I’m going to try something different in this post. Instead of reviewing a book, I’m going to look at a research paper called “Peak Stuff — did the UK reach a peak in material consumption in about 2001-3?”
Sounds pretty obscure, right? Why would anyone want to read such a thing let alone write about it?
Fair question. I’ll try to explain.
Many people these days believe our way of life is unsustainable, that the Earth cannot support a growing human population with a seemingly insatiable appetite for material goods built on an assumption of unlimited economic growth.
These are valid concerns. You only have to look at the headlines or perhaps just look out your window to see the impact humanity is having on the environment.
Yet it’s not all bad news. One positive development is that we are learning to produce more goods using fewer resources and less energy. This phenomenon is called dematerialization and it’s pretty widespread. You can learn more about dematerialization in a book called More From Less by Andrew McAfee which I reviewed here.
With enough dematerilization, some people predict (or hope?) that economic growth could become decoupled from resource consumption. First, resource consumption would grow more slowly than the economy as a whole. That’s called relative decoupling. Then, ideally, we would progress to absolute decoupling where the demand for resources and energy actually falls while the economy keeps growing. Decoupling would help relieve the pressure humans are placing on the environment.
Peak Stuff is a paper that looks at decoupling in the UK.
Peak Stuff was written back in 2011 by Chris Goodall, a British businessman, writer and former Green Party candidate who runs a blog called Carbon Commentary, associated with The Guardian Environment Network.
Goodall’s thesis is that the United Kingdom may have achieved absolute decoupling around 2001-3.
I’m going to walk through his argument because the method he uses to figure this out is just as interesting as his conclusion, and it can be applied to other countries too.
How would you calculate the amount of resources used by an entire economy in a year? (This sounds like one of those trick job interview questions you sometimes get asked at tech companies.)
Well it turns out you can weigh them.
National statistics bureaus in many countries, including the US and the UK, track the production, import, export, consumption and disposal of various materials by weight.
Goodall uses a simple flow model of the British economy illustrated in the diagram below to calculate the trends in resource consumption.
The model tracks material as it flows through the economy starting with inputs of natural resources. These fall into three categories:
- Biomass: Crops, natural fibers like cotton and hemp, meat, fish, timber
- Minerals: Ores, clay, sand, stone, gravel
- Fossil fuels: Coal, oil, natural gas
These resources are transformed into products we consume, like food, paper and cars, and eventually end up as waste.
Using government statistics, it is possible to measure how much the UK is producing and consuming at each step. Goodall tracks three key measurements.
- Total Material Extraction (TME): The total weight of all the biomass, minerals and fossil fuels extracted in the UK. Literally the weight of the stuff taken out of the ground.
- Direct Material Consumption (DMC): The amount of those materials actually consumed in the UK. So this is TME plus imports minus exports.
- Total Material Requirement (TMR): Finished goods imported into the UK contain biomass, minerals and fossil fuels consumed in other countries where they were made. TMR attempts to account for these additional resources by adding them to DMC.
Goodall shows that TMR in 2007 was 96% of its value in 2001 — a small but measurable decline. Even though the British economy was growing during those years, the total amount of raw material consumed in Britain during those years fell slightly. By 2009, TMR was only 81% of its 2001 level. This is a sharp drop but likely reflects the economic slowdown of the Great Recession.
I wanted to find out what had happened since 2009 so I went to the UK Office for National Statistics web site and found data for Direct Material Consumption. Here’s the chart showing data from 2000 to 2017. You can see a significant drop in 2008-2009 during the recession followed by a very slight decline in the following years when the UK economy has been growing strongly.
I couldn’t find the raw data for Total Material Requirement, or it might have been called something different on the government web site.
Goodall goes on to look at trends in some of the key goods from the middle column of his model, and at trends in waste disposal. In most cases there is a noticeable downward trend even before the Great Recession. Goodall concludes, tentatively, that the UK economy may have achieved absolute decoupling around 2001-2003.
There are a lot of questions you could ask about this paper:
- How accurate are the statistics compiled in the UK generally?
- In particular, is Total Material Requirement, which include estimates of the foreign resources contained in imported finished goods, accurate?
- Have the downward trends in Total Material Requirement continued after the Great Recession when UK economic growth resumed?
- What is missing from Goodall’s flow model? He himself has a section on fresh water, but, for example, he doesn’t talk about plastic and how it gets produced, consumed and disposed of.
- Are developed countries like the UK just exporting their resource consumption to developing economies like India and China?
Nonetheless, the fact that Goodall could find even tentative evidence for absolute decoupling is really startling. I’d love to see Goodall update his paper with the latest available data. But even if absolute decoupling has not been achieved in the UK, there’s pretty strong evidence of relative decoupling at least. That too is a step in the right direction.
This all sounds too good to be true. Can we really have both sustainability and economic growth? There’s a theory that as an economy develops it tends become more efficient in its use of resources. If this theory is correct it means that that developing economies should also move towards reduced resource consumption as they advance.
As Goodall concludes:
“…. it is a hypothesis that suggests that economic growth is not necessarily incompatible with sustainability. In fact GDP growth, because it brings technological progress which is correlated with more efficient use of resources, may help reduce environmental damage.” [p. 23]