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Is the economy (de)materializing? A comparison of Germany, China and Spain Vincent Moreau Gregor Meerganz von Medeazza DEMATERIALIZATION Reduction in the amount of materials needed for the economic process, or a reduction in the quantity of material used per unit of economic output also called “intensity of material use” Dematerialization debate mainly onset by Limits to Growth (Meadows and Club of Rome, 1972) concerns about • the exhaustion of both material and energy supply • the assimilative capacity of the environment (sinks) Hypothesis Economic and material/energy growth can be delinked vs. Economic and material growth are two sides of the same coin Measures of economic growth GDP Economic growth as measured conventionally with GDP at constant prices is problematic in several ways. GDP excludes non monetary transactions and negative externalities Hedonist psychology shows that correlation between GDP and happiness in the western world no longer holds → societal happiness has been declining for the past thirty years ALTERNATIVE measures of economic growth ALTERNATIVES: • Index of Sustainable Economic Welfare (Daly et al. 1989) • Genuine Progress Indicator (Redefining Progress 1995) • Green GDP (El Serafy et al. 1989) SI = GDP – 2Ca – 1Cu + 1Bu HAPPINESS Bhutan’s “Gross National Happiness” I = (HLY) / (GHG) (Common, 2005) PHYSICAL measures of the economic process ALTERNATIVES - Intensity of material use : • Ecological Footprint • Ecological Rucksack • Material Input per Unit Service (MIPS) • Material and Energy Flow Analysis (MEFA) • Domestic Material Consumption (DMC) • Life Cycle Inventory (LCI) How calculated ? Boundaries ? Minimization of such indicators always equivalent to environmental improvement ? Dematerialization: an Industrial Ecology’s dream “conservation” principle replaces “throw-away” culture: durable products treated as capital assets rather than consumables Doing more with Less: Factor 4 Factor 10 Reasonable… but daunting Gospel of efficiency & Jevons’ paradox RESULTS: evidence from Germany and China Domestic Material Consumption for China 30000 Millions of tons 25000 20000 15000 10000 5000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 Domestic Material Consumption for Germany 4500 Millions of tons 4000 3500 3000 2500 2000 1500 1000 500 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 RESULTS: evidence from Germany and China Physical trade balance for China 800 Millions of tons 600 400 imports 200 exports balance 0 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 -200 -400 Physical trade balance for Germany 800 400 Imports 200 Exports Balance 0 -200 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 Millions of tons 600 -400 Absolute vs. Relative Dematerialization DMC (%) GDP (% constant 1995 prices) PTB (% - 1994 to 2005) 78.5 74 110 Materialization China 17.6 70.2 1175 Relative dematerialization Germany -11.8 12.1 -17.3 Absolute dematerialization Spain (1980-2000) Dematerialization should be differentiated in two ways. Basic needs and material wants “conspicuous consumption” (Veblen 1899) “Positional goods” (Hirsch 1976) Basic needs are shared by everyone and are finite and few (Max-Neef et al. 1991) The good news ecologically: seems possible to actually have more satisfaction with less stuff Quality of life and happiness tricky to measure and still have no political value compared to GDP growth CONCLUSION • clear distinction between absolute and relative dematerialization CONCLUSION • clear distinction between absolute and relative dematerialization • improvements in ratios of materials to GDP (or energy to GDP) really not relevant since nature sets absolute limits CONCLUSION • clear distinction between absolute and relative dematerialization • improvements in ratios of materials to GDP (or energy to GDP) really not relevant since nature sets absolute limits • absolute dematerialization of the economy is largely a red herring CONCLUSION • clear distinction between absolute and relative dematerialization • improvements in ratios of materials to GDP (or energy to GDP) really not relevant since nature sets absolute limits • absolute dematerialization of the economy is largely a red herring • physical numeraires such as calories and kilograms not less reductionist than GDP CONCLUSION • clear distinction between absolute and relative dematerialization • improvements in ratios of materials to GDP (or energy to GDP) really not relevant since nature sets absolute limits • absolute dematerialization of the economy is largely a red herring • physical numeraires such as calories and kilograms not less reductionist than GDP • new satisfactors of needs must be less material and energy intensive. CONCLUSION • to generate “environmental space” for the South, the North must embark on a socially sustainable degrowth path… CONCLUSION • to generate “environmental space” for the South, the North must embark on a socially sustainable degrowth path… • …meaning less use of materials and energy while sustaining and maintaining happiness. CONCLUSION • to generate “environmental space” for the South, the North must embark on a socially sustainable degrowth path… • …meaning less use of materials and energy while sustaining and maintaining happiness. • economic degrowth remains, however, a political taboo