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The material footprint of nations

Date: 9/09/2013 | Author: Paul Sanderson

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A recent study found that the metrics used to determine whether countries have decoupled resource use from economic growth is flawed

The metrics used by Governments and supra-Governmental organisations around the world suggest that some developed countries have increased the use of natural resources at a slower rate than economic growth, or have even managed to use fewer resources over time.

But a new study, The Material Footprint of Nations by scientists from Australia, Japan, Norway and the United States suggests that the methodology used is flawed.

When using the materials footprint (MF) consumption-based indicator of resource use, the scientists found that decoupling of resource use from economic growth was either smaller than reported or non-existent.

Using analysis of 186 countries and identifying the material flows associated with global production and consumption networks in unprecedented specificity, the scientists found that countries’ use of non-domestic resources is, on average, about threefold larger than the physical quantity of traded growth.

The report, published in Proceedings of the National Academy of Sciences of the United States says: “As wealth grows, countries tend to reduce their domestic portion of materials extraction through international trade, whereas the overall mass of material consumption generally increases.

“With every 10 per cent increase in gross domestic product, the average national MF increases by 6 per cent. Our findings call into question the sole use of current resource productivity indicators in policy making and suggest the necessity of an additional focus on consumption-based accounting for natural resource use.”

As policy attention on natural resource security is growing worldwide, to gauge the sustainability of resource use, and to support decision making by politicians, metrics of economy-wide material flow accounting, such as domestic material consumption (DMC), have been adopted as sustainability indicators.

For example, the European Commission’s Roadmap to a Resource Efficient Europe proposes that the metric to assess materials usage should be gross domestic product divided by DMC.

This metric is also supported by the Organisation for Economic Cooperation and Development and the United Nations Environment Programme.

Trends using this metric, show that in most European and OECD countries, relative or even absolute decoupling of economic growth and resource use has been achieved.

However, the report authors note that the scope of DMC is limited to the amount of materials directly used by an economy. This is the raw materials extracted from the domestic territory plus all physical imports minus all physical imports.

As the report says: “It does not include the upstream raw materials related to imports and exports originating from outside of the focal economy.

“This truncation might mislead assessments of national resource productivity and supply security of natural resources as the increasing spatial separation of production and consumption in global supply chains leads to a shift of resource use and associated environmental pressures among countries.”

The scientists worked out that in 2008, the total global MF, which is equal to the total used domestic extraction of raw materials, amounted to 70 billion tonnes.

Just 41 per cent of this amount (29 billion tonnes) was indirectly associated with trade flows between the 186 countries studied.

In other words, two-fifths of all global raw materials were extracted and used just to enable exports of goods and services to other countries.      

This is far more than the 10 billion tonnes of direct physical trade of materials and products and reflects the fact that the physical flow of traded commodities is less than the tonnages of raw materials required to produce the export commodities.

In 2008, the Chinese economy had by far the largest MF in absolute values at 16.3 billion tonnes, which was double that of United States and four times bigger than India.

For China, 60 per cent of its MF consists of construction materials showing the fast industrialisation and urbanisation of the country.

The country also had the largest amount of raw materials associated with exports at 7.3 billion tonnes with construction representing 5.2 billion tonnes. This means that around one-third of China’s infrastructure is related to consumption in other countries.

While in countries such as UK and Japan that have developed post-industrial economies the DMC value has declined markedly, the MF value has actually increased substantially. This is a pattern that is repeatedly seen in developed economies.

The report says: “The difference between the DMC and MF can be explained by the fact that traded goods require much more material than what is physically incorporated in them.

“Wealthier countries’ imports of finished and semi-finished products are linked to a larger amount of raw materials compared with the physical quantity traded.”

The EU 27 countries, OECD countries including Japan and United States have all grown economically while keeping DMC at bay or reducing it.

But in all cases, using the MF metric, no decoupling has taken place over the past two decades with the primary resource burden shifted to developing countries rather than domestic markets.

However, the report also notes that both the EU and OECD are aware of the limitations of the DMC approach and are looking to further assess the full lifecycle of products.

As a result, there is an expectation in the report that the MF will become the key metric behind global resource use and consumption, and that the challenge to decouple resource use from affluence is harder than first thought.

 

Report authors:

 

The study was undertaken by scientists from University of New South Wales, University of Sydney and Commonwealth Scientific and Industrial Research Association (Australia), Norwegian University of Science and Technology, University of California Santa Barbara, Tohuku University (Japan).

 


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