Growth in global materials use, GDP and population during the 20th century

The growing industrial metabolism is a major driver of global environmental change. We present an assessment of the global use of materials since the beginning of the 20th century based on the conceptual and methodological principles of material flow accounting (MFA). On the grounds of published statistical data, data compilations and estimation procedures for material flows not covered by international statistical sources, we compiled a quantitative estimate of annual global extraction of biomass, fossil energy carriers, metal ores, industrial minerals and construction minerals for the period 1900 to 2005. This period covers important phases of global industrialisation and economic growth. The paper analyses the observed changes in the overall size and composition of global material flows in relation to the global economy, population growth and primary energy consumption. We show that during the last century, global materials use increased 8-fold. Humanity currently uses almost 60 billion tons (Gt) of materials per year. In particular, the period after WWII was characterized by rapid physical growth, driven by both population and economic growth. Within this period there was a shift from the dominance of renewable biomass towards mineral materials. Materials use increased at a slower pace than the global economy, but faster than world population. As a consequence, material intensity (i.e. the amount of materials required per unit of GDP) declined, while materials use per capita doubled from 4.6 to 10.3 t/cap/yr. The main material groups show different trajectories. While biomass use hardly keeps up with population growth, the mineral fractions grow at a rapid pace. We show that increases in material productivity are mostly due to the slow growth of biomass use, while they are much less pronounced for the mineral fractions. So far there is no evidence that growth of global materials use is slowing down or might eventually decline and our results indicate that an increase in material productivity is a general feature of economic development.     

MFA model to assess economic and environmental consequences of food production and consumption

Agri-food sector is a crucially important part of the society, because it is a major factor affecting public health and welfare and it also contributes – directly and indirectly – both to the environment and to the national gross product and employment. Improving sustainability of the agri-food sector implies production of nutritionally better food by using fewer inputs and by reducing environmental burden.In reducing environmental burden, it is essential to restrict the material throughput, to identify the hot spots and direct the measures to them. Improving performance of the food sector requires that the benefits and inputs be quantified in an unambiguous way and that the inputs are estimated for the whole production chain. A comprehensive view of the whole system is necessary.Here, the material flow approach (MFA) has been used to describe the Finnish food flux. The quantitative numerical data have been derived from the farm models' data base, and the data have been adjusted so as to comply with the production and consumption statistics of Finland. Using the compiled data an extended input–output model has been constructed. The model allows for the evaluation of some of the economic and environmental consequences, when the structure of food production and the patterns of food consumption are changed. The consequences can be traced within agriculture, within the food sector as a whole, or at the level of the nation-wide economy. In combination with other information the model, thus, serves as a practical tool for planning.The paper at hand gives an overview of the data base and the basic calculation principles of the model. The usability of the model is demonstrated with results from modelling examples, in which the share of organic production or the share of vegetarian food in the average Finnish diet has been increased. The possibilities and restrictions of the approach as well as some of the needs for further development are discussed.The study is the first step in developing MFA methods to analyse and to monitor the material flows of the Finnish food flux. The results have been used also in compiling the Finnish physical input–output tables. The study, thus, contributes to the overall development of the materials flow accounting.     

Material implication of Chile's economic growth: Combining material flow accounting (MFA) and structural decomposition analysis (SDA)

Over the last three decades, the economic integration of the Chilean economy into global markets has been taking place at a rapid pace. For example, in 1986, exports represented 29% of GDP while in 1996 they had increased to 38% of GDP. This period of time was characterized by strong economic growth with an average annual growth rate of about 10%. From a physical perspective, material requirements more than doubled from 220 to 500 million tons of direct material inputs (DMI) during the same decade (the rate of material growth requirements was around 13% per year).The main objective of this study is to explain the changes in DMI by using a structural decomposition analysis (SDA). The changes in material flow accounting (MFA) were broken down into the effects caused by changes in resource use per unit of output (material intensity effect), changes between and within sectors (structural change effect), changes in the composition of final demand (mix effect), changes due to shifting shares of domestic final demand and export categories (category effect) and finally changes in the overall level of economic activities (level effects). The results, as a percentage of the total level of DMI used in 1986, indicate that economic growth was the major source of material changes (109%). The material intensity and category effects explained 31% and 14% of the increase, respectively. The increase in the material intensity is mainly due to a declining quality of ores in copper production. However, these components were partly compensated by the structure (− 14%) and mix (− 13%) effects. Therefore, for a Southern American country such as Chile, the main causes of these changes in material consumption have been a combination of the nature of economic growth along with an increase in export production and material intensity of production.     

