, not only electrical) by the year 2050, without lowering their standard of living.

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countries.2000W/cap(=65GJ/cap)correspondstoonethirdoftoday’sEuropeanpercapitaenergyuse.EnablingaGDP/capgrowthoftwothirdsby2050,the‘2000Wattpercapitasociety’impliesafactor4to5increaseinenergyefficiency.Swissresearchinstituteshavebeenworkingonthisconceptformanyyearsdemonstratingthetechnicalfeasibilityofthischallengingvision.Astheworldaverageenergyconsumptioninthelasttwodecadeshasbeen70GJ/cap,oneoftheSwissreport’shypothesesisthat65–70GJ/capcouldevenbeafutureconvergencevalueforasustainableworldenergysystem.

Thus,anambitiousincreaseinenergyandmaterialproductivity,acompletechangeoftheinnovationsystems,theexploitationoflongre-investmentcyclesandgradualstructuralchangetomoresustainablepatternsofconsumptionandproductionareimportantpreconditionsforestablishinga‘2000Wattpercapitaworldsociety’.

Itshouldbeaddedthatbyreducingthegiganticlossesofexistingenergysystems10andbyraisingtheshareofrenewables(asdecidedforEU-27andespeciallyforGermany)thevisionof‘asustainableenergysociety’couldeventodaybetakenasguidanceforconcreteimplementationsteps.Meanwhile,forGermanyverysophisticateddatabasesanddozensofmedium-term(2020)andlong-term(2050)scenariosareavailablethatdemonstratethefeasibilityofasustainableGermanenergysystem.

6.4 The key to sustainable energy: efficiency increase by a Factor x

Uptonow,thedebateonresourceefficiencyhasfocusedonenergy.Manydetaileddatabasesandsophisticatedscenariosareavailable,especiallyforGermany.Butno

10 On average only about 30% useful energy is derived from 100% primary energy inputs in the worldwide energy system and in most national energy systems; see Jochem, 2004.

fullyintegratedscenarioanalysisofstrategiestofosterthecombinedincreaseofmaterialandenergyproductivityforGermanyorothercountriesexists.

Adetailed,butagainonlyenergy-relatedanalysisofthefeasibilityofasustainableenergysystemwaspresentedforGermanyin200811intheso-called‘BMULeitszenario’,12servingasanorientationforenergy,climateandresourcepoliciesadvocatedbytheGermanMinistryofEnvironment.Thisscenariodemonstratesthatthephase-outofnuclearpower(by2023asdecided),thereductionofCO2by80%(by2050),amoderate1.2%annual(green?)increaseofGDP-growthandadditionaljobcreationaretechnicallyfeasibleandcost-effectiveinthelongrun:themoderateadditionalsocietalcostsfortheenergysystemupto2030willbemorethancompensatedforbythebenefitsby2050.Onecrucialassumptionisthat(besidesanambitiousincreaseintheshareofrenewablesinallsectors)energyproductivityincreasesatleastbyafactorof4–inotherwords,afourfoldincreaseintheefficiencywithwhichenergyisused.

Withtheso-calledIntegratedEnergyandClimateProgramme(IECP,2007/2008)theGermangovernmentadoptedtwodozenpoliciesandmeasureswhosecollectiveaimby2020istoraisetheshareofrenewablesforelectricityto30%,forheatto14%,theshareofCombinedHeatPower(CHP)forelectricityto25%andtosaveenergyinallsectors.WiththehelpoftheIECPandadditionalmeasuresitisexpectedthatatleasta30%CO2-reductionby2020(and40%reductionconditionedtoambitiousgoalsoftheEU27)canbereached.

Whilenotfullyconvincingwithregardtoimplementation(e.g.toomoderategoalsfornewcoalpowerplantsandefficiencystandardsforthecarindustry)theIECPneverthelessisoneimportantstepforward

11 Sustainable world energy scenarios with comparable goals and results have been developed by Lovins/Hennicke, 1999; WBGU, 2003; and Ecofys/ DLR et al., 2007 and 2008.

12 See BMU, 2008a.


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inthedirectionofthenewEcologicalIndustrialPolicyoftheMinistryofEnvironment.13Thekeytothisnewstrategyistofosteranincreaseinresourceproductivity(e.g.theintegratedincreaseofenergyandmaterialproductivity)anddevelopmentof‘leadmarkets’e.g.forsustainableenergyandmobilitysystems,forrenewables,forrecyclingtechnologiesandforsustainablewaterandwastemanagement.14Ithasbeencalculatedthattheworld‘market’(profitablepotential)15forGreenTechaddsupto€1000billion(2005)withtheprospecttomorethandoubleby2020.

InSeptember201016theChristianDemocraticandFreeDemocraticcoalitiongovernment(inpowersinceOctober2009),mostlyreconfirmedtheseapproachesbutmodifiedthepositiononnuclearpower,allowingforanextendedtimeframeforthephase-outofnuclearreactors.

6.5 Integrating material and energy efficiency strategies

Uptonow,strategiestofosterenergyefficiencyandclimate/resourceprotectionhavebeenseparatedfromactivitiestodevelopanddisseminatematerial-efficientproductionprocesses,productsandservices.Withinenterprisesanintegratedaccountingofenergyandmaterialflowsisstillanexception.Butfromthecostperspectiveofenterprisesaswellasforthenationaleconomytherearecloseinter-linkagesifenergyandmaterialproductivityissteppedupinanintegratedway.Ingeneral,addressingresourceproductivityincreasesasatoppriorityseemstobeapromisingstrategyfordecouplingaddedvalueandeconomicgrowthfromresourceuseandtocreate

13 See BMU 2008b.14 See BMU/ UBA 2007.15 Though the study speaks of “markets“, the formulation “profitable

options“ is preferred. Because of market failures and obstacles, it requires incentives, guidelines and a new policy mix to convert these gigantic profitable options into self-sustained markets.

16 See BMWi/BMU, 2010.

structuralchangestonewgreenpatternsofgrowth.

Tomakeithappen,technologyandresourcepriceswillbecomethekeyinstrumentfordrivingtheeco-efficiencyrevolution.However,thiswillneedtobeaccompaniedbyadiscourseandpoliciesonmoreenvironmentally-viablelifestylesandonnewpatternsofsustainableconsumptionandproduction.Inthatcase,thetechnologicalefficiencyrevolutionhelpstogaintimeandmaysupportastructuralchangetonewmodelsofwealth.

Accordingtoofficialstatistics,materialthroughputaccountsformorethan40%oftotalcostofproductionintheGermanprocessingindustry.Thisismorethantwicethelabourcostshare.Theshareofenergycostintheprocessingindustryliesonaverageonlyatabout2%.Thus,the‘material’costfactorismoreimportantforcompetitivenessoftheeconomyandofenterprisesthanlabourcosts.17ThesameorderofmagnitudeappliestootherOECDcountries.

Ontheotherhandrawmaterialandenergyprices(oil,gas)aremostlydeterminedbytheworldmarketandthuswillinfluencecompetitorsallovertheworldinamoregeneralandequalizedwaythandomesticwages.Furthermore,concerningmaterialandenergycoststherearespecificmarketfailuresandobstacles–evenintheperiodofrapidlygrowingrawmaterialandenergypricesuptosummer2008–thatmakeSMEsespeciallyreluctanttoexerciseevenverycost-effectiveoptionsforcostreduction.Thelistsofobstaclestorealizecost-effectiveenergy-efficiencypotentialsislong(e.g.deficitsofawareness,information,markettransparencyandcapitalavailability,missinglifecycle-costcalculations,asymmetricpaybackexpectationssplitincentives,etc.)andwillbecertainlyevenlongerandmorecomplex

17 Engaging in resource strategies on the enterprise level is in the interest of German Trade Unions (especially IG Metall), as it would lower pressure on labour costs; see BMU/IGM/WI, 2006.

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whenitcomestomaterialefficiency.18Thehugevarietyofrawmaterials,substances,composites,etc.andofsubstitutionorrecyclingoptionsisthemainreasonwhywithoutthehelpofanewpolicymix(e.g.externalexperts,networking,informationprogrammesandincentives)highlycost-effectivepotentialsarenotrealized.

Inthisrespect,itmakessensetoaskhowtojointlyincreasematerialandenergyefficiencyinpracticebyanintegratedstrategyandhowtocreatepositiveincentivesespeciallyforsmallandmediumenterprises.ThemanagementconsultancyArthurD.Little(AdL)assumesthatbyconsultingexternalexpertscompaniescanregularlyreducetheirmaterialthroughputcosts.Experienceshowsthatanannualcostreductionof20%canbeachievedbynon-recurrentexpenditurethathasanaveragepaybackof12months.19

18 See Bleischwitz et al., 2008.19 See AdL/ISI/ WI, 2006.

6.6 Decoupling – empirical evidence and strategic actions

Empiricalevidencesuggeststhatbetween1994and2007aseeminglyimpressiveabsolute(resource) decouplingofGDPgrowthandrawmaterialinputs20occurredinGermany.Whileresourceproductivity(rawmaterials)roseby35.4%andGDPby22.3%,rawmaterialinputdecreasedby-9.7%(seeFigure6.1).

Buttheaverageannualincreaseofabout2%from1994–2007mustmorethandoubleiftheofficialNSSDgoalistobeachieved.Whilethereissomeevidencethatthisgoalisstillwithinreach,scalingupexistingsuccessfulprogrammesandacceleratingtherateofincreaseofresourceproductivitywillrequireambitiousnewinitiativesespeciallyfromtheGermangovernment

20 This includes all used abiotic raw material extracted in Germany as well as imported abiotic materials.

Figure 6.1. Resource productivity and GDP growth

Source: DESTATIS, 2008, http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/EN/Content/Publikationen/SpecializedPublications/EnvironmentEconomicAccounting/Statement2010,property=file.pdf

Index1994=100

200

140

120

100

80

● Raw material productivity● GDP (price adjusted)● Raw abiotic material extraction and imports

160

180

1994 20202000 2005 2010

Target 200


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andfromindustry.Furthermore,theGermanrawmaterialsconceptdoesnotincludebioticrawmaterials,21i.e.itignorestheveryimportanttrade-offbetweenbiomassandfossilfuelsorbetweenbioticandabioticrawmaterialsasinputsforindustry.AlsonotincludedaretheeconomicallynotusedprimarymaterialextractedinGermanyandallindirectrequirementsassociatedwithimportedgoods.These‘ecologicalrucksacks’andinternationalsideeffectsofthedomesticuseofresourcesarethereforeneglectedinthesemetrics.

AttheEU-1522levelthereisclearempiricalevidencethattheburdenofgrowingresourceextractionisshiftingtotheoutsideworld,especiallytodevelopingcountries.WhiledomesticTotalMaterialRequirement(TMR)23between1980and1997absolutelydecoupledfromGDPgrowth,theforeignTMRincreased(Molletal.,2005).Theproblematicsubstitutionoffossilfuelsbybiodieselencouragedbytaxexemptionsandlaterbyamandatoryblendingoffossil-baseddiesel(Beimischungsgebot)andthegeneralincreaseinenergyusefromimportedanddomesticbiomass(mostlynotcertifiedfromsustainableproduction)isalsonotcoveredbytheGermanrawmaterialsindicator.

6.7 Impulse programme for material efficiency (2005–2009)

AmacroeconomicanalysisforGermanindustry(seeBox)demonstratesthatevenifonlyhalfoftheexistingmaterialefficiencypotentialswererealized,therewouldstillbeanincreaseingrossnationalproduct,andcreationofnewbusiness

21 See UBA, 2008.22 EU-15 includes Austria, Belgium, Denmark, Finland, France,

Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.

23 Total Material Requirement (TMR) measures total primary material requirements of production and consumption. It comprises the domestic and foreign share and the used and unused extraction of resources.

areasandofemployment.Thesemacro-economiceffectsseemtojustifyalong-termmodernizationandinnovationpolicyforreducingmaterialcosts,growthandemployment.AfeasibilitystudybyAdLandothers(Jochemetal.,2005)identifiedafirstmixofinstrumentsandmeasurestoaddressandovercomeprevailingbarriers.

Basedontheencouragingresultsofthesestudies,theGermanGovernmentin2005initiatedapilotphaseforanImpulseProgrammeforMaterialEfficiencytotestinstrumentsandcreatepilotprojectsandnetworksforSMEsandpublicenterprises.Theoveralleconomicgoalistoreducematerialandenergycostsinthemanufacturingindustryandpublicsector.Minimizationofresourceuse,residues,wasteandemissionsareexpectedtoyieldcostsavings,identifynewbusinessfields,andincreaseemploymentandcompetitiveness.Apre-feasibilitystudyidentifiedpotentialsandprioritysectorsforpilots.24Theprogrammeoffersfinancialsupportforaudits(VerMat)andforestablishingnetworks(NeMat)forSMEs.

24 See: www.wupperinst.org

The Aachener Modell

Results of the Aachener Modell (reducing material costs for German industry by 10%)

At the end of the simulation period (2020):

• Additional employment: + 1,000,000 jobs• Additional business revenues: + €120 billion • Additional increase of economic growth: + 1% per year• Harvesting first mover advantages of

competitiveness• Reducing import dependency of strategic

resources• Contributing to geostrategic risk minimization • Approaching the official German goal (“doubling resource productivity in 2020“)

Source: Aachener Stiftung, Kathy Beys, 2005

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AGermanMaterialEfficiencyAgency(DEMEA)hasbeenestablished.

BySeptember2008,DEMEAhadsuccessfullysupportedin-depthauditsformorethan236projects.Onaverage,costsavingsof€229,000(2.5%ofrevenues)withapaybacktimeoflessthan6monthsweredemonstrated.Additionally,about40SMEnetworksforraisingmaterialefficiencywereestablished.

InNorthRhineWestfaliatheEfficiencyAgency(EFA,establishedin2000)hassupportedmorethan700projectsincollaborationwithfiveaffiliatesacrosstheregion.Abalancesheetof140completedprojectsconcludesthata€27.8millioninvestmentinresourceefficiencytechnologieshasyieldedanannualcostreductionof€8.7million(averagepaybacktimeofabout3years)hasbeenachieved.

6.8 Research on integrated strategies (Ecological Industrial Policy)

BasedonscientificresearchresultsandsuccessfulpracticalexamplestheGermanMinistryofEnvironmentandtheGermanEnvironmentAgencylaunchedanambitiousfour-yearresearchprojectonmaterialefficiencyandresourceconservation(MaRess)25.CoordinatedbytheWuppertalInstituteincooperationwithaconsortiumof30partnersfromresearchinstitutes,universitiesandindustry,MaRessisexpectedtodefineanewpolicymixforincreasingresourceproductivityasakeystrategyofanewEcologicalIndustrialPolicy.TheprojectstructureissummarizedinFigure6.2.

TheWuppertalInstitutehasalsoproposedanInnovationProgrammeforResourceEfficiencytoformpartofacomprehensiveGerman‘Konjunkturprogramm’tomitigatetheeconomiccrisis.26Byscalingup

25 See www.wupperinst.org 26 See Hennicke & Kristof, 2008.

existingexperiencesoftheDEMEAandEFA(seeabove)withatotalamountof€10billionfromthefederalbudgetfortheSME-sector,itsaimwouldbetofosterecologicalmodernization,andcreatenewemploymentandbusinessfieldsforGreenTech.ItwouldbeoperatedbyaleanfederalResourceAgencytogetherwithanetworkofregionalandlocalpartners.SupportforSMEswouldcompriseamixtureofimpulseandin-depthauditscombinedwithinvestmentsubsidies.Thekeyrationaleforthisprogrammeisathreefoldintegration:

Itisestimatedthat(especiallythroughthisintegratedapproach)theprogrammewouldhaveahighself-financingeffectforthefederalbudgetandwouldcontributetowardsdefendingandextendingtheworldmarketpositionofGermanGreenTechindustries.

1. Integration of five key thematic strategies

• create sustainable markets, give innovations a direction

• establish strong institutions, build partnerships and networks to foster the diffusion of existing GreenTech

• develop sustainable products (‘cradle to cradle-approach’)

• use the market power of the state as a consumer

• create new thinking through training and education (e.g. ‘Resource University’)

2. Integration of sectoral policies

• harmonize overlapping and target oriented policies – at least the Ministry of Economics, Ministry of Science and Education, Ministry of Transport and Buildings, and Ministry of Environment should cooperate

3. Integration across technology and product-development cycles

• integrate target oriented R&D to raise material and energy efficiency with Demonstration, Pilots and Market Aggregation (fostering diffusion)


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Successfulimplementationofthisprogrammewilldependonmanyfactors,includingaconvincingdemonstrationoftheeconomicbenefits,effectivescalingupoftheGermaninnovationsystem,mitigationofreboundand

counterproductivegrowtheffects,developmentofaneffectivecommunicationsstrategyand–ingeneral–acceptancebythetargetgroupandthevotingpublic.

