What do resource productivities really measure? Julia K. Steinberger, Fridolin Krausmann Marina...
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What do resource productivities
really measure?
Julia K. Steinberger, Fridolin KrausmannMarina Fischer-Kowalski, Nina Eisenmenger
International Society of Ecological Economics
Oldenburg/Bremen, GermanyAugust 22-25 2010
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What is resource productivity?
better is higher input Resource
output GDPtyProductivi :
EconomyOil
EconomyOil
3
Policy goals for resource productivity: European Union
EU Thematic Strategy on the Sustainable Use of Natural Resources, 2005.
4
Policy goals for resource productivity: Japan
Japanese 3R policies based on Material Flow Analysis
Takiguchi and Takemoto, 2008
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Resource productivity and income
Material Productivity Energy Productivity
International data, year 2000 Domestic Material Consumption: Steinberger et al. 2010
Domestic Energy Consumption: Krausmann et al 2008
Market Exchange Rate GDP: World Bank 2007
R2 = 0.84 R2 = 0.77
Resource productivity:
measure of sustainability –
or higher incomes?
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Analytic framework: 3 extensive and 3 intensive variables
BrickTestament.com
Oil
2. GDP3. Resources (Energy and materials)
1. Consumption = Resource / Population
2. Income = GDP / Population
3. Productivity = Income / Consumption
Oil
3. Productivity = GDP / Resource
1. Population
= ?
7
Balancing income & consumption: income elasticity
Income elasticity = b
bIncomeanConsumptio
When income increases by 1%, consumption increases by b%
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Consumption, income and elasticity
Material Consumption Energy Consumption
INELASTIC
Proportional
Somewhat inelastic
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Income elasticity vs. resource productivitybIncomea nConsumptio Income elasticity
of consumption
We find that ... productivity depends on income through b!
We now know:
b)(1b
Incomea
1
Incomea
Income
nConsumptio
Income
use Resource
GDP tyProductivi
Which means that if we do some math ...
Oil
11
Oil
Balancing productivity & income: through income elasticity!
dIncomectyProductivi
= 1-b
When income increases by 1%, productivity increases by (1-b)%
d
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Is productivity-income-elasticity relation real?
Energy ProductivityMaterial Productivity
b = 0.9
b = 0.1
b = 0.4
=> d = 1 - b
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Relation is real: what does it mean?
Productivity of material or energy resource use
1. Behaves like an aggregate: between inelastic biomass and more
elastic fossil fuels, depending on their shares in the aggregate.
2. If there is a significant inelastic share, productivity will increase with
income.
Aggregate productivity does not measure “sustainable” or
“efficient” economies: it measures high income economies.
Using resource productivity as a policy goal is (generally)
rewarding business-as-usual, and does not imply
reductions in resource use.
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Productivity and dematerialization in the EU-27
Gro
wth
in
pro
du
ctiv
ity
Growth in GDP
Absolute dematerialization
Relativedematerialization
No decoupling at all
Absolute dematerialization
Relativedematerialization
No decoupling at all
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Conclusions
• Resource productivity depends on the relation between
income and consumption: income elasticity of consumption.
• Dematerialization requires increasing productivity faster than
economic growth.
• Which is equivalent to requiring reduced consumption at
higher incomes ....
• ... in other words, requiring negative income elasticity.
• Rather than a policy focus on productivity increases, which
encourages business-as-usual, the focus should be directly
on reducing consumption.