Analysis and Forecast of the State of Environmental Protection in Russia

The main purpose of the present study is to analyse the emission dynamics of atmospheric and water pollutants in Russia and cost of their removal in the 1980s and early 1990s, and to forecast them by means of a Dynamic Input–Output Model according to different scenarios of future economic development till 1998. Main results of the work are:– methodological principles have been elaborated for singling out the environmental protection sector within the national economy;– a method has been offered for including the ecological block into a Dynamic Input–Output Model of the Russian economy;– a method of data preparation has been elaborated for the ecological block of the above-named model, the data base which characterizes the ecological situation in Russia has been formed and analysed;– calculations for 1994–1998 have been executed for forecasting the economic and ecological development of Russia using the above-mentioned model and the results obtained have been analysed. The results showed that if the existing tendencies towards low environmental protection capital costs remain the same, then the negative environmental impact will increase. In order to implement ecological programs and international agreements, to increase the proportion of removed pollutants, it is necessary to increase substantially expenditures on purifying water and air resources. The proportion of environmental protection investments in the total amount of the national economy capital costs should increase by up to 12–40% according to different scenarios of the economic development and different purposes of the environmental protection policy.     

Applying physical input–output analysis to estimate land appropriation (ecological footprints) of international trade activities

In the last few years some studies have been presented, which link land use accounting and input–output analysis (based on monetary input–output tables (MIOTs)) for the calculation of direct and indirect land appropriation of production and consumption activities. The compilation of the first comprehensive physical input–output tables (PIOTs) for some western European countries in the 1990s opened new possibilities for linking physical accounting and input–output analysis. Using a physical multiplier for this kind of calculation is more appropriate, as the most land intensive sectors are also the sectors with the highest amounts of material flows. Physical input–output analysis illustrates land appropriation in relation to material flows of each of the sectors, which is more appropriate from the point of view of environmental pressures than land appropriation in relation to monetary flows of a MIOT. Physical input–output analysis has so far not been applied for any land-related studies. Based on a physical input–output model of the EU-15, physical input–output analysis is applied in this paper, in order to calculate direct and indirect land requirements for the production of exports from EU-15 to the rest of the world.     

Asian development pathways and sustainable socio-technical regimes

Rapid industrialisation in Asia is generating a significant new demand for raw materials and pressure on local, regional and global environments. In the future these demands and pressures are expected to increase markedly. These concerns are models of development that assume that economic growth follows a pattern leading to a convergence between the structure, growth and productivity of economies over the long run. In these models, the structure of industries and sectors, technological capabilities and consumer preferences are regarded as converging towards patterns established in more advanced economies. By extension, convergence is also assumed to hold for the resource intensity and environmental pressure associated with growth in industrialising countries. This paper argues for greater attention to the resource and environmental quality of development. It argues that by applying ideas from an emerging literature on ‘systems innovation’ it becomes possible to envisage the emergence of new, more resource-efficient socio-technical systems as the basis of more sustainable development pathways in developing Asia. Such sustainable socio-technical systems will emerge in the context of interaction between domestic and globalised markets, knowledge flows and governance. Key issues for a research agenda are set out.     

Factors Behind the Environmental Kuznets Curve. A Decomposition of the Changes in Air Pollution

The environmental Kuznets curve theory suggeststhat economic growth in the long run may reduceenvironmental problems. In this article, we usea decomposition analysis to isolate eightdifferent factors, in order to investigate theorigins of changes in emissions to air over theperiod from 1980 to 1996. Among these factorsare economic growth, changes in the relativesize of production sectors and changes in theuse of energy. Given constant emissions perproduced unit, economic growth alone would havecontributed to a significant increase in theemissions. This potential degradation of theenvironment has been counteracted by first ofall more efficient use of energy and abatementtechnologies. In addition, the substitution ofcleaner for polluting energy types and othertechnological progressions and politicalactions have reduced the growth in emissions.Consequently, the growth in all emissions hasbeen significantly lower than economic growth,and negative for some pollutants.The results indicate that policymakers mayreduce emissions considerably through creatingincentives for lower energy use andsubstitutions of environmental friendly forenvironmental damaging energy types, inaddition to support environmental friendlyresearch or to conduct direct emission reducingactions, such as abatement requirements orbanning of environmental damaging products.This is particularly relevant to countries andsectors with relatively high energy intensitiesand low pollution abatement.     