Figure 6.2. Structure of the project MaRess

Source: Wuppertal Institute, http://ressourcen.wupperinst.org/en/project/index.html

Potentials of increasing resource efficiency

WP 1Potential analysis of

lead products/technologies

WP 2Metallic ores, PGM,

infrastructures

Target group specific policy of resource efficienty

WP 3Resource policy to design framework

requirements

WP 4Resource policy at

the microscopic level

WP 12Consumer-oriented

resource policy

WP 14Ecodesign guidelines

Analysis effects

WP 5Top-down analysis

of the economic impact of an accelerated

resource strategy

WP 6Indicators,

bottom-up models, scenarios

Application, agenda-setting, dissemination of results

WP 7Policy

recommendation and policy papers

WP 8Conferences

WP 11Advisory committee

WP 13Communication of

resource efficiency: Factors of success

and approaches

WP 10Resource efficiency

network

WP 9Roadmap dialogues

Work packages

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6.9 Institutional context for decoupling: selected problems

Integratedenvironmentalpolicymaking,understoodinitsfullmeaningassustainabledevelopment,provesdifficultintheinstitutionalcontextoftheFederalRepublicofGermany.ThefederalstructureleadstoanasymmetricalallocationofenvironmentalcompetenciesbetweenthefederalandLänderlevel.Moreover,Germanyisastrongexampleofaconsensusdemocracy(Lijphart,1999),itsconstellationofvetoplayersleadingtoincrementalpolicyevolutionor,evenworse,deadlockintimesofopposedmajoritiesinbothchambersofparliament.Theelectoralsystemcreatescoalitiongovernments,normallycomprisedofabig(SocialDemocratsorConservatives)andasmall(LiberalsorGreens)party,withconsiderableideologicalheterogeneityoftheactorsinvolved.CoalitiongovernmentsoftheGermankindtendtoviewtheircoalitionagreementsasbindingcontracts,makingtheformulationofnewpoliciesnotagreeduponintheoriginalagreementverydifficult(Martin,2004).Thisheldtrueespeciallyforthe2005–2009‘GrandCoalition’betweenConservativesandSocialDemocrats.AlthoughtheChancellorhasthepowertospecifytheoveralldirectionofgovernmentpolicies(Richtlinienkompetenz),theadministrativestructureofthefederalgovernmentis,ingeneral,notfavourableforintegratedpolicyapproachesandhorizontalcoordinationasministershavestrongpositions,leadingtheirministriesundertheirownortheirparties’responsibility,respectively.Finally,Germanyisusuallydescribedasa‘highregulatorystate’,meaningthatthebodyofenvironmentallawsandregulationisdenseandpoliciesare,overall,gearedtowardstop-downapproaches.Theuseofnewinstrumentsofenvironmentalgovernance,suchasmarket-basedinstruments(eco-taxes,tradablepermits,etc.)wasonlyreluctantlyintroducedintherepertoire,noneofthemaddressingtheissueofsustainable

productiondirectly.Ontheotherhand,(legallynon-binding)voluntaryagreementsbetweengovernmentandindustrywereusedquiteofteninthecontextofsustainableproduction,e.g.leadingtothephasing-outoftheuseofharmfulsubstancessuchasleadinpetrol(Wurzeletal.,2003).Inthefieldofwastepolicy,however,instrumentswereimplementedtoinfluenceproductdesignatanearlystage.Theprincipleofproducer’sproductresponsibilitywasintroducedwiththeWasteManagementActof1986andreconfirmedintheCyclicEconomyandWasteActin1996.Thisapproachwasquitesuccessfulwithregardtopackingmaterialsforhouseholdproductsandbatteries(Müller,2002).

6.10 Conclusion and outlook

Ontheonehandtherearestillnumerousproblemstobesolvedandobstaclestobeovercomefora‘decouplingpolicy’inGermany.Successfulimplementationofanewresourcepolicywouldcertainlyacceleratetheongoingstructuralchangeaswellastheeco-efficiencyrevolutioninGermany.Ineveryperiodofrapidstructuralchangetherewillbewinnersandlosers,whichraisesspecificchallengesforthewillingnessandcapabilitiesofgovernmentsandpoliticstotakethelead.Ontheotherhand,forGermanythereismuchevidencethatinthelongrunraisingresourceproductivityisawin-win-winoption,leadingto(net)benefitsfortheprivatesector,creatingnew‘green’businessfieldsandjobs,andreducingenvironmentalimpactsandsocialtensionsfromresourceextraction.

Overthelongterm,anewresourcepolicywillneedtoaimtochangethedirectionoftechnicalprogress,fosteringresourceproductivityatleastwiththesameintensityasthatofthegrowthinlabourproductivity.Theultimatesocio-economicgoalshouldbeanewlabour-augmentingandnature-savingpatternofsocialandtechnologicalprogressonthewaytosustainabledevelopment.


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South Africa17

SouthAfrica hasonlyrecentlyemergedfromacolonialandapartheidhistoryspanningfourcenturiesofracially-based

dispossessionanddisenfranchisement,andwhichproducedwidespread,systemicpoverty.The1994democratictransitionheraldedunprecedentedchange.Virtuallyeveryfacetofpolicyandpracticeintheemergentdemocraticstatewasreviewedandrevised.ABillofRightsformspartofthenewConstitutionandspecifically

1 This case study is based on a report entitled Growth, Sustainability and Dematerialisation: Resource Use Options for South Africa, by Mark Swilling, commissioned by The Presidency, South African Government, presented at the Workshop on Scenarios for South Africa in 2019, The Presidency, Pretoria, July 2007 (Swilling, 2007).

guaranteestherightofallSouthAfricanstohavetheenvironmentprotectedforthebenefitofpresentandfuturegenerations.Butreconcilingcomplexandsometimesconflictingrelationshipsbetweenpoverty,economicdevelopmentandprotectionofenvironmentalassetsisamajorchallenge.Inparticular,thedominanteconomicgrowthanddevelopmentparadigmfailstoaddressawiderangeofunderlyingresourceconstraintsthatcanrapidlyunderminethepreconditionsforthekindofdevelopmentalgrowththatisrequired.

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7.1 Recognizing limits2

ItisbecomingincreasinglyapparentthatkeyecologicalthresholdsinSouthAfricaarebeingbreachedbyitsprevailingapproachtogrowthanddevelopment,andthatthisisresultingindysfunctionaleconomiccosts.Thisconditionofrisingcostscausedbyanewsetofmaterial,ecologically-drivenconstraintssetsthecontextfornewwaysofthinkingaboutthecountry’seconomicgrowthmodelandpovertyreductionstrategies.Sincethefirstdemocraticelectionsin1994,SouthAfricahasexperiencedanunprecedentedgrowthperiodthatcametoanendtowardstheendof2008.Asaresource-richresource-exportingcountry,SouthAfricabenefited

2 This section is based primarily, but not exclusively, on background research materials commissioned to inform development of the National Framework for Sustainable Development. The materials were circulated publicly and most are available on www.deat.gov.za. The commissioned research papers are referenced in the sub-headings that follow, and additional research integrated where necessary. Because this section relies quite heavily on these papers, they are not specifically referenced. The supporting research and backup references can be found in these commissioned papers.

fromtheriseincommoditypricesoverthepastdecade,butsufferedastheycollapsedduring2008asaresultoftheglobalfinancialcrisis.Figure7.1andFigure7.2demonstratethisgrowthperiod,andhoweconomicgrowthhascorrelatedwithemploymentgrowth,whichisakeystrategytoreducepoverty.

SouthAfricaneconomicgrowthhasbeendrivenbyacombinationofexpandeddomesticconsumptionfinancedbyrisinglevelsofhouseholddebt,whichinturnissecuritizedagainstresidentialproperties,andexportsofprimaryresources.Themanufacturingsectorhas,unfortunately,declinedinresponsetoavigorousstrategytolowerimporttariffsandliberalizethecapitalmarkets(thusfavouringinvestmentsinliquidassetsratherthanlong-termfixedinvestments).Figure7.3andFigure7.4revealtheriseinconsumptionspendingandthedeclineinmanufacturing.

Figure 7.1. Real GDP growth 1983–2004

1983 1988 1993 1998 2003 2008

Source: South African Reserve Bank. Data cited in Quantec, 2010

Annual changePercent (%)

6

4

2

0

–41983 20081998 20031988 1993

–2


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Figure 7.2. GDP and employment change 1983–2004 (non-agricultural sectors)

1983 1988 1993 1998 2003 2008



6

4

2

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–61983 20081998 20031988 1993

–4

–2

● GDP● Employment

Figure 7.3. Final consumption expenditure by households

1983 1988 1993 1998 2003 2008



10

8

6

4

–41983 20081998 20031988 1993

0

2

–2

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Figure 7.4. Percentage of household saving and debt 1970–2006

1990 1993 1996 1999 2002 2005 2008

Ratio

80

70

60

50

–101990 20082002 20051996 1999

0

● Household debt to disposible income of households ● Saving to disposible income of households

40

30

20

10

1993

ThegrowthinfinalrealdemandisshowninTable5.6,butwhenreadagainstrisingdebtlevelsanddeclineinthemanufacturingsectorinthefiguresthatfollow,itisclearthatdebt-financedconsumptionhasbeenthedriverofconsumerdemandforanincreasingquantityofimportedproducts.Thebalanceofpaymentspressuresthiscreatedwasatfirstmitigatedbythebeneficialimpactsofrisingcommodityprices.Butwiththeglobaleconomiccrisis,botheasycredittodriveconsumptionandhighcommoditypricescametoanend.

SouthAfrica’sdependenceonitsrichendowmentofnaturalwealthisreflectedinFigure7.5.Itrevealsthesignificanceoforeextraction,althoughithasdeclinedsince1980.Atthesametime,coalextractionhasincreasedtofuelthecoal-basedelectricitygenerationindustrywhichsuppliesthecheapestelectricityintheworldtoSouthAfrica’seconomy.Thelow-pricecoalandmineralpolicyhasresultedinlimiteddiversificationoftheeconomyandhighlevelsofinefficiency.

Despitethedependenceonoreandcoalextraction,thereisalsoevidenceofdecouplinginthe20yearsleadingupto2000asrevealedinFigure7.6.Althoughbasedonalimitedstudy,Figure7.6doessuggestthatarelativelyminorlevelofdecouplingistakingplace–domesticmaterialconsumption(DMC)ofprimarymaterials3hasdeclinedwhilepopulationgrowthandGDPhavegrown.However,thismaybemisleadingbecausethecalculationofDMCexcludesexportedmaterials,withdramaticincreasesintheexportoforesandcoalasakeydriverofGDPgrowth(seeFigure7.7).

Inshort,SouthAfricaisagoodexampleofaneconomycaughtupinthefinancializationofaglobalizedeconomy.ThishasunderminedmanufacturingastariffbarriershavebeenloweredandcheapimportsfromAsiahaverisen.Ithasalsoresultedindebt-financedconsumptionspending,andincreaseddependenceonrevenuesfromexportedprimaryresources

3 Domestic material consumption is the sum of domestic extraction of primary resources, plus imported primary resources, minus exported primary resources.


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1980 1985 1990 1995 2000 2005

1980 1985 1990

Figure 7.5. Domestic extraction

Source: Social Ecology Database (SEC database, http://www.uniklu.ac.at/soc ec/inhalt/3812.htm) and SERI (www.materialflows.net)

Billion tons

600

400

200

01980 20051985 1990 1995 2000

● Industrial minerals● Ores● Coal● Construction minerals

500

300

100

Figure 7.6. Material efficiency 1980–2000

1980 1985 1990 1995 2000

Source: Social Ecology Database (SEC database, http://www.uni-klu.ac.at/socec/inhalt/3812.htm) and SERI (www.materialflows.net)

Indexed 1980=100

180

160

140

120

100

60

1980 20001985 1990 1995

● GDP● Population● DMC● Material intensity (DMC/GDP)

80

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1980 1985 1990 1995 2000

Figure 7.7. Primary material exports 1980–2000

Source: Social Ecology Database (SEC database, http://www.uni-klu.ac.at/socec/inhalt/3812.htm) and SERI (www.materialflows.net)

Exports Billion tons

140

100

80

40

20

01980 20001985 1990 1995

● Industrial minerals● Construction minerals● Other fossil fuels● Oil● Ores● Coal

120

60

atlowprices.Theunsustainabilityofthisisrecognizedbythegovernmentandkeystakeholdersandvariousinterventionsarebeingmade.

However,SouthAfricaisarobustconstitutionaldemocracywiththreelayersofgovernment(National,Regional,Local)thatare,inturn,independentfromoneanother.Thishasresultedinverylowlevelsofintra-governmentalcoordination.Eachsectorrespondstothesustainabilitychallengesinitsownway,butwhatislackingisagovernment-wideapproachthatconnectsindustrialpolicy,environmentalpolicy,andresourcemanagementstrategies.Thesesectoralresponsesarediscussedfurtherbelow.

7.2 Climate change4

UsingtheGlobalClimateModelsthefollowingchangestotheSouthAfricanclimatewithinthenext50yearswerepredicted,withdrasticimpactsonnationalwateravailability,foodandbiomassproductioncapacity,incidenceofdiseaseandthecountry’suniquebiodiversity:

• continentalwarmingofbetween1and3°C;

• broadreductionsofapproximately5to10%ofcurrentrainfall;

• increasedsummerrainfallinthenortheastandsouthwest,butreduceddurationofsummerrainsinthenortheast;

4 Based on the work of the Scenario Building Team 2007, Department of Environmental Affairs and Tourism, 2005a.


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• nominalincreasesinrainfallinthenortheastduringwinterseason;

• increaseddailymaximumtemperaturesinsummerandautumninthewesternhalfofthecountry;

• extensionofthesummerseasoncharacteristics.

CO2isSouthAfrica’smostsignificantgreenhousegas(GHG),contributingmorethan80%ofitstotalGHGemissionsforboth1990and1994.ThemainsourceofCO2emissionswasfromtheenergysector,whichgenerated89.7%oftotalCO2in1990and91.1%in1994.ThesehighemissionlevelsrelatetothehighenergyintensityoftheSouthAfricaneconomy,whichdependsonlarge-scaleprimaryextractionandprocessing,particularlyintheminingandmineralsbeneficiationindustries.Althoughstilladevelopingeconomy,itsenergyintensivenatureanditsdependenceoncoal-drivenenergysourcesresultsinanextremelyhighcarbonemissionlevelperunitofGDPcomparedtotherestoftheworld(seeTable7.1).

ALongTermMitigationScenario(LTMS)exercise(seenextpage)producedtwoprimaryscenarios,namelytheGrowthwithoutConstraintsScenarioandtheRequiredbyScienceScenario.Thefirstmodelslong-termimplicationsofcurrenteconomicpolicy,andconcludesthatemissionswillgrowfrom440megatonsofCO2-equivalentin2004to1600megatonsof

CO2-equivalentby2050.Thiswouldinvolvefuelconsumptionrisingby500%,buildingsevennewcoal-firedpowerplantsor68IntegratedGassificationplants,constructingnineconventionalnuclearand12PebbleBedModularReactor(PBMR)plants,andintroducingfivenewoilrefineries.Renewableenergywillplayanegligiblerole.TheRequiredbyScienceScenarioenvisagesveryradicalinterventionstopositionSouthAfricainapost-carbonworld.Theresultwouldbea30–40%reductionofCO2-equivalentemissionsby2050from2004levels.Thescenarioviewsthisambitiousprogrammeofextremedecouplingasnecessary,butadmitsitcannotbereliablycostedastherequiredtechnologiesmuststillmature.TheLTMSdocumentwasadoptedbytheSouthAfricanCabinetinJuly2008,withacommitmenttotheRequiredbyScienceScenarioasthepreferredoption.Thishasmajorimplicationsforeconomicanddevelopmentpolicy.

7.3 Oil resources5

Importedoilmeetsapproximately16–20%ofSouthAfrica’senergyneeds.Table7.2illustratesthatifdemandforliquidfuelsinSouthAfrica(essentiallythehydrocarbonspetrol,dieselandjetfuel)isdrivenbycurrenttransportdemandpatternsandtransportmodes,evenmodestgrowthratesof3%and6%peryearwouldleadtoincreasesof1.8and3.2timesthepresent(2004)volumes.

