Eco-economic decoupling

In economic and environmental fields, decoupling is becoming increasingly used in the context of economic production and environmental quality. When used in this way, it refers to the ability of an economy to grow without corresponding increases in environmental pressure. In many economies, increasing production (GDP) raises pressure on the environment. An economy that is able to sustain GDP growth without having a negative impact on environmental conditions, is said to be decoupled.

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

The OECD has made decoupling a major focus of the work of its Environment Directorate. The OECD defines the term as follows: the term 'decoupling' refers to breaking the link between "environmental bads" and "economic goods." It explains this as having rates of increasing wealth greater than the rates of increasing impacts.[2]

In 2014, the same International Resource Panel published a second report, "Decoupling 2",[3] which

highlights existing technological possibilities and opportunities for both developing and developed countries to accelerate decoupling and reap the environmental and economic benefits of increased resource productivity.

The lead coordinating author of this report was Ernst Ulrich von Weizsäcker.

Relative versus absolute decoupling

Tim Jackson, author of Prosperity Without Growth, stresses the importance of differentiating between relative and absolute decoupling when using the term.

Relative decoupling refers to a decline in the ecological intensity per unit of economic output. In this situation, resource impacts decline relative to the GDP,[4] which could itself still be rising.

Absolute decoupling refers to a situation in which resource impacts decline in absolute terms.[4] Resource efficiencies must increase at least as fast as economic output does and must continue to improve as the economy grows, if absolute decoupling is to occur.

Jackson points out that an economy can correctly claim that it has relatively decoupled its economy in terms of energy inputs per unit of GDP. However, in this situation, total environmental impacts would still be increasing, albeit at a slower pace of growth than in GDP.[4]

Jackson uses this distinction to caution against technology-optimists who use the term decoupling as an "escape route from the dilemma of growth."[4] He points out that "there is quite a lot of evidence to support the existence of [relative decoupling]" in global economies, however "evidence for [absolute decoupling] is harder to find."[4]

Similarly, leading ecological economist and steady-state theorist Herman Daly (1991, page 118) states

It is true that "In 1969 a dollar's worth of GNP was produced with one-half the materials used to produce a dollar's worth of GNP in 1900, in constant dollars." Nevertheless, over the same period total materials by consumption increased by 400 percent.[5]

Notes and references

  1. ↑ Decoupling natural resource use and environmental impacts of economic growth. International Resource Panel report, 2011
  2. ↑ OECD 2002 “Indicators to Measure Decoupling of Environmental Pressure from Economic Growth” (excerpt) http://www.oecd.org/dataoecd/0/52/1933638.pdf
  3. ↑ Decoupling 2: technologies, opportunities and policy options A Report of the Working Group on Decoupling to the International Resource Panel. von Weizsäcker, E.U., de Larderel, J, Hargroves, K., Hudson, C., Smith, M., Rodrigues, M., 2014
  4. 1 2 3 4 5 Jackson, Tim (2009). Prosperity without Growth: Economics for a Finite Planet. London: Earthscan. pp. 67–71. ISBN 9781844078943.
  5. ↑ Daly, Herman E. (1991). Steady-state economics: Second edition with new essays. Island Press. p. 118. ISBN 9781597268721.
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