An open economy model of the effects of unilateral environmental policy by a large developing country

In this paper, we pose the following question. Why is it that despite the universal recognition of the need for global environmental protection, developing countries have been lax in instituting stringent environmental regulations? Addressing this question from an economic standpoint, we show that there are plausible theoretical circumstances in which a large developing country can be worse off if it chooses to implement environmental policy in an uncoordinated fashion. The empirical dimension of this question is stressed and the key parameters – such as elasticities and marginal propensities to consume – which are germane to any policy discussion regarding this issue are identified. Second, we study – once again from the perspective of a large developing country – the possibility of using the domestic tax structure optimally to attain environmental policy objectives in a second-best environment. This scenario involves taxing pollution indirectly, by using product taxes. Finally, keeping the empirical dimension of the question in mind, we show how to compute optimal externality correcting taxes. These taxes are primarily a function of different kinds of elasticities.     

A re-examination of the technological catching-up hypothesis across OECD industries

This study re-examines the catching-up hypothesis at the industry level across the main OECD countries, using panel data econometric models involving technological gap indicators calculated with a nonparametric distance function suggested by Färe et al. [Färe, R.S., Grosskopf, M.N., Norris, M., Xhang, Z., 1994. Productivity growth, technical progress, and efficiency change in industrialized countries. American Economic Review 84, 66–83]. The results show that there is statistical evidence of a catching-up process at the industry level. Moreover, both tradables and nontradables sectors exhibit catching-up effects and technology adoption from abroad. This result complements the findings by Bernard and Jones [Bernard, A.B., Jones, C.I., 1996a. Comparing apples to oranges: productivity convergence and measurement across industries and countries. American Economic Review 86(5), 1216–1238., Bernard, A.B., Jones, C.I., 1996b. Productivity across industries and countries: Time series theory and evidence. Review Of Economics and Statistics 78, 135–146], Gouyette and Perelman [Gouyette, C., Perelman, S., 1997. Productivity convergence in OECD services industries. Structural Change and Economic Dynamics 8, 279–295] and Hansson and Henrekson [Hansson, P., Henrekson, M., 1997. Catching up, social capability, government size and economic growth, in V. Bergström, eds, Government and Growth, Oxford: Clarendon Press, 61–126] that there is no (or even a slow) catching-up effect in the manufacturing sector. Moreover, social capability indicators evaluated for each country show that “Non-European” and “Central European” tradables sectors have a rather similar degree of inefficiency while “North European” countries are less efficient for both tradables and non-tradables. Lastly, both the cross country and the cross sectors dispersions of inefficiency levels are smaller for tradables sectors than for non-tradables.     

Growth, welfare and transitional dynamics in an endogenously growing economy with abatement labor

This paper sets up a simple endogenous growth model that highlights the importance of the endogenous labor-leisure choice and the allocation between production labor and abatement labor. We show that, in contrast to the common notion (e.g. [Bovenberg, A.L., Smulders, S., 1996. Transitional impacts of environmental policy in an endogenous growth model. International Economic Review 37, 861–893] and [Bovenberg, A.L., de Mooij, R.A., 1997. Environmental tax reform and endogenous growth. Journal of Public Economics 63, 207–237]), the existence of an environmental production externality is a sufficient (but not necessary) condition for environmental policies to stimulate economic growth if the labor-leisure choice is endogenously determined. In particular, since there are complementarities between public abatement and private abatement, the public abatement expenditure will have a more powerful enhancing effect on economic growth when it is accompanied by more efficient private abatement. This result also leads to a corollary to the effect that it is easier to achieve double dividends in terms of enhancing both growth and welfare if the endogenous labor-leisure choice is taken into account.In our dynamic analysis, we show that if public abatement is substantially large, dynamic indeterminacy may occur despite the absence of a positive labor externality and interestingly, this is more likely to be the case when abatement labor plays a more significant role. Besides, the transitional effects of an increase in public abatement are also investigated.     