5 Based on the work by Jeremy Wakeford (Wakeford, 2007).

Population (million)

GDP per capita US$

Carbon footprint (CO2 emissions per

capita (tons))

Carbon intensity (CO2 emissions per

unit of GDP)

South Africa 46.6 10,715 9.8 0.99

Sub-Saharan Africa 781.3 1,945 1.0 0.57

USA 293.6 40,971 20.6 0.57

OECD 1160.5 28,642 11.5 0.45

World 6389.3 9,348 4.5 0.55Source: UNDP, 2007

Table 7.1. Comparative carbon emissions 2004

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Currentmacro-economicpolicydocumentsdonotaddressthechallengeofpeakoil.Thereisnoestimateoftherateofincreaseoftheoilprice,noristhereanassessmentofthepotentialimpactifoilpricescontinuetorise,astheyinevitablywill.Thecombinationofgrowingdemandandrisingpriceswillseverelyundermineeconomicgrowthandpovertyreductionmeasures.Itfollowsthateithergrowthratesmustbereviseddownwards,ormassiveinvestmentsarerequiredtosubstantiallyreduceconsumptionofimportedhydrocarbons.

7.4 Energy6

Justover70%ofSouthAfrica’senergyisderivedfromcoal.Thisisalong-termtrendandwillmorethanlikelycontinuewellintothefuture.Theremaining30%isderivedfromoil(20%),gas(1.5%),nuclear(3%)andbiomass(5.1%).Significantly,coal-to-liquidandgas-to-liquidtechnologiesaccountfor30%and8%respectivelyofthetotalliquidfuelsupply.

Cheapenergy(possiblythecheapestintheworld)andabundantcoalsupplieshavemadeitpossibletobuildanenergy-intensiveeconomy.Table7.3revealshowresourceintensivetheSouthAfricaneconomyiscomparedtootherpartsoftheworld.

Thebiggestfuturechallengefortheenergysectoristhesteadygrowthinelectricity

6 Based on AGAMA Energy, 2005.

demandwithoutaclearplantoincreasegenerationcapacity.Expandingaccesstoelectricitybypoorhouseholdsandtheimperativesofagrowingeconomyputincreasingpressureonsupply.In2006–07rollingblackoutsacrossthecountrytookplacebecausereservemarginsdroppedbelowasafelevelof15%exacerbatedbyinefficientmanagementofcoalsupplyandmaintenanceregimes.

Todatepolicymakershavepaidlittleattentiontolarge-scaleenergyefficiency(EE)andrenewableenergy(RE)interventions.TheWhitePaperonRenewableEnergy(November2003)identifiedaREtargetof4%by2013anda12%reductioninenergyintensityby2014.Scenario-buildingexerciseshaveprovidedevidencethatupto50%ofSouthAfrica’sfutureenergysupplycouldcomefromREby2050.However,forthistoberealized,planningandinvestmentsneedtoproactivelyfocusonthislong-termtrend.Inotherwords,thereisagreementthattheenergysectormustbedematerialized,butnoagreementonhowfarthisshouldgooronthebalancebetweenREandEE.

Intheshortterm,immediateelectricitygenerationneedswillbemetbyre-commissioningoldcoal-firedpowerstations.Thelong-termfinancialviabilityandsecurityofnuclearpowerremainsuncertain.Short-termhigh-impactinvestmentsinprovenwindandsolarpowertechnologiescouldrapidlycreatethebasisforalong-termsupplyofrenewableenergy.

Low growth

rate (3%)

High growth

rate (6%)

Year 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2024 2024

Petrol 10,153 10,566 10,798 10,883 10,861 10,396 10,340 10,335 10,667 10,985 19,840 35,230

Diesel 5,432 5,759 5,875 5,959 5,993 6,254 6,488 6,831 7,263 7,679 13,869 24,628

Jet fuel 1,368 1,601 1,777 1,877 1,995 2,020 1,924 1,967 2,099 2,076 3,749 6,658Source: Cairncross, 2005

Table 7.2. Past and projected consumption of transportation fuels (million litres/year)


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7.5 Water and sanitation7

Withanaverageannualrainfallof497mmSouthAfricaisadrycountry.And,98%ofavailablewaterresourceshavealreadybeenallocated.Thismeansthat“SouthAfricasimplyhasnomoresurpluswaterandallfutureeconomicdevelopment(andthussocialwell-being)willbeconstrainedbythisonefundamentalfactthatfewhaveasyetgrasped”(Turton,2008,p.3).Thecountrythereforehasnofurther‘dilutioncapacity’whenitcomestoabsorbingeffluentsinitswaterbodies.TheJohannesburg-Pretoriacomplex–SouthAfrica’smostsignificanturban-economicconurbation–islocatedonawatershedwhichmeansthatoutflowsofwastewaterpollutethewaterresourcesthisconurbationdependson.TheresultisthatafterChina,SouthAfrica’snationalwaterresourcescontainsomeofthehighesttoxinlevels,inparticularmycrocystinforwhichnosolutioncurrentlyexists.Cyanobacteriablooms,causedbyend-of-pipeNPKloads,threatennationalwatersecurity.Inter-basinwatertransfershavedegradedtheecologicalintegrityofaquaticsystems,andradionuclides,heavy

7 This section relies on the following documents: Turton, 2008; Department of Water Affairs and Forestry, 2006; Republic of South Africa, Department of Water Affairs and Forestry, 2004; Republic of South Africa, Department of Water Affairs and Forestry, 2002; Ashton & Turton, 2008).

metalsandsulphatesfromminingactivitieshavepollutedvaluablewaterresources.Inshort,thecombinationoflowaveragerainfall,overexploitationandre-engineeredspatialflowshaveledSouthAfricatoanimminentwatercrisisinquantityaswellasquality.

AccordingtotheDepartmentofWaterAffairs,in2000therewasstillsurpluscapacityofaround1.4%.Recentmodelsindicatethatveryseriouswatershortagescanbeexpectedbyasearlyas2013.Significantly,itistheurbananddomesticsectorwhereconsumptionincreasesaresettotriple:

Table7.4graphicallyrepresentstheresourceusecrisisthatwillbegeneratedbyeconomicgrowthandpoverty

TPES/capita TPES/GDP TPES/GDP

Elec. consumption per capita

(national average)

Toe/capita Toe/ 000 1995 US$ Toe/ 000 PPP 1995 US$ kWh/capita

South Africa 2.51 0.63 0.29 4,533

Africa 0.64 0.86 0.32 503

South Korea 4.10 0.31 0.30 5,901

Indonesia 0.69 0.70 0.25 390

Non-OECD 0.96 0.74 0.28 1,028

OECD 4.78 0.19 0.22 8,090

World 1.67 0.30 0.24 2,343Key: TPES = total primary energy supply, toe = tons of oil equivalent, PPP = purchasing power parity (i.e. adjusted to remove distortions of exchange rates), GDP = Gross domestic product.Source: SARB Quarterly Bulletin

Table 7.3. Energy intensities

Sector

m3/year

1996 2030

Urban and domestic 2,171 6,936

Mining and industrial 1,598 3,380

Irrigation and afforestation 12,344 15,874

Environmental 3,932 4,225

Total 20,045 30,415

Table 7.4. Historical water consumption (1996) and projected water demand (2030) by sector

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eradicationifexistingwatermanagementsystemsandprocessesremainunchanged.

Thereisscopeformajorwatersavingintwosectors–urbananddomesticuse,andtheagriculturalsector.Recyclingurbanwastewaterisanurgentpriority.Forexample,between40%and50%ofallwaterpipedintohouseholdsisusedtoflushtoilets.Yetitistechnicallypossibletoflushtoiletsfromon-sitegreywaterflows(inparticularforlargemiddleclasshomes),orvianeighbourhood-levelclosedloopsystemsthatrecyclewaterbacktohouseholds.Rainwaterharvestingandgreywatersuppliesforirrigationalsohavepotential.Thesecondmajorwater-savingpriorityisinagriculture,especiallyincombinationwithorganicfarmingmethodsthatsimultaneouslyrebuildthebiologicalcapacityofsoilsandmoistureretentioncapacityinthetoplayers.

Thegovernmentisawareoftheseseverewatersupplyconstraints.Inher2007BudgetSpeech,theMinisterofWaterAffairsandForestrydedicatedconsiderablespacetoherwaterefficiencycampaign,withapparentemphasisonregulationsandtightercontrols.Butunlessmoreimmediateanddrasticactionistaken,economicgrowthwillsoonbeunderminedbywatershortagesandrelateddysfunctionalities(likesalinizationofaquifers,etc,).Theresearchresultsareclear:availablephysicalextracapacityin2000wasatmost1.7%higherthanexistingrequirements,whilegrowthinwaterdemandcouldbeasmuchas25%higherthanavailableyieldby2025.Evenifdemandonlyincreasesby1%peryear,by2014theeconomywillalreadybefacingsevereshortagesonanumberoffronts.By2019,watershortageswillhavepulledtheeconomyintoadownwardspiraloflowgrowthandgrowingsocio-economicinequalities,withassociatedmini-’resourcewars’overwatersupplies.

SophisticatedmodellingworkbyUniversityofPretoriaresearchersshowsthata

combinationofphysical,fiscal,institutionalandtechnologicalinterventionscouldturnthispotentialdisasterintoamajoropportunityforeffectivesustainableresourceuse(Blignaut,2006).However,forthistooccur,waterresourcesneedtobeseenasa‘bindingconstraint’,andthegovernmentmustseriouslyinvestinthesustainableresourceuseapproachadvocatedbyallleadingresearchersandpolicymanagersinthewaterresourcesector.

7.6 Solid waste8

Solidwasteincludesallmunicipalandindustrialwaste.Asof2005,thesolidwastesystemmanagedthedisposalof20Mt9ofmunicipalsolidwaste(MSW),450Mtofmining-relatedwastesand30Mtofpowerstationashes.

MSWquantitiesaregrowingfasterthantheeconomyinmanycities.10Thetypicaldailyaverageof2kg/personis3–4timesthatinmanyEuropeancities.Boththequantityandnatureofsolidwastediffersconsiderablyacrossthesocio-economicspectrum.Peopleininformalsettlementsgenerateonaverage0.16kgperday,whereasover2kgperdayisnotunusualinaffluentareas.Foodandgreenwastemakeup35%ofwasteinaffluenthouseholds,comparedwith20%forpoorhouseholds.InCapeTown60%ofindustrialwasteisrecycled,comparedtoonly6.5%ofresidentialandcommercialwaste(amongthelowestintheworld).ThereisnoreasontobelievethatthesituationisverydifferentinotherSouthAfricancities.

Whilemanycountrieshavemovedawayfrom‘disposal-to-landfill’astheprimarymeansofsolidwastemanagement,inSouthAfricathelargebulkofMSWisdisposedofinlandfillsitesspreadoutacrossthecountry.Althoughnationalcosts

8 Based on Von Blottnitz, 2005.9 Mt =1 million metric tonnes or 1 billion kg.10 For example, in Cape Town MSW is growing by 7% per year.


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havenotbeencalculated,theyareprobablysimilartothoseinCapeTownwherethecostofmanaginglandfills–andrelateddumping–doubledbetween2000and2004.

Growthinthemineralsandcoal-basedenergysectordirectlyleadstoincreasedindustrialwasteswithlimitedproductiverecyclingandreuse–aclearexampleofthewayunsustainableresourceuseiscoupledtogrowthandpovertyreduction.Yettechnologiesandprocessesfordecouplingwastefromgrowthandpovertyeradicationaresimple,lowcostandextensivelyusedthroughouttheworld.

Wasterecyclingrepresentsoneofthemostimmediate,tangibleandlow-costinvestmentsindematerializationavailable.Itsavesoncapitalcosts,createsjobs,andforcesthemiddleclassestotakegreaterresponsibilityfortheresourcestheythrow

away.Itisalsonormallyahighlycompetitivesector,withsophisticatedvaluechainswithrespecttoresourceslikeusedengineoil,usedvegetableoils,awiderangeofplastics,buildingrubble,organicmatterforcomposting,glass,cans,paper,etc.Numerousstudiesconfirmthatrecyclinghasverypositiveeconomicbenefitswithrespecttojobcreation,manufacturingandtechnologyandinnovation.Furthermore,wasterecyclingalsohassignificantexportpotential.

TheNationalIntegratedWasteManagementActadoptedbyParliamentin2009willforceeverylocalgovernmentauthoritytoprepareanIntegratedWasteManagementPlanwithdefinedtargetsforrecycling,thuspavingthewayforarecyclingrevolutioninSouthAfricancities.ThestageisnowsettomoveSouthAfricadecisivelyintoapost-disposalapproachwithrespecttoMSW,withaspecialfocus

$!!$" $!!)" $!#$" $!#)" $!$$"

Figure 7.8. Solid waste disposal in millions of tons in Cape Town, 2002–2027

a Excludes effect of tourism and industry growthNote: Effect/implications of waste minimization: Roll-out/implementation must create infrastructure, educate and make all aware, encourage public/industry participation, facilitate creation of recycling market through partnerships (industry, NGOs, CBOs), enable job creation through recycling rather than clean-ups, and enforce stricter standards.Source: Adapted from City of Cape Town, 2007

WasteMillion tons

10

8

7

5

4

02002 20222007 2012 2017

● Measured landfill● Projected landfill waste growth at 7% per annum

with no inverventionsa

● Plan for 'zero waste' targets 20% reduction in waste generated and 10% reduction in waste to landfill

9

6

3

2

1

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onmiddleandhighincomeconsumers.TheMineralandPetroleumResourcesDevelopmentAct(2002)makesspecificprovisionforwastemanagementandpollutioncontrolintheminingsector.ThisAct,togetherwiththeemergingMSWapproach,providesthebasisfortheemergenceofavastdecentralizednetworkofmarket-drivenandcommunity-basedrecyclingbusinesses.InadditiontheNationalCleanerProductionStrategyisbeingbeefedup,establishingincentivesandlegalrequirementstostimulatecleanerproductionsystems(CPS)inthebusinesssector–particularlyminingandconstruction–withaspecialfocusoninvestmentsinrecyclingenterprises.

7.7 Soils11

SouthAfricafallswithintheso-called‘thirdmajorsoilregion’typicalinmid-latitudesonbothsidesoftheequator.TheresultisthatSouthAfricaisdominatedbyveryshallow

11 Based on Laker, 2005.

sandysoilswithsevereinherentlimitationsforagriculture.Only13%ofthelandisarableandjust3%highpotentialland.Theresultisoverexploitationandtheuseofinappropriatefarmingmethods,asthenationtriestoexceeditssoils’capacitytomeetgrowingfoodrequirements.Allthishasresultedinfar-reachingnationwidesoildegradation.

Watererosionremainsthebiggestproblem,responsibleforthelossofanestimated25%ofthenation’stopsoilinthepastcenturyandcontinuingstill.Otherfactorsinclude:winderosionaffecting25%ofsoils;soilcompactionduetointensivemechanizedagriculture;soilcrustingcausedbyoverheadirrigationsystems;acidificationofmorethan5millionhectaresofarableland,causedbypoorfarmingpracticesparticularlyincorrectfertilizerandinadequatelimeapplications;soilfertilitydegradationresultingfromannualnetlossesofthethreemainplantnutrients(Nitrogen,PhosphorousandPotassium);soilpollutioncausedbyvarioushumanpractices;urbanization

© D

usan

Kos

tic/D

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oftenspreadingacrosshigh-valuearablelandontheoutskirtsofcities.

Oncedegraded,thereislittlepotentialforrecovery.Areaswheredegradationislimitedmustbeprioritizedsothateffortscanbefocusedonpreventionviaappropriatefarmingpractices.Reversingtheabovetrendswillrequirelocallytrainedsoilscientistswhorecognizethatsoilconditionsareunique(becausetheyare‘thirdmajorsoilregion’soils)andthatthereforethenationcannotcopysolutionsgeneratedincountrieswithadifferentsoilprofile.Location-specifictechnicalsolutionsarerequiredasblanketsolutionshaveprovenunworkable.Locallytrainedsoilscientistsmustworktogetherwithlocalleaderfarmersviahorizontallearningpractices.ThishasworkedinIndia,CubaandmanyotherplacesinthedevelopingworldandisurgentlyrequiredinSouthAfrica.

7.8 Biodiversity12

SouthAfricaisgloballyrecognizedasthethirdmostbiologicallydiversecountryintheworld,yetthisdiversityisoneofthemostthreatenedontheplanet.Significantly,thisconcernsnotjusttheprevalenceofplantandanimalspecies,butalsocriticalecosystemsthatprovidevitalservicestohumansociety.

12 Based on Driver et al., 2005.

AlthoughSouthAfricahasinvestedenormouspublic,privateandcommunityresourcesintheexpansionofprotectedareas,conservationareasandreserves,inthefuture,theinnovativepartnershipswillberequiredtoensurethattheburdenforallthisisnotcarriedentirelybythefiscus.TothisendtheProtectedAreasActoffersauniqueopportunity.Itprovidesforanyland,includingprivateorcommunal,tobedeclaredaformalprotectedarea,co-managedbythelandowner(s)oranysuitablepersonororganization.Thismeansthatformalprotectedareastatusisnotlimitedtostate-ownedland,andthatgovernmentagenciesarenottheonlyorganizationsthatcanmanageprotectedareas,openingthewayforarangeofinnovativearrangementsnotpreviouslypossible.Arelatedchallengeistomakethelinksbetweenprotectedareadevelopment,sustainabletourism,andbenefitstosurroundingcommunitieswhoshouldbekeystakeholdersinprotectedareas.