The CO2 ‘trade balance’ between Scotland and the rest of the UK: Performing a multi-region environmental input–output analysis with limited data

In this paper we attempt an empirical application of the multi-region input–output (MRIO) method proposed by Turner, Lenzen, Wiedmann and Barrett [Turner, K., Lenzen, M., Wiedmann, T., Barrett, J., 2007. Examining the global environmental impact of regional consumption activities — part 1: a technical note on combining input–output and ecological footprint analysis. Ecological Economics 62 (1), 37–44] in a recent issue of this journal in order to enumerate the CO2 pollution content of interregional trade flows between Scotland and the rest of the UK (RUK). We extend the analysis to account for direct emissions generation by households, as final consumers, and to a social accounting matrix (SAM), where a more comprehensive account of incomes and expenditures is possible. While the existence of significant data problems mean that the quantitative results of this study should be regarded as provisional, the interregional economy-environment IO and SAM framework for Scotland and RUK allows an illustrative analysis of some very important issues in terms of the nature and significance of interregional environmental spillovers within the UK and the existence of a CO₂ ‘trade balance’ between Scotland and RUK.     

Corrective Taxation for Curbing Pollution and Promoting Green Product Design and Recycling

In this paper we consider a competitive economy with flows of materials from extraction via recycling to landfilling which exhibits distortions due to pollution, external landfilling costs and inefficient product design. The allocative impact of tax-subsidy policies aiming at internalizing the distortions are analyzed when the pertinent tax-subsidy rates were successively raised from zero toward their efficiency restoring levels. Promoting recyclability by greening the product design stimulates recycling as expected. But it also increases primary material extraction and – possibly – the total waste flow, and it reduces the recycling ratio.     

What does export diversification do for growth? An econometric analysis

It is frequently suggested that export diversification contributes to an acceleration of growth in developing countries. Horizontal export diversification into completely new export sectors may generate positive externalities on the rest of the economy as export oriented sectors gain from dynamic learning activities due to contacts with foreign purchasers and exposure to international competition. Vertical diversification out of primary into manufactured exports is also associated with growth since primary export sectors generally do not exhibit strong spillovers. Yet there have been remarkably few empirical investigations into the link between export diversification and growth. This paper attempts to examine the hypothesis that export diversification is linked to economic growth via externalities of learning-by-doing and learning-by-exporting fostered by competition in world markets. The diversification-led growth hypothesis is tested by estimating an augmented Cobb–Douglas production function on the basis of annual time series data from Chile. Based on the theory of cointegration three types of statistical methodologies are used: the Johansen trace test, a multivariate error-correction model and the dynamic OLS procedure. Given structural changes in the Chilean economy, time series techniques considering structural breaks are applied. The estimation results suggest that export diversification plays an important role in economic growth.     

Evaluating new CO2 reduction technologies in Japan up to 2030

A mathematical model was developed for evaluating CO₂-reduction technologies in power generation, residential, commercial and road transport sectors in Japan. The existing and new power generation technologies evaluated included 34 centralized and 8 dispersed power generation technologies in the residential and commercial energy demand sectors. To take into account the varieties of useful energy and of its demand duration patterns among entities in the demand sectors, the hourly mean power and heating and cooling demand–supply balances in one residential and four commercial representative entities were considered for each month. The road transport sector addressed five types of automotive use. The useful-energy demands are exogenously given; the model calculates the technology installations that satisfy the demands to minimize the total systems cost for each year up to 2030. The availability of the new technologies, i.e., the first years they are installable, is derived from research and development (R&D) process analyses on the basis of surveys to experts. As a result of the model calculation, dispersed molten carbonate and solid oxide fuel cells and onboard gasoline reforming-type fuel cell vehicle (FCV) technologies are expected to have the largest economic values, approximately 60–120 billion constant 1998 yen [460–920 million U.S. dollars (USD)] among the evaluated new CO₂-reduction technologies. One of the implications from our calculations is that extending electric power corporations' commercial coverage to dispersed power generation, in addition to centralized power generation, is desirable to help lower overall costs in society, as well as to secure industry profits.     

Sustainability economics: Where do we stand?