TheNationalEnvironmentalManagementActprovidesforacomprehensiveregulatoryframeworkforprotectingkeyenvironmentalresources.ThecoreinstrumentusedtogiveeffecttothisActisEnvironmentalImpactAssessment(EIA).AlthoughdevelopmentprojectsmustbesubjectedtoanEIA,thefocusisoncostsofpollutionandenvironmentalimpacts,andnotresourceinputsandprices.Thisdoesnotprovideasufficientbasisfordecouplingoverthelongrun.

Officially classified as threatened Main issues and causes

Terrestrial ecosystems 34% degradation of habitat, invasion by alien species

Freshwater ecosystems• Wetlands destroyed• Fish threatened

82%50%36%

pollution, over-abstraction of water, poor water course condition

Marine ecosystems• Estuaries endangered

65%62%

climate change, unsustainable marine harvesting, seabed destruction by trawling, coastline urbanisation, marine pollution

Source: Driver et al., 2005

Table 7.5. Key threats to South Africa’s ecosystems

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7.9 Policy responses

RecentyearshavewitnessedanemergingtrendinSouthAfrica’snationalpolicydiscoursecallingformoreresponsibleuseofnaturalresources.Growingnumbersofpolicystatementsacknowledgethatthecountry’seconomicgrowthanddevelopmentpathistooresource-intensiveandthatthisneedstochange.However,thiswayofthinkingisbynomeansadominantparadigminpolicymakingcircles.Section24(b)ofSouthAfrica’snewConstitutioncommitsthestateto“secureecologicallysustainabledevelopmentanduseofnaturalresourceswhilepromotingjustifiableeconomicandsocialdevelopment”.ThisprovidesthepointofdeparturefortheNationalFrameworkforSustainableDevelopment(NFSD)adoptedinJune2008(RepublicofSouthAfrica,DepartmentofEnvironmentalAffairsandTourism,2007).However,keymacro-economicpolicydocumentsmakenoreferencetothisconstitutionalprovision.

7.9.1 Macroeconomic policy versus Section 24(b) of the Constitution

Inlinewithanideologicalshiftsince2002awayfromneo-liberalismtowardsamore‘developmentalstate’approach,theAcceleratedandSharedGrowthInitiativeforSouthAfrica(ASGI-SA)wasadoptedin2006astheofficialeconomicpolicyframework.Itsfocusisonspecific‘bindingconstraints’thatmustbedealtwithviaconcertedstate-coordinatedinterventionsthatruncontrarytotraditionalneo-liberalprescriptions.ASGI-SAliststhefollowingbindingconstraints:currencyvolatility;cost,efficiencyandcapacityofthelogisticsandtransportsystem;shortageofskilledlabour;barrierstoentryandlimitstocompetition;regulatoryenvironment;andstatecapacity.

In2007,thecabinetadoptedtheNationalIndustrialPolicyFramework(NIPF)(RepublicofSouthAfrica,DepartmentofTradeandIndustry,2007).TheNIPFlists

fourpreconditionsforeffectiveindustrializationthroughindustrialsectorinterventions:

• stableandsupportivemacroeconomicenvironment

• adequateskilledlaboursupplysupportedbyappropriateeducationinfrastructure

• existenceoftraditionalandmoderninfrastructure13

• innovationcapabilitiestofosterdevelopmentofdomestictechnologiesandsystems.

NeitherASGI-SAnorNIPFmakeanyreferencetoSection24(b)oftheConstitution.Naturalresourcesandecosystemservicesarenotidentifiedas‘bindingconstraints’suggestingthatnoactionisrequiredtopreventfurtherdegradation.Aviablesetofecosystemsandlong-termsupplyofnaturalresourcesarenotregardedaspreconditionsforsuccessfulindustrialization.Theimplicitassumptionappearstobethatnaturalsystems,withinwhichthesocio-economicsystemisembedded,areintactanddurable.

7.9.2 National Framework for Sustainable Development

TheNFSDwasadoptedbythecabinetinJune2008.Insharpcontrasttomacroeconomicpolicy,itexplicitlyacknowledgesthegrowingstressonenvironmentalsystemsandnaturalresourcesfromeconomicgrowthanddevelopmentstrategies,andmapsoutavisionandfive‘pathways’toamoresustainablefuture:

• enhancingsystemsforintegratedplanningandimplementation

13 Traditional infrastructure includes transport, electricity, water, while modern infrastructure refers to wireless, satellite, broadband, fixed line and mobile telecommunication networks.


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• sustainingourecosystemsandusingresourcessustainably

• investinginsustainableeconomicdevelopmentandinfrastructure

• creatingsustainablehumansettlements

• respondingappropriatelytoemerginghumandevelopment,economicandenvironmentalchallenges.

TheNFSDcommitsSouthAfricatoalong-termprogrammeofresourceandimpactdecoupling.TheGovernmenthasresolvedthattheNFSDwillbeconvertedintoafull-blownNationalStrategyforSustainableDevelopmentbytheendof2009thatwillincludespecifictargets,commitmentsandbudgetallocations.

7.9.3 Growing influence of sustainability thinking

InJuly2008,theSouthAfricancabinetendorsedtheoutcomesoftheLongTermMitigationScenario(LTMS)process,whichexploredoptionsforclimatechangemitigationinamulti-stakeholderexercise.ReinforcingtheNFSD,theLMTSrecommendedtheRequiredbyScienceScenariothatenvisagesa30–40%reductioninSouthAfrica’semissionsby2050.

InApril2006theNationalTreasurypublishedforcommentaremarkabledocumententitledAFrameworkforConsideringMarket-BasedInstrumentstoSupportEnvironmentalFiscalReforminSouthAfrica.Thedocumentdefinesanenvironmentaltaxasa“taxonanenvironmentally-harmfultaxbase”(RepublicofSouthAfrica,NationalTreasury,2006ii(emphasisinoriginal))andexaminesallexistingenvironmentaltaxes,chargesandlevies,14whichcombined

14 Transport fuel levies (General Fuel Levy, Road Accident Fund Levy, Equalisation Fund Levy, Customs and Excise Levy); Vehicle Taxation (Ad Valorem Customs and Excise Duty, Road Licensing Fees); Aviation Taxes (Aviation Fuel Levy, Airport Charges, Air Passenger Departure Tax); Product Taxes (Plastic shopping bags levy); Electricity (NER Electricity Levy; Local Government Electricity Surplus); Water (Water Resource Management Charge, Water Resource Development and use of Water Works Charge, Water Research Fund Levy), and Wastewater (Wastewater Discharge Charge System - proposed).

accountforapproximately2%ofGDPandjustunder10%oftotaltaxrevenue.Thereportsuggeststhatinlightofthesustainabledevelopmentchallenge,taxshiftingisrequiredsothattaxesleviedon‘bads’(suchaspollution)canbeincreasedandtaxeson‘goods’(suchaslabour)reduced.This,thereportargues,isthe‘double-dividendhypothesis’–“minimisingtheburdenofenvironmentally-relatedtaxesontheaffectedsectors,whilstcreatingtherequiredbehaviouralincentivestoachievecertainenvironmentaloutcomes”(RepublicofSouthAfrica,NationalTreasury,2006v).Putdifferently,taxesfromunsustainablepracticesshouldincrease,andbere-investedinmoresustainablepractices.

ItisnoteworthythattheNationalTreasuryperspectivedescribedaboveiseffectivelyacommand-and-controlperspectivefocusedonimpacts.Thisisdifferentto‘upstream’interventionsthatfocusonprimaryresourceinputsandprices.Nevertheless,thisreport,plusthegatheringinfluenceoftheNFSD,didleadtothefollowingstatementbytheMinisterofFinanceduringhisBudgetVotespeechin2008:

“Wehaveanopportunityoverthedecadeaheadtoshiftthestructureofoureconomytowardsgreaterenergyefficiency,andmoreresponsibleuseofournaturalresourcesandrelevantresource-basedknowledgeandexpertise.Oureconomicgrowthoverthenextdecadeandbeyondcannotbebuiltonthesameprinciplesandtechnologies,thesameenergysystemsandthesametransportmodes,thatwearefamiliarwithtoday.”

TheabovequoteistheclearestandmostradicalstatementbyaseniorSouthAfricanpoliticiantodateabouttheneedforfar-reachingmeasurestodecoupleratesofgrowthfromratesofresourceconsumption.Nevertheless,thereareotherMinisterswhohaverespondedtoresourceconstraintsintheirrespectivesectorsbyemphasizingtheneedfor

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sustainableresourceuseapproaches.TheseincludetheMinisterofWaterAffairsandForestrywhohasadmittedthatby2013SouthAfricawillfaceseverewatershortagesifalternativesarenotimplemented;theMinisterofMineralsandEnergywhohasfinallyacknowledgedthatSouthAfricaneedsarapidlyexpandingrenewableenergysector;15andtheMinisterofHousingwhowantstoseealllow-incomehousingsettlementssubsidizedbygovernmenttoincludesustainabledesignelementssuchascorrectorientation,insulation,publictransportlinks,recycling,energyefficiencyandrenewableenergysupply.Significantly,theMinisterofScienceandTechnologyhascalledforaten-yearscienceinvestmentplanthatwillincludeastrongfocusoninnovationsforsustainability,withdecouplingreferredtoasaspecificgoalforinnovationresearchandincentives.TheDepartmentofEnvironmentalAffairsandTourismhascompletedtheNationalCleanerProductionStrategy.Thisdocumentlaysdowntheframeworkthroughwhichdifferentstakeholders(government,industryandcivilsociety)willparticipateinensuringthatSouthAfricaachieveshergoalsonsustainableproductionandconsumption(DEAT,2005b).

7.10 Decoupling – opportunities for action

PerhapsthemostsignificantprospectfordecouplinginSouthAfricaisthemassiveinjectionofpublicandprivateinvestmentfundstodriveavastmulti-yearinfrastructureinvestmentprogrammeworthnearlyR800billion.Acornerstoneofthegovernment’slong-termgrowthstrategy,thisnationalprogrammeoffersauniqueopportunitytoadvancetowardsamoresustainablefuture.Thereisnodoubtthatpublicinvestmentininfrastructureisapowerfulwaytoensurethatgrowthsetsup

15 A renewable Energy Feed-In Tariff was introduced in 2009, as well as a new Air Quality Management Act.

theconditionsformeaningfulpovertyreduction.Buttherearetwokeyquestions.Thefirstiswhethertheseinvestmentsaddressthechallengesdiscussedabove.Therearesomeobviouspositiveinvestments,suchasinpublictransport,upgradingoftherailinfrastructure,andsustainableapproachestohousing.Thesearealreadygovernmentpriorities.Therearealsosomeobviousgaps,e.g.investmentsinsoilrehabilitation,waterandsanitation,airqualityandrenewableenergyonscale.

Thesecondquestionislessaboutwhatisbeingbuilt,butratherabouthowitwillbebuilt.Thereisanenormousopportunitytodesignandbuildlow-carboninfrastructuresandbuildingsthatcouldcontributesignificantlytodecoupling.Furthermore,thewayinfrastructuresandbuildingsaredevelopedonscalecouldbethesinglebiggestcatalysteveravailabletodrivealong-termcommitmenttosustainableresourceusethat,inturn,freesupresourcesforpovertyeradication.Finally,doingthingsinnewwaysopensupawiderangeofnewvaluechainsthatcouldbeexploitedbynewentrantsintothesectorwithmajoremploymentcreationopportunities.Initsresponsetotheglobaleconomiccrisis,thegovernmenthasacceptedthat‘greencollarjobs’willplayarole.Thebox,opposite,providesanoverviewoffeasibleandaffordablestrategicmeasures,followingpriorityheadingsusedintheASGI-SApolicydocumenttoprioritizeinvestmentfocusareas.

7.10.1 Decoupling opportunitiesThesummarybelowisanelaborationofthenationaleconomicdevelopmentprioritiesofthecountryaimedatdemonstratingwhatthedecouplingopportunitiesare.Theydonothaveofficialstatus,butmanyarealreadybeingconsideredorcouldbeconsideredwithrelativelyminorshiftsinpolicy.


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7.11 Conclusion

Thedominanteconomicparadigminpost-apartheidSouthAfricahastodatefailedtorecognizeandaddressawiderangeofunderlyingresourceconstraintsthatwillalmostcertainlyunderminemanypreconditionsforgrowthanddevelopment.Thiscasestudydemonstratesthatgrowthandpovertyeradicationstrategiesarenotdecouplingfromunsustainablenaturalresourceuseandexploitation.Reversingthistrendwillrequirepolicyframeworksand

interventionsthatarecurrentlyabsentfromnationaleconomicpolicydocuments.

ThereisbroadconsensusaroundtwoeconomicandsocialchallengesforSouthAfrica’sseconddecadeofdemocracy:

• howtoboostgrowthto6%andensureamoreequitabledistributionofwealth;

• howtoeradicatepoverty,withspecialreferencetotheMillenniumDevelopmentGoals.

Energy• Increase Energy Efficiency by 20–30%: boost Demand-Side Management fund, remove it from ESKOM control,

establish efficient decision-making system• Increase Renewable Energy supply to 30% of national requirements from large-scale wind, solar, wave and biomass

plants by Independent Power Producers using Feed-In Tariffs, and incorporate solar energy into all residential developments

• Promote solar roof tops: co-finance one million new houses with solar roof tiles and water heaters• Create financial incentives and terminate disincentives via price-mechanisms for investment in energy efficiency

innovations

Water and sanitation• Switch from building dams to sustainable ground-water exploitation and management (including storage and

aquifer replenishment)• Invest in reducing water loss from leakages to below 10% • Reduce domestic water consumption by 40% via mandatory use of water efficient household fittings, grey water

recycling and rainwater harvesting• Build neighbourhood-level plants that recycle grey water for toilet flushing, capture methane gas for energy

generation and capture nutrients for reuse in food production and greening• Invest in technology innovations to reverse the qualitative degradation of national water resources

Transport and logistics• Increase investments in urban public transportation systems, especially Bus-Rail-Transit • Shift long distance freight transport from road to rail• Reduce dependence on oil via a shift to electric cars, hydrogen and ecologically sustainable biofuels

Housing and social infrastructure• Eliminate housing backlog through construction of 5 million low-income houses with sustainable design and close

to centres of employment• Increase densities from 15–20 dwelling units/hectare to a minimum of 35–45 dwelling units/hectare via smaller plot

sizes, multi-story living, and neighbourhood designs that minimize private vehicle transportation• Implement municipal ‘green house’ regulations governing all private, public and social infrastructure

Local Economic Development (LED) infrastructure• Substantial investment in institutional development for LED as envisioned in the LED Framework for South Africa

(2006)

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The sustainability perspective means there now is a third challenge, and due to the adoption of the NFSD and LTMS, this is being recognized:

• how to decouple growth rates and poverty eradication from rising levels of natural resource use and waste (commonly referred to as ‘dematerialization’).

Many of South Africa’s leading scientists have for some time been saying that

economic growth policies are premised on incorrect assumptions about the health and durability of its natural resources and ecosystem services. Aligning economic policy with Section 24 (b) of the Constitution is not simply about preserving the environment. As other countries have experienced, it is also about preventing wasteful expenditures on avoidable system failures. But above all, it can also be about the creation of new opportunities for driving non-material forms of growth that improve quality of life for all, forever.


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China8

FourdecisivefactorsdetermineChina’senvironmentalandecologicalstatus.First,thecountry’shighlydiversebutgenerallyfragileecologicalsystems:

onethirdofitslandisaridordrought-prone,andonefifthisconsideredecologicallyfragile(SEPA,2004).Second,itshugepopulation:currentlyat1.3billion,projectedtoreach1.5–1.6billionby2030,stabilizingataround1.4billionby2050(HeJuhuang,2001).Third,itslimitednaturalendowmentonapercapitabasiscomparedtoworldaverages.1Fourth,itseconomicgrowth

1 In per capita terms, China’s mineral resources are 58% of the world average; its water resources 25%; its arable land 33%; its forest cover just 21% (http://zhidao.baidu.com/question/19598240.html?fr=qrl3).

path:giventhefirstthreefactors,China’spatternandpaceofgrowthhasbecomethemostcriticalvariableinrelationtoitsenvironment.

Sincethelaunchofreform30yearsago,Chinahasgonethroughfourstagesofeconomicdevelopment(Figure8.1)(WangMengkui,2005).Thefirstwascharacterizedbyeconomicrecoveryfeaturingruralreformandrapidagriculturaldevelopment.Thesecond,fromthemid-1980s,witnessedtheriseofnon-agriculturalindustriesespeciallytextileandlightindustries.Inthethirdstage,theoutputoftheheavy-chemicalindustrybegantoovertakethatof

Source: China Statistics Yearbooks, 1979–2009, the People’s Republic of China

Figure 8.1. The process of economic development in China since 1978

1978 1983 1988 1993 1998 2003 2008

Percent

50

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1978 20081983 1988 1993

● Urbanization rate (%)● GDP, total (trillion RMB)● GDP, change (%)

1998 2003

GDPTrillion RMB

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Agricultural boom Light industry boomPre-heavy

chemical industryHeavy chemical

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lightindustry.Thefastestgrowingsectorswereinenergyandrawmaterials,suchasoilandnaturalgas;infrastructuresuchasroads,portsandpower;andhouseholdappliances.Thisperiodwasaccompaniedbyrapidurbanization.Inthefourthstage,post-2000,theheavy-chemicalindustrybecamethemajordriverforgrowth.

Heavy-chemicalindustriesaremajorconsumersofenergyandresources,andsignificantpolluters.Startinginthelate1990s,therefore,Chinaenteredaneraoftremendousenvironmentalchallenges.Furthermore,China’sindustrializationistakingplaceinahighlycompressedandacceleratedtimeframewhencomparedtothatofEurope,NorthAmericaandevenJapan.Whilethishasbroughtaboutfast-growingmaterialwealthforChinesepeople,italsomeansthatChinafacesarapidaccumulationofseriousenvironmentalproblems.


Calculatedincontemporarypricesandcurrentexchangerates,2overthe30yearsfrom1978to2008,China’sGDPhasexpandedbyanannualaverageof9.8%toUS$4.4trillion(PRC,1979;2009).Thisgrowthhasbeennon-linearwithanacceleratedrateofgrowthinlateryearsaccompaniedbymassivedischargeandemissionofpollutants.Chinaisnowtheworld’ssecondlargestCO2emitter,andmaytoptheworldinSO2emissionsandChemicalOxygenDemand(COD)discharge.CODdischargeinChinahasexceededtheenvironmentalcarryingcapacityby80%andthepictureofSO2emissionsissimilarlygrave(CCICED,2007a;MEPC,2009).Ontheresourceinputside,resourceintensity3perunitofGDPisabout90%higherthantheworldaverage(ChineseAcademyofSciences,2006),whileenergyefficiencyis10%belowthatofthe

2 US$1 against RMB 6.8337 in February 2009.3 Including freshwater, primary energy, steel, cement and common

non-ferrous metals.

developedworld.TheChinesegovernmentacknowledgesthattheresourceandenvironmentalcostofeconomicgrowthhasbeenexcessive(CPC,2007).

WhileglobalizationhasbroughttangiblebenefitstoChina,ithasalsointroducedaseriouschallengeoftransferredemissionsasaresultofinternationaltradeingoods.Astheworld’smanufacturer,Chinahasbecomeanetexporterofembodiedenergy.4CCICEDestimatessuggestthat,from2002to2006,China’snetexportofembodiedenergyjumpedfrom240milliontonsofstandardcoalequivalent(TCE)to630milliontons,andtheproportionofexportedembodiedenergyinChina’soverallprimaryenergyconsumptionincreasedfrom16%to26%(CCICED,2007a).Thistranslatesinto1,109billiontonsCO2emissions,accountingfor23%ofitstotalannualemissions(2005),orequivalenttothecurrenttotalemissionsofJapan.ThepercentageofSO2emissions,CODdischargeandwaterconsumptionembodiedinnetgoodsexportswere38%,18%and12%respectively(CCICED,2007aand2007b;WuYupingetal.,2008citedinRenYong,2009).


Recognizingthesevariousresourceandenvironmentalconstraintsasamajorbottleneckforachievingitssocialandeconomicstrategies,theChinesegovernmentin2007putresourceandenvironmentalconcernsatthetopofitslistofpriorityproblemstoberesolvedinitsdevelopmentpath,therebyfundamentallyalteringitsdevelopmentphilosophy.The11thFive-YearPlanforEconomicandSocialDevelopment(2006–2010)willgodownasalandmarkinthehistoryofreconcilingenvironmentandeconomy.Theplansets22quantitativeindicatorsofwhicheightare

4 Embodied energy refers to the energy consumed in the production of goods. When goods are exported, their embodied energy is also exported while pollution is left in the producer country; when a country exports more goods than it imports, it may become a net exporter of embodied energy, or from the perspective of pollution trade, it suffers from an ecological deficit.


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mandatorytargets,fiveofthemrelatedtoenvironmentandresources.Themostpivotalandchallengingtargetsarea20%reductionofGDPenergyintensity,anda10%dropinSO2emissionsandCODdischargeby2010(from2005levels).Toensureachievementofthesetargets,theStateCouncilofChinaestablishedtheLeadingGrouponEnergyConservationandPollutionReductionaswellasClimateChange,headedbyPremierWenJiabao,andissuedtheActionPlanforEnergyConservationandPollutionReduction.Anintensiveprogrammewaslaunchedacrossthecountry,andsignificantprogresshasbeenmade.Bytheendof2008,theGDPenergyintensityhadreducedby10.08%,andSO2emissionsandCODdischargehaddroppedby8.98%and6.61%respectively(PRC,2009a).

8.3 Towards an ‘ecological civilization’

Theconceptof‘ecologicalcivilization’wasputforwardbythegovernmentin2007.Fromalong-termstrategicperspective,theideaofecologicalcivilizationelevatesrespectfornatureandenvironmentalprotectiontothelevelofconcernsforhumancivilization.ItillustratesaChinesevisionforgreenandharmoniousdevelopmentthatisdifferentfromitscurrentdevelopmentpathwhichischaracterizedby‘blackpollution’associatedwithindustrialization.Intheshortrun,theideaofecologicalcivilizationistofosteracommonpublicconsensussurroundingthevalueofenvironmentalprotection.Thebuildingofaresource-efficientandenvironment-friendlysocietyisthemid-to-longtermgoal.Inordertomaterializethisgoal,theChinesegovernmenthastakenlarge-scaleandpragmaticactions.Forexample,since2006,ithaslaunchednationwidemandatoryenergysavingandpollutionreductionprogrammestoaddresslowresourceefficiencyandhighintensityofpollution;toaddressthelinearprocess

fromprimaryresourcestoproductsandfurthertopost-consumptionwastes,ithaspromotedcirculareconomypolicies;inresponsetoclimatechange,theNationalActionPlanonClimateChangewasintroducedin2007.Also,inordertoprovidesufficienteconomicincentivestocontrolpollution,thegovernmentstartedtointroduceasystematicpackageofeconomicinstrumentsin2007.

8.4 The circular economy

Chinahasplacedgreatstockintheconceptofacirculareconomy,withparticularfocusonthe3Rprinciples5(RenYongetal.,2005).Anofficialdecisionwasmadetoincorporatethecirculareconomyintothe11thFive-YearPlanonSocialandEconomicDevelopment.Inaddition,theStateCouncilpromulgatedSeveralOpinionsoftheStateCouncilonSpeedinguptheDevelopmentofCircularEconomy.ThiswasfollowedbyexpeditiouscirculareconomypolicypilotprojectsthroughoutChinain2006.Sofar,27provincesandmunicipalities,29recycling-orientedindustrialparksand/orenterprises,89companies,fourtownships,and44industrialparkshavebecomeinvolvedinthesepilotactivitiesundertheoversightofthecentralgovernment.InOctober2008,ChinaenactedtheCircularEconomyPromotionLaw,thefirstofitskindintheworld.TheLawenteredintoforceinJanuary2009,usheringinanewphaseforthecirculareconomy.

Additionalspecializedpolicyframeworksonthecirculareconomyincludethefollowing:

• TheLawonCleanerProductionPromotion;

• Managementandtaxationpoliciesforcomprehensiveutilizationofwastesandusedresources;

5 Reduction, reuse and recyling activities in the processes of resources exploitation, production, distribution and consumption.

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• AssessmentStandardstoevaluateeco-industrialparksandsetoutcodesfortheirestablishment;

• Greenprocurementbygovernmentalagenciesandpublicinstitutions;

• Investmentpoliciesforpilotingthecirculareconomy–aspecialfundtosupportpilotprojects.

8.5 Environmental economic instruments

Chinagenerallyreliesonacommand-and-controlapproachtoaddressingmanagerialissuesofvariouskinds.Thereishowevergrowingrecognitionthatthisapproachisfarfromadequatetosolvetheseriousenvironmentalpollutionproblemsandnon-compliancebehaviourwithenvironmentallaws.Shortcomingsincludetheabsenceofincentivesandflexibilityforbusinesstocontrolitsownpollution,as

wellasnegativeimpactsonsocialjusticearisingfromlawenforcementactivities.Thishasledthestatetointroduceasystemofeconomicinstrumentsthatprovideincentivemechanismsforresourceconservationandpollutionabatement,aswellasend-of-pipepollutiontreatment.Theseinstrumentsfallintothefollowingcategories:

1. Natural resource prices and environmental fees –thisincludesreformofnaturalresourceandenergypricing,paiduseofenvironmentalservices,andfeesforpollutantsemission/discharge,sewagetreatmentandwastedisposal.

MostnaturalresourcesinChinaarepricedbymarketsupplyanddemand.Government-guidedpricingwithsomebasisinmarketconditionsisappliedtoafewstrategicresources,suchaselectricity,petroleumandcoalforpowergeneration.Inbothcases,the

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biggestchallengeinpricingisthefailuretointernalizeenvironmentalexternalitiesofresourceandenergyconsumption.Effortstoreformthesepricingmechanismsareinevitablytime-consumingandcomplicated.Pollutionfeeshavebeenimposedonindustryforover20years;feesforsewageandgarbagedisposalhavebeeninplacefornearly10years.Reformsofsuchfeepoliciesarenowtargetinglevyincreasesandfocusingonwideningtherangeofregulatedentities.Afurtherpolicyconceptcurrentlyunderdiscussionisonewherebyanyacquisitionofenvironmentalresourcesmustnotbeundertakenwithoutpurchasingtheinitialrightofuse.

2. Resources, energy and environmental taxation –thisreferstoalltypesoftaxesaimedatinternalizingtheexternal‘diseconomy’.Itincludestaxesonresources,energyandtheenvironment,aswellasconsumptiontaxesandpreferentialtaxpoliciesapplicabletoresourceconservationandenvironmentalprotection.

Since2006Chinahassignificantlyincreasedtaxratesforseveralmineralresourcessuchasgold,petroleum,andcoal.AconsumptiontaxforfuelwasintroducedinJanuary2009.TaxesonCO2andSO2aswellasonpollution-intensiveproductsarecurrentlyunderstudy.Consumptiontaxesonlargeenginevehicles,disposablewoodenchopsticks,andtimberfloorboardshavebeeninplacesince2006.Thepolicyonmandatorypaymentsforplasticbagshasalsobeenenforced.Preferentialtaxationpoliciestoencourageinvestmentinreuseandrecyclingfacilitiesandpollutiontreatmenthavebeenexpandinginscopeandscale.Since2007,Chinahasimposedadifferentiatedelectricitypricepolicythatworksagainstenergyandpollution-intensiveindustries.Thishasledtomorewidespreadadoptionofflue-gasdesulphurization(FGD).

3. Green trade policy–mainlytargetingproductexportandimporttariffs.Inordertofulfilthemandatorytargetsofenergyconservationandpollutionreductioninthe11thFive-YearPlanningPeriodandreducethetradesurplusatthesametime,tariffsonaconsiderablenumberofproductshavebeenadjustedsince2007.Forinstance,higherexporttariffshavebeenimposedon142energyandpollution-intensivecommodities;exporttariffsonover80typesofironandsteelproductswillbefurtherincreasedby5–10%.Exportrebateswereremovedfrom553energy-and-pollutionintensiveproducts,includingendangeredfaunaandflora.Exportsofenergyandpollution-intensiveproductsreducedbyasmuchas40%bytheendof2007asaresultofthesevarioustariffadjustments.

4. Emissions trading–CollaborativeresearchwiththeUnitedStatesEnvironmentalProtectionAgencyonemissionstradingsincemid-1990shasinvolvedpilotactivitiesinanumberofChinesecities.SO2emissionstradingmarketshavebeenestablishedinsomecitiesinJiangsuandZhejiangProvinces.TheMinistryofEnvironmentalProtectionisstudyingaprogrammeofSO2emissionstradinginthepowersector.

5. Green consumption policy–thisincludesgreengovernmentalprocurementandotherpoliciesassociatedwithconsumptionthatbenefitsresourceconservationandenvironmentalprotection.InOctober2006,theformerSEPAandtheMinistryofFinancejointlypromulgatedOpinionsontheImplementationofGovernmentalProcurementofEnvironmentallyLabelledProducts,requiringpublicorganizationstogivepreferencetoproductswithenvironmentalandenergy-savinglabelswhenundertakingprocurementpaidforfromfiscalresources.Followingthat,bothagencies

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promulgatedtheListofEnvironmentallyLabelledProductsforGovernmentalProcurement.

6. Eco-compensation–alsoknownaspaymentsforecologicalservices.InChinatwotypesofenvironment-relatedbehaviourarenoteffectivelyregulatedbymarket-basedinstruments:(a)ecologicaldamageandenvironmentalpollutionfrommining;and(b)economicactivitiesintheupperreachesofriverbasinsnormallyrestrictedbyregulationsforwatersourceconservation.Intheearly1990s,Chinabegantostudyeco-compensationasasolutiontobothtypesofproblems.Thebasicideaistwofold:usingtheDamagerPaysPrinciple,mineralproductproducersarerequestedtopay;likewise,followingtheUserPaysPrinciple,theregionalongthelowerreachesoftheriverbasinandothersbenefitingfromtheeco-servicesarerequestedtocompensatethoseintheupperreachesfortheirconservationefforts(RenYongetal.,2008).Alargenumberoflocalgovernmentsareactivelyundertakingpilotactivitiesoneco-compensation,withguidanceprovidedbyrelevantgovernmentagencies.Aharmonizednationalpolicyisexpectedtobepromulgatedinthenearfuture.

7. Green fiscal policy–suchasinvestmentinenvironmentalprotection,researchanddevelopmentofenvironment-friendlytechnologiesandproducts.

Consistentwiththe11thFive-YearPlanforEnvironmentalProtection,governmentinvestmentinenvironmentalprotectionfrom2006to2010isexpectedtoreach1.3%ofGDP,representingasubstantialincrease.Theeconomicstimuluspackagelaunchedattheendof2008inresponsetothefinancialcrisisearmarks5%fordirectinvestmentinenvironmentalprotection.Theproportioncouldbemuchhigher,

takingintoaccounttheindirectbenefitsarisingfrom‘greenelements’ofinvestmentsinothersectors.

8. Green Finance–greencredit,environmentalliabilityinsurance,andenvironmentalrequirementsforsecurityfinancingarepossiblythemostimportantinnovationsincetheChinesegovernmentbeganformulatinganewincentivessystemforthepurposeofenvironmentalprotection.

Forexample,undernewprotocolsbanksmaydenyaloanapplication,suspendorwithdrawaloan,orprovidealoanwithprudence,basedonborrowers’significantenvironmentalrisksorenvironmentalnon-compliance.GreencreditpolicyhasbeenimplementedinthemajorityofChina’sprovincesandcities,andisnowdevelopinginlinewiththeEquatorPrinciples.6Similarly,thegovernmentestablishedacorporateenvironmentalperformancereviewsystemforcompaniesenteringthesecuritiesmarket,alongwitharequirementforinformationdisclosureatthetimeofacompany’slisting.And,althoughstillinitsinfancy,aninsurancesystemonenvironmentalliabilitiesisbeingadvocated,withpilotsparticularlytargetingindustrialsectorswitharecordofsignificantpollutionaccidents.

8.6 Decoupling – evidence and strategic actions

The metrics of decoupling Thedistinctionbetweenabsoluteandrelativedecouplinghasbeenmadeearlierinthisreport.Butmeasuringthedegreeofdecouplinginaneconomyremainsathornyissue.TheOECDhaspublishedasetof31indicatorscoveringabroadrangeof

6 The Equator Principles (EP) are a set of environmental and social benchmarks for managing environmental and social issues in development project finance globally. Once adopted by banks and other financial institutions, the Equator Principles commit the adoptees to refrain from financing projects that fail to follow the processes defined by the Principles. (http://en.wikipedia.org/wiki/Equator_Principles).


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environmentalissues(OECD,2002a).Thiscasestudyattemptstodefinea‘DecouplingIndex’,asingleindicatortohelpdepictthedegreeofdecoupling.