Environmental economics, which is a branch of resource economics – the environment as a scarce resource – is essentially about market failures, the costs of pollution and pollution abatement, and the economics of regulation. Sustainability economics includes the problem of maintaining economic growth, while reducing pollution and/or its impacts, with special attention to the linked problems of energy supply (not to mention the supply other exhaustible resources), climate change and – most urgently – fossil fuel consumption. There is a need for integration of resource and environmental economics under a new rubric, sustainability economics.     

Ecological Structure and Functions of Biodiversity as Elements of Its Total Economic Value

Rational economic decisions regarding theconservation of biodiversity require the considerationof all the benefits generated by this naturalresource. Recently a number of categories of values(inherent value, contributory value, indirect value,infrastructure value, primary value) have beendeveloped, especially in the literature of EcologicalEconomics, which, besides the individual andproductive benefits of biodiversity, also include theutilitarian relevance of the ecological structure andfunctions of biodiversity in the, so-called, totaleconomic value. For the question of including theecological structure and functions of biodiversity inthe total economic value it is of crucial importanceto note, that these categories of values are not onlyterminologically different, but also relate todifferent ecological levels of biodiversity and – mostimportantly – to specific complementary relationships– between species, between elements of ecologicalstructures and between ecological functions and theircontribution to human well-being. This paper analysesthese complementary relationships, discusses theirimplications for the total economic value ofbiodiversity and draws conclusions for decision makingin environmental policy.     

The effect of economic freedom on growth revisited: New evidence on causality from a panel of countries 1970–1999

Does economic freedom cause economic growth or does causality run in the reverse direction? And do all the constituent parts of economic freedom exert a causal impact on economic growth or do some freedoms matter more than others? In order to answer these questions, this paper conducts a series of Granger causality tests using panel data for the period 1970–1999. In addition, the paper discusses a number of model specification issues, e.g. lag-length selection and the importance of intervening variables. The results suggest that some (but not all) aspects economic freedom affect economic growth and investment. On the other hand, there is only weak evidence that growth affects economic freedom.     

Re-examining the financial development and economic growth nexus in Kenya

This paper re-examines the causal relationship between financial development and economic growth in Kenya for the period 1966–2005 within a quadvariate vector autoregressive (VAR) framework by including exports and imports as additional variables to the finance–economic growth nexus. We use four conventionally accepted proxies for financial development, namely money supply (M2), liquid liabilities (M3), domestic bank credit to the private sector and total domestic credit provided by the banking sector (all percent of GDP). Applying a modified version of the Granger causality test due to Toda and Yamamoto [Toda, H.Y. and Yamamoto, T., Statistical inference in vector autoregressions with possibly integrated process. Journal of Econometrics 1995; 66; 225–250], our empirical results suggest that in three out of the four measures of financial development we found evidence of a two-way Granger causality: (1) between domestic credit provided by the banking sector and economic growth; (2) between total domestic credit provided by the banking sector and economic growth, and (3) between liquid liabilities and economic growth. This implies that neither the supply-leading nor the demand-following hypotheses are supported in Kenya and that economic growth and financial development are jointly determined, or they complement each other. A major implication of our finding is that financial development promotes economic growth in Kenya and that policies at enhancing the development of the financial sector can help to spur economic growth.     

Does financial liberalization matter for emerging East Asian economies growth? Some new evidence

This paper investigates the empirical relationship between financial liberalization and economic growth in East Asian region. The empirical literature suggests that there is a mixed link between financial liberalization and growth in emerging countries. Panel data techniques using LS, TSLS, and GMM are employed to shed some light on the empirical debate, we examine this issue in 6 major emerging East Asian countries over the period 1980–2002. The main result is that financial liberalization's growth effect depends on the nature as well as the intensity of financial sectors liberalization. Full liberalization of the financial sector has been associated with slower growth outcomes while more moderate partial liberalization is associated with more positive outcomes.     

国际环境协定的经济学分析及对国际经济的影响

随着世界经济的飞速发展,环境污染和生态破坏日益全球化.世界各国纷纷签订各种国际环境协定,希望通过加强国际合作,共同采取措施来解决全球环境问题.本文对国际环境双边和多边协定的制定和签署进行了经济效应分析,指出国际环境协定的实施将对各国总体的经济福利、国际资本流动、各国国际竞争力、产业结构调整以及环保科技进步等方面产生深远的影响.