TheDecoupling Index(DI)referstotheratioof(1)changeintherateofconsumptionofagivenresource(e.g.water),orintherateofproductionofagivenpollutantemission(e.g.SO2);to(2)changeintherateofeconomicgrowth(GDP)withinacertaintimeperiod(typicallyoneyear).Forexample,ifwedefine

• changeintherateofresourcesconsumptionorpollutionemissionbetweenyeartandyeart-1asPt=(Pt-Pt-1)

Pt-1

• changeintherateofeconomicgrowthasYt=(Yt-Yt-1)

Yt-1

• thentheDecouplingIndexinyeart,DIt=Pt

Yt

Inthecaseofcontinuedeconomicgrowth,namelyYt>0,theDecouplingIndex(DI)mayimplyoneofthreescenariosasfollows:

1. WhenDI>1,itmeanstheincreasingrateofresourceconsumptionorpollutantemissions7keepspacewithorishigherthaneconomicgrowth(seeCaseIinFigure8.2).Inthiscase,nodecouplingistakingplace.Inotherwords,astheeconomygrows,resourceconsumptionandenvironmentaldegradationincreaserapidly.ThisisthefirsthalfoftheKuznetsCurve,or‘climbingstage’(AreaAinFigure8.3).WhenDIequals1,itistheturningpointbetweenabsolutecouplingandrelativedecoupling.Inthestageofabsolutecoupling,ahigherDIvaluemeanshigherdependenceonresourcesbyeconomicgrowth,lowerresourceefficiencyandheavierenvironmentalpollution.

7 Since pollution emission/discharge is related to not only production and consumption activities, but also pollution treatment activities, in this case it refers to pollutants production. But certainly in case studies, pollutants emission/discharge is normally applicable.

Figure 8.2. Scenarios for economic growth and its pressures on environment and resources

Source: Adapted from Figure 1.1

Trends of economic growth

Trends of resources consumption/pollutants emission

Case I: Coupling — DI1

Case II: Relatively decoupling — 0DI1

Case III: Absolutely decoupling — DI1

Economic growth

Time

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2. When0<DI<1,itmeanstherateofgrowthinresourceconsumptionorpollutantemissionsfallsshortofthatofeconomicgrowth.Inthiscase,relativedecouplingistakingplace(CaseIIinFigure8.2andAreaBinFigure8.3).WhenDIrangesfrom0to1,lowerDImeanshigherresourceefficiencyandlowerdependenceonresources.

3. WhenDI=0,itmeanstheeconomyisgrowingwhileresourceconsumptionremainsconstant.Inotherwords,whentheeconomygrowscontinuously,theamountofpollutantsdoesnotincrease.Whenresourceconsumptionorpollutantemissions/dischargedecreaseswhiletheeconomykeepsgrowing,thenDI<0(CaseIIIinFigure8.2).Heretherelationshipbetweenenvironmentandeconomycanbedescribedasthe‘decliningstage’oftheKuznetsCurve(AreaCinFigure8.3),namely,absolutelydecoupling.

8.7 Decoupling trends in China8

ByapplyingtheDImetrictoanumberofresourceinputandimpactvariables,thefollowingpictureemerges.Withrespecttoprimaryenergyconsumptionsince1992,thereisevidenceofrelativedecoupling(Figure8.4).DuringtheAsianfinancialcrisis,GDPgrowthratefellto7.1%in1999fromover10%before1996,whiletotalenergyconsumptiondroppedslightlyfrom13.89trillionTCEto13.38trillionTCE.Asaresult,DIin1997and1998stoodat-0.1and-0.5respectively,representingabsolutedecoupling.From2002,GDPgrowthclimbedbacktoover10%underpinnedbymassivegrowthintheheavy-chemicalindustry.

Asaresult,DIin2003,2004and2005reached1.5,1.6and1.0respectively,representingre-couplingofenergy

8 Data sources of all figures in this section include: China Statistics Yearbook 1990–2007, China Environmental Statistics Yearbook 1990–2007, China Water Resources Statistics Yearbook 1998–2008.

Figure 8.3. Three stages of economic growth and pressures on environment and resources

DI1

DI1

0DI1

DI0

Source: Adapted from Figure 2.8

A B C

Economic growth (Y)

Pressures on natural resources or environment (P)


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1992 1997 2002 2007 1992 1997 2002 2007

1992 1997 2002

Figure 8.4. Trends (left) of energy, GDP and population and the decoupling index (right) of primary energy consumption to GDP growth

Source: China Statistics Yearbooks, 1993–2008, the People’s Republic of China

● GDP● Primary energy consumption● Population

500

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100

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Trends Decoupling index

200

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300

1992 1997 2002 2007

0.5

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–0.5

consumptionandeconomicgrowth.In2006,followingthelaunchofamassiveenergysavingandpollutionreductionprogramme,energyconsumptionbegantorelativelydecouplefromeconomicgrowth.

Amoreremarkabletrendcanbeobservedinfreshwater(Figure8.5).Formostofthelast10years,Chinaachievedabsolutedecouplingbetweenfreshwater

consumptionandeconomicgrowth.During1998–2007,totalfreshwaterconsumptionvariedwithinasmallrangebetween290.1and306.2billionm3.ButintermsofmineralconsumptionChinafaceshugechallenges.Forinstance,thecountry’ssteelconsumptionjumpednearlytenfoldfrom53milliontonsin1990to520milliontonsin2007,andsteelconsumptionperunitofGDPincreasedataratehigherthan

1998 2001 2004 2007 1998 2001 2004 2007

1998 2001 2004

Figure 8.5. Trends (left) of fresh water consumption, GDP and population and the decoupling index (right) of fresh water consumption to GDP growth

Source: China Water Resources Statistics Yearbooks, 1999–2008, the People’s Republic of China

● GDP● Freshwater consumption● Population

250

200

50

0.4

–0.6

0.2

0.0

Indexed 1998=100


100

2007

150

1998 2001 2004 2007

–0.2

–0.4

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1992 1995 1998 2001 2004 2007 1992 1995 1998 2001 2004 2007

1992 1998 2004

Figure 8.6. Trends (left) of industrial waste water and solid waste discharge and GDP and the decoupling index (right) of industrial waste water and solid waste discharge to GDP

Source: China Environmental Statistics Yearbooks, 1993–2008, the People’s Republic of China

● GDP● Waste water● Solid waste

500

400

0

2

–3

1

0

Indexed 1992=100


100

2007

300

1992 2001 2004 2007

–1

–2

1995 2001

200

1995 1998

GDPgrowth(ChinaStatisticsYearbook1990–2007,citedinRenYong,2000).

Ontheimpactside,theemission/dischargeofanumberofpollutantsbegantodecouplefromeconomicgrowthintheearly1990s.Since1992,industrialwastewaterdischargeandsolidwastedischargehaveabsolutelydecoupledina

numberofyears,withtheDIofsolidwastefallingbelow-1severaltimes(Figure8.6).9Progressinthisareaowesmuchtotheimprovedrecyclingrateandproperdisposalofindustrialsolidwaste.

9 China made an adjustment to the scale of data collection for a number of pollutants in 1998, causing irregularities in indicators of industrial solid waste, COD, SO2 and so on. This report therefore does not take into account the statistics in 1998, resulting in broken curves in relevant charts. However, this would not affect the analysis result as a whole.

1992 1995 1998 2001 2004 2007 1992 1995 1998 2001 2004 2007

1992 1998 2004

Figure 8.7. Trends (left) of COD discharge, SO2 emission and GDP and the decoupling index (right) of SO2 emission and COD discharge to GDP

Source: China Environmental Statistics Yearbooks, 1993–2008, the People’s Republic of China

● GDP● SO2 emissions● COD discharge

500

400

0

2

–3

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0

Indexed 1992=100


100

2007

300

1992 2001 2004 2007

–1

–2

1995 2001

200

1995 1998


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Inmostyearssince1992,therehasbeenabsolutedecouplingofCODdischarge(indicatorforwaterpollution)andrelativedecouplingofSO2emissions(indicatorforairpolluttion)(Figure8.7).TheseresultsareinpartlinkedtoChina’stotalvolumecontrolprogrammeforpollutantslaunchedbackin1996.However,anewstageofrapideconomicgrowthandindustriali-zationsince2002hasseenare-couplingofSO2emissionsandeconomicgrowth.

Finally,itshouldbenotedthatthedecouplingofcertainpollutantemissions/dischargedoesnotnecessarilymeanthatenvironmentalqualityhasimproved.Infact,despitethedecreaseoftotalvolumeofsomepollutants,theiremissions/dischargestillfarexceedstheself-purificationcapacityoftheenvironment.Givenhistoricalaccumulation,environ-mentalqualitymayfurtherdeteriorateinChina.

8.8 Actions towards decoupling

Followingadoptionofthe11thFive-YearPlan,theChinesegovernmenthaspursuedathree-prongedstrategytoraiseenergyefficiencyandreducepollution:

1. Industrial restructuring. Themainapproachhereisthephasingoutofoutdatedproductioncapacity.IntheActionPlanforEnergyConservationandPollutionReduction,theStateCouncilofChinasetdetailedtargetsforphasingoutoutdatedproductioncapacityof12energy-intensiveandheavily-pollutingindustrialsectors.10Thisworkisaheadofscheduleandhassofarplayedanessentialroleinenergyconservationandpollutionreduction.

2. Energy conservation programmes and construction of pollution treatment facilities.Thefollowingprogrammes

10 Power, iron, steel, electrolytic aluminium, iron alloy, calcium carbide, coke, cement, glass, paper, alcohol, and citric acid.

areaheadofscheduleintermsoftheirrespectivetargets:

• 10nationalenergyconservationprogrammesinenergy-intensiveindustrialsectorsaimedatconservinganequivalentof240millionTCE.

• Wastewatertreatmentfacilitiesaimedatincreasingdailyurbanseweragetreatmentcapacityby45milliontonsanddailyusageofrecycledwaterby6.8milliontons.

• Installationofdesulphurizationfacilities(FGD)forcoalpowerplants,aimedatreaching0.355billionKilowatts.

3. Strengthened environmental management. Specificmeasuresinclude:

• Makingbetteruseofenvironmentalimpactassessment(EIA)mechanismsandraisingenvironmentalbenchmarkstostoptheaccessofenergy-intensiveandheavily-pollutingindustrialsectors.

• Strengtheningenvironmentalsupervisionandinspection,andstrictapplicationofthe‘regionalenvironmentalapprovalsuspension’11onseriousbreachesofenvironmentallawsandregulations.

• Settingupacompletesystemofstatistics,monitoringandreviewingforpollutionreduction;incorporatingpollutionreductionindicatorsintotheperformancereviewsystemforlocalgovernmentsandtheirmainleaders;andestablishinganaccountabilitysystem.

11 If environmental laws and regulations are seriously breached in a specific jurisdiction, MEP will suspend environmental approval for all new projects within this region.

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• Settingupaspecialfiscalfundforenergyconservationandpollutionreduction.

• Introducingmarket-basedandfiscal-orientedincentiveinstruments.

Circulareconomyactivitiesinvolvingallstagesintheeconomiccycle–resourceexploitation,production,distribution,andconsumption–arebeingimplementedatthreelevels:

• enterprises–focusingoncleanerproductionandrawmaterials’recycling,thusraisingresourceefficiencyandreducingpollution,orevenachievingzeroemission;

• industrialparks–restructuringexistingparksandorganizingnewindustrialparksinlinewith3Rprinciples,focusingonbuildingeco-chainsandsharedinfrastructuresystemsforwaterandenergysupplyandcentralizedwastetreatment;

• regional(e.g.city,province)–usingadualapproach:(a)establishingareuseandrecycleindustry,and(b)amongconsumers,advocatingresourceandenergyconservation,rationalandenvironmentally-friendlylifestyles,greengovernmentalprocurement,energyefficiencycertificationandenvironmentalproductlabelling.

ThecirculareconomyinChinaisatanearlystageofdevelopment,andnosystematicanalysisofitseffectivenesshasyetbeenpublished.However,somepreliminaryfindingsindicatethattheenergyefficiencyandpollutionintensityinthepilotentitiesaresuperiortothoseinotherareas(NDRC,2008).

8.9 One world, one dream – the Green Olympics

In2002,BeijingMunicipalityformulateditsOlympicActionPlanwithanEnvironmentalandEcosystemProtectionPlanasanintegralpartofit.Inthefollowingsevenyears,over160specificprogrammeswereimplemented,resultinginsignificantimprovementsofairqualityandtheenvironmentoftheentirecity.

8.10 Conclusion

Thiscasestudydemonstratesthatthroughconcertedefforts,resourceandimpactdecouplingcanbeachieved.ResourcesandenergyefficienciesinChinahavebeenincreasing,andbothintensitiesandvolumesofmajorpollutantemissionshavebeenfalling.Sincetheearly1990s,arelativedecouplingbetweenprimaryenergyconsumptionandeconomicgrowthhastakenplace,andtherehasbeenanabsolutedecouplingoffreshwaterconsumptionthroughoutmostofthepastdecade.Since1992,industrialwastewaterdischargeandSO2emissionshaverelativelydecoupled,andCODandindustrialsolidwastedischargeshaveabsolutelydecoupledinmostyears.And,throughastrongcommitmenttothe2008GreenOlympicGames,industrialwastewaterandCODdischargesandSO2andNOxemissionsinBeijingallabsolutelydecoupledfromthecity’srapidGDPgrowthsincetheendoflastcentury.Environmentalqualityinthecityhasbeengreatlyimproved.

However,manychallengesforChina’sdecouplingambitionsareevident.Theyincludeahugepopulation;anextensivepatternofeconomicgrowthwithalegacyoflowresourceefficiencyandhighintensityofpollutionemissionscentredonheavy-chemicalindustrialsectors;rapid


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How Beijing fulfilled its commitments to Green Olympics

1. Air pollution control measuresRestructuring Energy Components: Natural gas supply increased from 1.4 billion m3 in 2001 to 4.7 billion m3 in 2007. A total of 16,000 coal boilers below 14MW and 44,000 coal cooking facilities were converted to natural gas. Renewable energies such as biomass, ground thermal and solar energy were promoted; the ratio of cleaner energy in total energy consumption increased from 45.4% in 2001 to 62% in 2007.

Vehicle Emission Control: (a) More stringent standards: Euro II, Euro III, and Euro IV Vehicle Emission Standards and relevant standards on vehicle fuels were introduced in succession. (b) Green Public Bus Fleet: over 10,000 old polluting public buses and 50,000 aged taxis were replaced. By the time of the games, all 20,000 public buses met Euro III emission standards, with 4,000 natural gas buses, the largest fleet of its kind in the world. (c) VOC control: all gas stations, oil tankers and depots in Beijing conducted oil and gas recovery renovation to reduce pollution generated in the fuel storage and refilling process. (d) Building attractive public transport: public bus and metro fares were reduced to attract the public; total mileage of the metro was extended from 40km in 2001 to 200km in 2008; 60km of surface BRT system is now in operation.

Industrial Restructuring: The economy was restructured and the regional development layout readjusted. Processes and enterprises with high energy consumption and heavy pollution were phased out. High-end industries such as new hi-tech industries and modern service industries have been promoted and the ratio of tertiary industries is now over 70% of total GDP. From 2000 to 2007, 200 polluting enterprises were closed, converted to other production or resettled. Beijing’s large-scale coal-fired power plants underwent desulphurization, dust-removal and de-nitrification renovation, making their emission performance levels among the best in the world.

2. Eco-conservationThree green eco-shelter-belts have been established in the mountainous areas, plains, and urban areas, with forest coverage at 51.6%, the urban green coverage at 43% and per capita green area of 48m2.

3. Water environment16.1 billion Yuan were invested in protection of drinking water sources, wastewater treatment and rehabilitation of urban water courses. With the completion of 9 sewage treatment plants, the sewage treatment rate reached 92% in 2007. There are 11 recycling water plants in operation, and 57% of urban water is reused.

4. Solid waste managementSorted collection of urban waste is promoted. Some 23 environmentally-safe disposal facilities have been completed. The waste collection rate in urban districts is 99.9% compared to 80% in suburban areas. Around 96.47% of industrial solid wastes are reused and recycled.

5. Regional cooperationTemporary measures were developed and implemented in cooperation with neighbouring cities and provinces to guarantee good air quality for the Olympic Games. Good air quality was maintained during the Olympic Games fortnight.

Source: Beijing Municipal EPB

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urbanizationandassociatedchangesinconsumptionpatterns;environmentalimpactsinducedbyglobalizationandChina’sstatusasthe‘world’smanufacturingcentre’.

Addressingthesechallengesrequiresacomplexcombinationofconsolidatedpoliticalwillingness,scientificstrategies,andpragmaticandintensiveactions.WiththebirthoftheScientificOutlookforDevelopmentin2003asamilestone,Chinahasmovedintoastrategytransformation

periodofrestructuringtherelationshipbetweenenvironmentandsociety,andgraduallydrawnupavisibleroadmapforreconcilingtheenvironmentandsocio-economicdevelopment.Continuous,focusedandintensiveactionssuchasenergyconservationandpollutionabatement,thecirculareconomy,thenationalclimatechangeprogramme,introductionofenvironmentaleconomicinstrumentsandsoon,arevitalstepstowardsChina’svisionofabsolutelydecouplingafter2030.


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Japan9

TheJapaneseeconomyisverydependentonimportsofnaturalresources,suchasenergy,foodandotherrawmaterials.This

geopoliticalfactoflifemeansthatitsuseofprimarymaterialsistoalargeextentseparatedfromtheecologicalimpactsatthepointoftheirextraction.YeteveninJapantherearevisibleproblemsassociatedwiththeincreasingvolumeanddiversifiednatureofsolidwastes(suchasashortageofdisposalsites,riskofenvironmentalpollutionbywastetreatmentfacilities,illegaldumping,andrisingcosts).

Thespiritof‘Mottainai’isalong-establishedJapaneseconceptmeaningthatitisashameforsomethingtogotowastewithouthavingmadeuseofitspotentialinfull.Theexpressionincorporatesarespectfortheenvironmentthathasbeenhandeddownthroughtheages,andconstitutesasocietalvaluethatisessentialtothenation’seffortstobecomea‘SustainableSociety’assignalledbyaCabinetdecisionon1June2007.1ThisisfindingexpressioninpolicyframeworksandinnovationsthatareuniquelyJapanese.

1 See www.env.go.jp/en/focus/070606.html.

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9.1.1 Limits of resources – lessons learned from oil crises

Inthebeginningofthe1970s,Japan’sdependencyrateonimportedoilwasmorethanthreequartersofTotalPrimaryEnergyRequirement(TPER).Twoworldoilcrisesin1973and1979causedsignificantshockstotheJapaneseeconomyandsociety.Pricesofgoodssoaredandnervousconsumersrushedintothemarkettosecuredailynecessities.Suchreactionscausedaviciouscircleofrisingpricesandshortagesofcommodities.Inthissense,itcouldbesaidthatJapaneseconsumersdidrecognizethe‘limits’ofanoil-dependenteconomy,thoughsomeoftheshort-termchaoticsituationsinthemarketwereobviouslyafunctionofincompleteinformation.

Industriesreactedtothecrisesbyinvestinglargeamountsofmoneytosaveenergyandimproveenergyefficiency.Thereweresignificantlevelsofdecouplingbetweenenergyconsumptionandeconomicproductionbymanufacturingindustriesduringthelate1970sandearly1980s.Whileoildependencyofnationalprimaryenergysupplyhasdecreasedgraduallytolessthanhalf,itisstillhigherthanthatofotherdevelopedeconomies.Energysavingandfuelswitchingasareactiontotheoilcrisesgeneratedfavourablesideeffectswithrespecttoairpollutionabatement.ForthereductionofSOxemissions,itistruethatimpactdecouplingsuchasfluegasdesulfurizationwassuccessful.Inaddition,reductionofoilconsumptionthroughenergy-efficiencyimprovementsandfuelswitchingtonaturalgasandotherprimaryenergysourcesalsosignificantlycontributedtoSOxreductions(MinistryoftheEnvironment,GovernmentofJapan,1992).Thesesuccessescanbetakenasanexampleofthecombinationofresourceandimpactdecoupling.

9.1.2 Limits at the end-of-pipeTheamountofsolidwastegenerationissometimesregardedasaproxyofan

affluentlifestyle,whichimplieshighlevelsofresourceconsumptionthatendsupaswasteproducts.Becauseofitshighpopulationdensity,Japanhasbeenfacingshortagesoflandfillcapacity.Toreducewastevolumesgoingtolandfill,incinerationhasincreasedsignificantly.Inthelate1980’s,theincreaseinmunicipalsolidwastegenerationwasobvious,apparentlycoupledtoeconomicgrowth.Howeverpublicconcernoverrisksofenvironmentalpollutionassociatedwithwastetreatmentprocesseshasmadeitmoredifficulttoexpandthecapacityofwastetreatmentfacilities.Largeinvestmentsweremadetoreplaceoldincineratorswithstate-of-the-artfacilitiesthatsuccessfullydecoupleddioxinemissionsfromthevoluminouswasteincineration.Moreover,inparallelwiththeseeffortsatimpactdecoupling,thegovernmentbegantotakemeasuresfordecouplingwastegenerationfromeconomicgrowth.Therecognitionoflimitsofresourceswasnotthedirect,primarydrivingforcebehindwasteprevention,butithasbeenadvocatedandrecognized,includingthroughtheMottainaispirit,thatwastepreventionandrecyclingcontributestoresourcesaving.

TheJapanesegovernmenthasbeensubmittingannualQualityoftheEnvironmentreports(StateoftheEnvironmentReport)totheDietsince1969.Initsprologuetothe1998annualreport(GoJ,1998),‘limits’toresourceswasexplicitlymentioned,includingareferencetoancientcivilizations.Roughlytranslated,theessenceofthemessagewasasfollows:

“Manyancientcivilizationsdevelopedutilizingtheirrichforestresources,butasdevelopmentproceededandhumanpopulationsincreased,theresourcesweredepletedandthecivilizationsinturndeclinedandperished.

“Unliketheancientcivilizations,theenvironmentalimpactsofwhichwerelimitedtocertainareasonearth,our


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society(civilization)ofthepresentdaystandsatapointofnoreturn.Thereasonforthissituationisthatinaveryshortperiodoftimewehavebeenconsumingnaturalresources,includingfossilfuels,whichhavebeengeneratedandstoredovermillions,ifnotbillions,ofyears.

“Atthesametimewehavebeendisposingofgreatquantitiesofwastes.Thesehaveexceededthenaturalcapacityofecosystemstobreakdownwasteandhavethusplaced,andcontinuetoplace,hugepressureontheenvironment.

“Inordertoavoidsuchenvironmentalload,itisnecessaryfirsttoproperlycontrolandcirculatesubstancesgeneratedbyhumanactivitiesandtoreducetheburdenontheenvironment.Secondly,byunderstandingtheunderlyingmechanismsofnaturewhicharethefoundationsuponwhichallhumanactivitiesdepend,itisnecessarytotransformoursociety,establishinganeconomicandsocialsystemthatisbasedontheprinciplesof‘circularity’and‘coexistence’,whereinhumanactivitiescanbeharmoniouslyadjustedtosuitthemechanismsofnature.”

Basedonthisrecognitionoflimits,policiesfortransitiontoaSoundMaterialCycleSocietyhavebeenformulated.


InspiredbytheEarthSummitinRio(UNCED1992),theJapanesegovernmentenactedtheBasicEnvironmentLawin1993.ThiswasfollowedbyadoptionoftheBasicEnvironmentPlaninDecember1994.Thisplanoutlinestheoverallandlong-termpoliciesofthegovernmentinenvironmentalconservation.Initsforeword,theplanrecognizedmainstreamsocio-economicactivitiesasacommondrivingforcebehindvariousenvironmentalproblems:

“Thereisagrowingneedtoreconsiderourvaluesplacingtoomuchemphasisonthepursuitofmaterialwealth,andtheprevailingsocio-economicactivitiesandlifestylesmarkedbymass-production,mass-consumption,andmass-disposal.”

ItwentontoaffirmthatJapanesesocietymustchangetoasustainableonethatgenerateslittleburdenontheenvironment,whileatthesametimepromotinginternationalactivitiesforconservingtheglobalenvironment(GoJ,1994).

However,areviewconductedbytheOECDpointedoutthatdespitequiteadvancedandsometimesexemplarypolicies,thedecouplingachievedinthe1990shadnotbeensufficient(OECD,2002).CO2emissionscontinuedtoincreaseasdidanumberofpollutiontrends,mostnotablythoserelatedtotrafficandenergyuse.Remainingwastedisposalcapacitywasalsoreachingacriticalpoint.Thisledthegovernmenttotakefirmerstepstowardsestablishingasoundmaterialcyclesociety(SMC).Whileitsconceptuallinkagewiththepoliciesforalowcarbonsocietywasmadeatlaterstage,reductionofCO2hasyettobesufficientcomparedtothetargetofKyotoProtocol.ThiscasestudydoesnotundertakefurtheranalysisofenergyandCO2issues,butfocusesonmaterialcycles.Anexceptionistheso-called‘toprunner’approachforenergyconsumptionbyelectricalappliances.

9.2.1 Towards a sound material cycle society

Theterm‘Junkan-gata-shakai’(SoundMaterialCycleSociety)wasfirstcoinedin1991byanexpertcommitteeoftheJapanEnvironmentAgency(Moriguchi,2008).TheconceptofaSMCisfirmlyrootedin3Rprinciples.2Japan’scommitmenttoa3Rpolicyispremisedonagrowingrecognitionoftwofactors–first,thattheincreaseinwastegenerationandwastenottreatedinanenvironmentally-soundmanneriscontributingtoworseningenvironmental

2 Reduce, reuse and recycle.

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pollutionworldwideincludingair,soilandwaterpollutionaswellasgreenhousegasemissions;andsecond,thatthequantityofrawmaterialswastedasaresultofinefficientresourceandwastemanagementworldwideisimmense.

Thus,theSMCsocietyisoneinwhichmeasuressuchasreducedwastegenerationandreducedextractionofresources,reuse,recycling,andappropriatedisposalhavebeenadvancedinabalancedmanner(Figure9.1).ThefirststepinbuildinganSMCsocietyis,therefore,tounderstandtheflowsofmaterialsintheeconomicsector,intermsoftheresourcesextracted,consumedanddisposedof.Thiswouldnotonlyenable

reducedgenerationandcyclicaluseofwastes,butalsogenerateknowledgetopromotetheefficientuseofallmaterialinputstotheeconomyandtoinformfuturepolicy.MaterialFlowAccounts(MFA)havethereforebecomeanintegralfeatureinJapaneseenvironmentalpolicy,identifyingthewholesystemofmaterialflowsinthenationaleconomyandprovidingitemizedoverviewsforsuchflows.Thisenablesthegovernmenttosetnumericaltargetsforso-calledmaterialflowindicators,asfollows(GoJ,2009):

• resourceproductivity=GDP/DirectMaterialInput;targetvalue:Yen420,000/ton(60%improvementcomparedtotheyear2000)

Figure 9.1. Scheme of a sound material cycle society (SMC)

Source: Ministry of the Environment, Government of Japan, 2009

Natural resource input

Production (e.g. manufacture,

distribution)

Consumption and use

Final disposal (landfill)

Control natural resource consumption

2 Reuse

5 Proper disposal

3 Recycle materials, reclamation

4 Thermal recycle, heat recovery

Treatment (e.g. recycling, incinerating) Disposal

1 Reduce waste generation


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• cyclicaluserate=cyclicaluseamount/(naturalresourcesinput+cyclicaluseamount);targetvalue:14to15%(40to50%improvementcomparedtotheyear2000)

• finaldisposalamount=sumofgeneralwastesandindustrialwaste;targetvalue:23milliontons(60%reductioncomparedtotheyear2000)

Therearesuccessfultrendstowardstheattainmentofthesetargets,asshowninFigure9.2.

9.2.2 The Fundamental Law and Plan

AFundamentalLawforEstablishingaSoundMaterialCycleSocietyhasbeeninplacesince2000.The1stFundamentalPlanforEstablishingaSoundMaterialCycleSocietywasadoptedbythecabinetin2003,andarevised2ndPlanwasadoptedin2008.Theselegalinstrumentsprovidethefundamentalframeworktointegrateenvironmentally-soundmanagementofwastesandefficientuseofnaturalresourcesintoJapan’smainstreameconomicprocesses.Severalsectoralrecyclinglawsforspecificproductsand

Figure 9.2. Trends of material flow indicators


1990 1995 2000 2005 2010 2015 1990 1995 2000 2005 2010 2015

1990 2000 2010

45

40

20

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100

80

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Resource productivity Final disposal amount

25

2015

35

1990 2005 2010 2015

60

40

1995 2005

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1995 2000

Million tons

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Target value:23 million tons

Target value:Yen 420,000/ton

Fiscal year Fiscal year

1990 1995 2000 2005 2010 2015

1990 2000 2010

16

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Percentage (%)

Cyclical use rate

8

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1995 2005

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Target value:14 to 15%

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sectorshavebeenenactedandrevisedtosupportthetransitiontowardsanSMCsociety.TheLawonPromotingGreenPurchasingsupportsdemand-sideofrecycledproducts(Figure9.3).

9.3 Contribution to international initiatives

Inparallelwiththeenforcementofnational3Rpolicies,theJapanesegovernmenthasplayedanactiveroleinternationallytodisseminatetheconceptandpracticalexperiencesof3R,byproposingandimplementingthe‘3RInitiative’attheG8.TheG8environmentministersadoptedtheKobe3Ractionplanin2008undertheJapanesepresidencyofG8.Theactionplanreferredexplicitlytotheneedtosupportcapacitydevelopmentsindevelopingeconomies.Theplanalsoencourageseachcountrytosettargetssuchasresourceproductivity.

9.4 Japan’s strategy for a sustainable society

AsshowninFigure9.3,Japan’spolicyforSMCispositionedundertheumbrellaofoverallenvironmentalpolicy.Despitethefactthatresourceefficiencyiscloselyinterrelatedwithenergyefficiency,SMCpolicyhasnotbeendirectlylinkedtoenergyandGHGmitigationpolicies.Recently,astrategywithamoreintegrativeviewacrossenergy,materialandecosystemresourceswasproposed.“BecomingaLeadingEnvironmentalNationStrategyinthe21stCentury–Japan’sstrategyforaSustainableSociety”wasdecideduponbythecabineton1June2007.Thestrategyproposestobuildasustainablesocietythroughcomprehensivemeasuresintegratingthethreeaspectsofthesociety,specifically,alowcarbonsociety,asoundmaterialcyclesocietyandasocietyinharmonywithnature,asshowninFigure9.4.

Figure 9.3. Legislative framework for sound material cycle policy

Source: Moriguchi, 2011

Law on promoting green purchasing

Fundamental environmental law Fundamental plan

Fundamental law for establishing a sound material cycle society Fundamental plan

(Establishment of general systems)

(Regulations according to the characteristics of respective items)

Container and packaging

Home appliances

Construction materials Food wastes End-of-life

vehicles

Waste management and public cleansing law

Law for promotion of effective utilization of resources


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9.5 Decoupling – evidence and innovation

9.5.1 Voluntary actions by industries ThefundamentalplanforSMCsetsanationaltargetofresourceproductivityandobligatesthegovernmentitselftoachieveit,buttheplandoesnotsetbindingtargetsforindustries.Nevertheless,voluntaryeffortshavebeenmadetoincorporatetheFactorXconceptintobusinesses.Forexample,asmanyaseightJapaneseleadingelectronicscompanies(Fujitsu,Hitachi,Panasonic,Mitsubishi,NEC,Sanyo,SharpandToshiba)arecollaboratingtodeveloptheguidancesystemfortheCommonFactorXapproach:

“EightmajorelectronicscompaniesinJapanhavevoluntarilyagreedtodeveloptheguidanceforCommonFactorXviaEco-EfficiencyEvaluationtoprovidemeaningfulindicatorsasapowerfulcommunicationstoolbetweenmanufacturersandconsumers.”

“Thefirststepisforairconditioners,refrigerators,lampsandlightingapparatus,becausethesefourproductscover60%ofelectricityconsumptionofhouseholdsinJapan.”(Shibaikeetal.,2008)

Innovativeeffortsbyindividualcompanieswerepublishedaspeer-reviewedjournalpapers(forthePanasoniccase,seeAoe,2007andforToshiba,seeKobayashietal.,2007).

Asindicatedbytheseexamplecases,manufacturingindustriesinJapanhavebeenactivelyinvolvedinresearchactivitiessuchasindustrialecologyandcleanerproduction,andhaveappliedthisexpertisetoactualbusinesspractices.Internationalconferencesoneco-balance,eco-design,andeco-materialshavebeenregularlyorganizedduringlastdecadewiththeparticipationofdifferentindustrysectors(Moriguchi,2000).Themostrecentannualeco-productsexhibitionattractedasmanyas174,000visitors.

Figure 9.4. Framework of Japan's strategy for a sustainable society

Source: Government of Japan, 2007

A society in harmony with nature

▼Enjoy and pass on nature's

blessings

A sustainable society▼

Coexist in harmony with earth's ecosystems and realize an

economic society that enjoys sustainable growth and

development

A low carbon society▼

Reduce greenhouse gas emissions drastically

A sound material cycle society

▼Recycling resources through 3R

Climate change and energy/resources

Ecosystems and environmental load

Climate change and ecosystems

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9.5.2 Actions by local authorities InJapan,localgovernmentsareresponsibleforthemanagementofmunicipalsolidwaste(MSW).Theireffortstoreduceenvironmentalandeconomicburdensassociatedwithwastemanagementvarysignificantly,accordingtotheirdemographic,geographic,andindustrialdiversities.ThefollowingisjustanexamplequotedfromtherecentAnnualReportontheEnvironmentandtheSoundMaterialCycleSociety.

“Withnoincineratingfacilitiesofitsown,ShibushiCityhastodisposeofallitswastesinlandfills.Bymeansofthesortedcollectionofwastesinto28categories,thecitygovernmenthassuccessfullyreducedtheamountoflandfillwastesby80%[asshowninFigure9.5].Todealwithkitchengarbage,thecityalsoimplementsthe‘SunSunSunflowerPlan’,whichproducessunfloweroilfromkitchengarbageaspartofitseffortstoachievezerolandfillwastesthroughregionalcollaboration.”

9.5.3 A Japanese approach to decoupling: the Top Runner Programme3

Inmanycountries,theenergyefficiencyofelectricalappliancesisenhancedbyMinimumEfficiencyPerformanceStandards(MEPS).Japanfollowedadifferentstrategy.Insteadofsettingaminimumefficiencystandard,itsTopRunnerProgrammesearchesforthemostefficientmodelonthemarketandthenstipulatesthattheefficiencyofthis top runner modelshouldbecomethestandardwithinacertainnumberofyears.TheTopRunnerProgrammeappliestomachineryandequipmentintheresidential,commercial,andtransportationsectors.

TheTopRunnerProgrammesetstargetsbyproductcategory.4Ineachcategory,themostefficientmodelcurrentlyonthe

3 This section is largely based on an article by Bruno Wachter (2006).4 Products currently covered are: passenger vehicles, freight

vehicles, air conditioners, electric refrigerators, electric freezers, electric rice cookers, microwave ovens, fluorescent lights, electric toilet seats, TV sets, video cassette recorders, DVD recorders, computers, magnetic disk units, routers, switches, copying machines, space heaters, gas cooking appliances, gas water heaters, oil water heaters, vending machines, transformers (see http://www.eccj.or.jp/top_runner/index.html).

Figure 9.5. Waste management efforts in Shibushi City

1998 1999 2000 2001 2002 2003 2004 2005 2006


Tons

15,000

12,500

0

10,000

● Recycled waste● Waste for landfill/incineration

2,500

5,000

1998 20041999 2000 2001 2002 2003 2005 2006

7,500

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Product categoryEnergy efficiency improvement

(actual result, %)Energy efficiency improvement

(initial expectation, %)

TV receivers 25.7 16.4

VCRs 73.6 58.7

Air conditioners 67.8 66.1

Electric refrigerators 55.2 30.5

Electric freezers 29.6 22.9

Gasoline passenger vehicles 22.8 22.8

Diesel freight vehicles 21.7 6.5

Vending machines 37.3 33.9

Computers 99.1 83.0

Magnetic disk units 98.2 78.0

Fluorescent lights 35.6 16.6Source: ECCJ, 2008

marketisusedtosetthestandardtobeattainedbytherestoftheindustrywithinfourtoeightyears.Bythetargetyear,eachmanufacturermustensurethattheweightedaverageoftheefficiencyofallitsproductsinthatparticularcategoryisatleastequaltothatofthetoprunnermodel.Thisapproacheliminatestheneedtobanspecificinefficientmodelsfromthemarket.Atthesametime,manufacturersaremadeaccountableand,perhapsmostimportantly,theyarestimulatedtovoluntarilydevelopproductswithanevenhigherefficiencythanthetoprunnermodel.

TheTopRunnerstandardsaresetbycommitteeswithrepresentativesfromthemanufacturingindustry,universities,tradeunions,andconsumerorganizations.Theyfollowwell-definedprocedures.Anefficiencystandardforaproductcategorywillrarelybeasinglenumericalvalue.Inmostcases,itwillvaryaccordingtoabasicindex,forinstance,theweightofacar,thesizeofaTVscreen,orthepowerofanairconditioner.Ifcertainadditionalfunctionsofaproductcorrespondtoahighmarketdemand,butmakeitvirtuallyimpossibletoachievetargetvalues,aseparatecategorymaybecreated.Ifthepay-backratioofnewlydevelopedproductscomplyingwiththestandardbecomestoolow,two

separatecategoriesmaybecreatedaswell:onefortheexpensive,highlyefficientmodels,andoneforthereasonablypriced,low-energymodels.ThesekindsofflexibleprinciplesensurethattheTopRunnerProgrammedoesnotlimittheconsumer’schoice.

Theprogrammehasachievedgoodresults(seeTable9.1),despitehavingrelativelyweaklegalleverage.PrescribedunderSection6oftheEnergyConservationLaw,itmerelystipulatesthatmanufacturershave‘theobligationtomakeeffortstoachievethetarget’.Therealpowerofthisprogrammeliesinthefactthatnon-complianceputsthebrandimageofacompanyatrisk.Ifacompanyisnotabletomeettargetsorfailstomakeagoodfaithattemptatreachingthestandardinspiteofseveralwarnings,thisfactispublicized.GiventhestrongrolethatcorporateprideplaysinJapaneseculture,thisissomethingeachcompanywillmakeconsiderableeffortstoavoid.Consumers,inturn,arealsomadetoassumeacertainlevelofresponsibilitythroughalabellingsystem.Individualproductsthatdonotmeetthetargetarenotwithdrawnfromthemarket,buttheyreceiveanorangelabel,incontrasttoagreenlabelforthemodelswhichdoachievethetoprunnerstandard.

Table 9.1. Top Runner Programme achievements

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9.6 Lessons from the use of resource productivity indicator

TheFundamentalPlanforEstablishingtheSoundMaterialCycleSocietyadoptedaresource productivity indicatorinitssimplestform,i.e.,GDPdividedbyDMI(Totalweightofdirectinputsofresources).Thiskindofsimplicitywasusefultodemonstratetheconceptofdecouplingofeconomicgrowthfromphysicalgrowth.However,expertshaveoftendebatedwhetherornotthesemacroscopicmaterialflowindicatorsareusefulproxyindicatorsthatproperlyrepresentbothresourceandenvironmentalproblems.

Sincetheadoptionofthe1stFundamentalPlanin2003,theperformanceofthePlanhasbeenreviewedannuallybytheCentralEnvironmentalCouncilofJapan.Theprogressofmaterialflowindicatorstowardnumericaltargetshasalsobeenreviewed.Thisreviewprocessrevealedneedsforimprovementandfurtherexamination.For

example,itwasfoundthatannualvaluesofDMIweresignificantlyinfluencedbyfluctuationsinconstructionmaterialinputs.Tolessenthisinfluence,anotherresourceproductivityindicator,calculatedasGDPdividedbyDMIminusinputsofconstructionmineralswasintroducedandthenumericaltargetinthesecondPlanrevisedin2008.Resourceproductivityintermsoffossilresourceswasalsoaddedtomonitortrends.ComparedtotherecentsteepupwardstrendoftheresourceproductivityindicatorcalculatedasGDP/DMI,thesetwonewindicatorsshowmoremoderatetrends,i.e.smallerimprovementsinresourceproductivity.

Adecompositionanalysisstudywasalsoundertaken(Hashimotoetal.,2009)toelucidateinmoredetailwhatfactorshavechangedJapaneseResourceProductivityfortheperiod1995–2002.Effectsofthefollowingfourfactorswereanalysed:(1)Recyclingfactor,(2)Inducedmaterial-useintensityfactor,(3)Demandstructurefactor,and(4)Averagepropensitytoimport

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factor.Thestudyconcludedthatchangesinthedemandstructure(factor3)producedthelargestcontributiontoareductioninresource-useintensity.Thedeclineoffinaldemandforconstructionmaterialsresultedinthelargestcontributiontothedeclineinresource-useintensity(i.e.improvementsinresourceproductivity).Thestudyalsofoundthattheaggregateoftheeffectofimprovementsininducedmaterial-useintensityofgoodsandservices(factor2)andtheeffectoftheincreaseofrecycledresourceinputs(factor1)contributedtothechangeinresourceproductivityasmuchastheeffectofchangesindemandstructure.

9.7 Conclusion

InJapaneseenvironmentalpolicy,thelimitsofthecurrentsocio-economicsystemcharacterizedbymass-production,mass-consumptionandmass-disposalhavebeenrecognizedsincethe1990s.ThegeopoliticalspecificityofJapanwhichdependsformostofitsnaturalresourcesupplyonimportsandthespiritualtraditionof‘Mottainai’explainthis.

Thecasestudyrevealedthattheconceptof‘decoupling’hasbeenexplicitlyincorporatedintoJapanesenationalpolicyforestablishingasoundmaterialcycle(SMC)society,asrepresentedbytheadoptionofmaterialflowindicators,

includingresourceproductivity.WhilethedirectdriveroftheSMCpolicywasavisiblelimitinsolidwastemanagement,ithasbeensuccessfullycoupledtoresourceinputissues.3Rpolicieshavebeenenforcedbythenationallegislativeframeworkanditsconceptandpracticalexperienceshavebeendisseminatedinternationally.

Incontrast,thoughnotdirectlyreviewedindetailbythiscasestudy,decouplingofCO2emissionsfromeconomicgrowthhasnotbeensufficient,aspointedoutbytheOECD’senvironmentalperformancereview.WhilethetoprunnerapproachforelectricappliancesandthevoluntaryconsortedeffortstowardsFactorXbyelectriccompaniesshedlightonthesecircumstances,furtherefficiencyimprovementsarenecessarytoaccomplishreductionsinenergyandresourceconsumptioninabsoluteterms.

WhiletheResourceProductivityindicatormeasuredasGDP/DMIshowsasuccessfultrendtowardsthetarget,thisissignificantlyinfluencedbyadeclineinfinaldemandfromtheconstructionsectorcausedbyrecessionaryconditions.Therealchallengeistoachievereductionininputsofvaluablenaturalresourcessuchasfossilfuelsandmetalores,byintegratingSMCpolicywithothermajorcomponentsofenvironmentalpoliciessuchasthoseforalowcarbonsociety.

9. Japan

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TheInternationalResourcePanel(IRP)wasestablishedtoprovidedecisionmakersandotherinterestedpartieswithindependentandauthoritativepolicy-relevantscientificassessmentsonthesustainableuseofnaturalresourcesand,inparticular,ontheirenvironmentalimpactsovertheirfulllifecycles.Itaimstocontributetoabetterunderstandingofhowtodecoupleeconomicgrowthfromenvironmentaldegradation.ThisreportondecouplingispartofthefirstseriesofreportsoftheIRP,coveringamongstothersbiofuels,metalstocksinsocietyandenvironmentalimpactsofconsumptionandproduction.

About the International Resource Panel

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TheobjectivesoftheInternationalResourcePanelareto:

a.provideindependent,coherentandauthoritativescientificassessmentsofpolicyrelevanceonthesustainableuseofnaturalresourcesandinparticulartheirenvironmentalimpactsoverthefulllifecycle;and

b.contributetoabetterunderstandingofhowtodecoupleeconomicgrowthfromenvironmentaldegradation.

TherationaleandoverallobjectiveoftheWorkingGroup(WG)relatetothesecondbulletpointandthecorestrategicbasisfortheworkoftheInternationalResourcePanel.

ThefirstreporttitledDecouplingnaturalresourceuseandenvironmentalimpactsfromeconomicgrowthdefinesdecoupling.Itoffersimportantsetsofdataonresourceextractionanduse,anditpresentsfindingsthatindicatethatdecouplingishappening,butabsoluteresourceusereductionsarearareexception.Thefourcountrystudies(ChinaandSouthAfricaforthedevelopingworld,andGermanyandJapanforthehighlyindustrializedworld)showthatdevelopingcountriespursuenostrategiesofabsolutedecouplingandthatindustrializedcountriesmayhavepoliciesbutverymodestsuccessesinabsolutedecoupling.TheReportisverycautiousaboutpolicyimplications,inlinewiththemandateoftheInternationalResourcePanel.

Thecombinedchallengesofglobalwarming,limitsoffossilfuelsandsomeotherresources,destructionofhabitatsofwildlivingplantsandanimalsseemtomakeacaseforarriveatanabsolutedecouplingworldwideinthenottoodistantfuture.Itissuggestedtoputtheemphasisofthesecondreportontechnologiesthatwillallowamassiveimprovementofeco-efficiency;casestudiesatnational,sectoralorcitylevelsofsuccessfuldecouplingofwellbeingfromresourceconsumption;andpolicyinstrumentsthathavebeenproventobeeffectiveinreducingresourceuse.Casestudiesfromtheprivatesectorarewelcome.

Thesecondreportwillexploretowhatextenteconomicgrowthandwellbeingcanbedecoupledfromresourceconsumptionandenvironmentalimpacts.Opportunitiesfordecouplingatthemicrolevelwouldalsobeofuseinlaterinformationdisseminationandpolicyrelevance,particularlyatthesectorallevel.TheWorkingGroupwilllookattechnologyoptionsandpolicyinstrumentsthatcanfacilitateandacceleratedecoupling.

Working Group on Decoupling


152

TheUNEPDivisionofTechnology,IndustryandEconomics(DTIE)helpsgovernments,localauthoritiesanddecision-makersinbusinessandindustrytodevelopandimplementpoliciesandpracticesfocusingonsustainabledevelopment.

The Division works to promote:➥ sustainableconsumptionandproduction,➥ theefficientuseofrenewableenergy,➥ adequatemanagementofchemicals,➥ theintegrationofenvironmentalcostsindevelopmentpolicies.

The Office of the Director, located in Paris, coordinates activities through:➥ The International Environmental Technology Centre–IETC(Osaka),which

implementsintegratedwaste,wateranddisastermanagementprogrammes,focusinginparticularonAsia.

➥ Sustainable Consumption and Production(Paris),whichpromotessustainableconsumptionandproductionpatternsasacontributiontohumandevelopmentthroughglobalmarkets.

➥ Chemicals(Geneva),whichcatalyzesglobalactionstobringaboutthesoundmanagementofchemicalsandtheimprovementofchemicalsafetyworldwide.

➥ Energy(ParisandNairobi),whichfostersenergyandtransportpoliciesforsustainabledevelopmentandencouragesinvestmentinrenewableenergyandenergyefficiency.

➥ OzonAction(Paris),whichsupportsthephase-outofozonedepletingsubstancesindevelopingcountriesandcountrieswitheconomiesintransitiontoensureimplementationoftheMontrealProtocol.

➥ Economics and Trade(Geneva),whichhelpscountriestointegrateenvironmentalconsiderationsintoeconomicandtradepolicies,andworkswiththefinancesectortoincorporatesustainabledevelopmentpolicies.

UNEPDTIEactivitiesfocusonraisingawareness,improvingthetransferofknowledgeandinformation,fosteringtechnologicalcooperationandpartnerships,andimplementinginternationalconventionsandagreements.

Formoreinformation,seewww.unep.fr

About the UNEP Division of Technology, Industry and Economics

• Humankind has witnessed phenomenal economic and social development in the past century. However, there are increasing signs that it has come at a cost to the environment and to the availability of cheap resources. Despite progress, there is still great disparity between the rich and the poor. The dilemma of expanding economic activities equitably while attempting to stabilize the rate of resource use and reduce environmental impacts poses an unprecedented opportunity and challenge to society. In this report, the International Resource Panel has sought to apply the concept of decoupling economic growth and human well-being from environmental impacts and resource use to address this challenge. The report provides a solid foundation for the concept of decoupling, clearly defining key terms and providing empirical evidence of escalating resource use. It shows that decoupling is already taking place to some extent, but is lagging far behind its potential. The scenarios show that we are facing a historic choice about how we use resources and the report scopes the potential of innovation, rethinking economic growth and the role of cities in building more resource efficient economies. Four case studies at the country level show how policy makers are implementing decoupling strategies. This report focuses on material resources, namely fossil fuels, minerals, metals and biomass and will be complemented by parallel reports of the IRP on land and soil, water, metals, cities and technologies to mitigate GHG emissions. These future reports will contribute to the International Resource Panel’s objective to build a better understanding of how to decouple environmental impacts from economic growth and improved human well-being. It is hoped that policy makers aiming to green their economies will greatly benefit from the contributions that the International Resource Panel is making through its work on decoupling resource consumption from economic growth.

For more information, contact:UNEP DTIESustainable Consumption and Production Branch15 rue de Milan75441 Paris CEDEX 09FranceTel: +33 1 4437 1450Fax: +33 1 4437 1474E-mail: [email protected]/resourcepanel

DTI/1388/PAISBN: 978-92-807-3167-5


Tel: (254 20) 7621234Fax: (254 20) 7623927


www . unep . o r gUnited Nations Environment Programme

P.O. Box 30552 Nairobi, 00100 KenyaTel: (254 20) 7621234Fax: (254 20) 7623927


www . unep . o r gUnited Nations Environment ProgrammeP.O. Box 30552 Nairobi, 00100 Kenya

Tel: (254 20) 7621234Fax: (254 20) 7623927


www . unep . o r g

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