Saturday, July 9, 2016

2367. On Decoupling of Economy and Nature: The Issues and Collective Evidence

By Ted Trainer, July 8, 2016

The issue.
The “Tech-fix” faith is widely held, i.e., that technical advances will enable continual economic growth without unsustainable increase demand for inputs, especially energy, materials and environmental “services”.  This is known as the “decoupling” claim; i.e., that economic growth can be separated from growth in inputs to the economy, thereby enabling continued increase in production, consumption, economic turnover and “living standards” without running into serious resource and environmental problems.

The term “relative decoupling” refers to growth in need for inputs that is less or slower than growth in GDP but still positive, while “absolute decoupling” means growth of GDP with no increase in inputs, or a fall.

The essential points here are,
·      If the big global problems are to be solved there must be enormous absolute decoupling, because if resource demands are to be brought down to sustainable levels they must fall a great deal from present levels, and,
·      The following about thirty pieces of evidence on past and present trends makes clear that this claim is, to be polite, extremely implausible…to be less polite, so utterly unlikely as to be ridiculous. All the evidence found here contradicts it and none has been found to support it.

The most elaborate statement of the Tech-Fix case is given by the Ecomodernists. It contains several examples of past and potential technical advances, and “might be” arguments, but gives an extremely weak overall case, and does not deal with the decoupling evidence. Their main statement is,
Ecomodernism: Nature Unbound,   Brief critical comment on this position is included in
Another preliminary is that some indices, such as the common “national energy intensity” figures are misleading because,

·      They do not take into account the large and increasing amounts of energy and materials imported into a country in the form of produced goods as manufacturing is shifted to the Third World.  They only refer to “Domestic Materials (or energy) Consumption” whereas what matters is the “Material Footprint” of the nation, which recent studies have begun to analyse.
·      There has been considerable “fuel switching”, i.e., moving to forms of energy which are of “higher quality” and enable more work per unit. For instance a unit of energy in the form of gas enables more value to be created than a unit in the form of coal, because gas is more easily transported, switched on and off, or converted from one function to another, etc. (Cleveland et al., 1984, Kaufmann, 2004.)

            The record, the evidence on decoupling achievements.
 The historical record suggests that with respect to the crucial issue of materials use productivity or decoupling gains have been minor at best.  Consider the following notes on about thirty studies and reports.

Hattfield-Dodds et al. (2015) say that the efficiency of materials use has been improving at c. 1.5% p.a., but they give no evidence for this figure and other sources quoted below indicate that it is too high.

The OECD (2015) claims that materials used within its countries has fallen 45% per dollar of GDP, but this figure does not include materials embodied in the large volume of goods these countries import. When they are tallied rich countries typically show very low or worsening ratios.

Wiedmann et al. (2014) show that when materials embodied in imports are taken into account rich countries have not improved their resource productivity in recent years. They say “…for the past two decades global amounts of iron ore and bauxite extractions have risen faster than global GDP.” “… resource productivity…has fallen in developed nations.” “There has been no improvement whatsoever with respect to improving the economic efficiency of metal ore use.”

In another study Wiedmann et al. (2015) report on an input-output study of 186 nations.  They find that a 10% increase in GDP is accompanied by a 6% increase in materials use. The study takes into account “upstream” materials use, i.e., in production and transport and infrastructures needed to produce materials. This use is large… 40% of global raw materials extracted goes into producing goods to be exported. i.e., far more than the 10 Gt of goods traded.

Their main finding is that, “No decoupling has taken place over the past two decades for this group of developed countries.”  “…pressure on natural resources does not relent as most of the human population becomes wealthier.” 

Giljum et al. (2014, p. 324) report only a 0.9% p.a. improvement in the dollar value extracted from the world use of each unit of minerals between 1980 and 2009, and no improvement over the 10 years before the GFC. “…not even a relative decoupling was achieved on the global level.” They note that the figures would have been worse had the production of much rich world consumption not been outsourced to the Third World. Their Fig. 2, shows that over the period 1980 to 2009 the rate at which the world decoupled materials use from GDP growth was only one third of that which would have achieved an “absolute” decoupling, i.e., growth of GDP without any increase in materials use.

Diederan’s account (2009) of the productivity of minerals discovery effort is even more pessimistic. Between 1980 and 2008 the annual major deposit discovery rate fell from 13 to less than 1, while discovery expenditure went from about $1.5 billion p.a. to $7 billion p.a., meaning the productivity of expenditure fell by a factor in the vicinity of around 100, which is an annual decline of around 40% p.a. Recent petroleum figures are similar; in the last decade or so discovery expenditure more or less trebled but the discovery rate has not increased.

A paper in Nature by a group of 18 scientists at the high-prestige Australian CSIRO (Hatfield-Dodds et al., 2015) argued that decoupling could eliminate any need to worry about limits to growth at least to 2050. The article contained no support for the assumption that the required rate of decoupling was achievable and when it was sought (through personal communication) it was said to be given in the paper by Schandl et al. (2015.)  However that paper contained the following surprising statements, “ … there is a very high coupling of energy use to economic growth, meaning that an increase in GDP drives a proportional increase in energy use.”  (They say the EIA, 2012, agrees.) “Our results show that while relative decoupling can be achieved in some scenarios, none would lead to an absolute reduction in energy or materials footprint.” In all three of their scenarios “…energy use continues to be strongly coupled with economic activity...”

The Australian Bureau of Agricultural Economics (ABARE, 2008) reports that the energy efficiency of the nation’s energy-intensive industries is likely to improve by only 0.5% p.a. in future, and of non-energy-intensive industries by 0.2% p.a. This means they expect that it would take 140 years for the energy efficiency of the intensive industries to double the amount of value they derive from a unit of energy.

Alexander (2014) concludes his review of decoupling with respect to environmental impacts by saying, ”… decades of extraordinary technological development have resulted in increased, not reduced, environmental impacts.” 

Smil (2014) concludes that even in the richest countries absolute dematerialization is not taking place.

Beigler (2016) reports that efficiency improvements, which averaged 0.9% per year between 1990 and 2005, are about half those seen in previous decades. An analysis of 99 countries over 40 years showed no general decoupling. (It is not clear whether imports were included.)

Two cases where decoupling has been negative, i.e., growth has been accompanied by disproportionate increase in inputs… Cereal production since 1960 has multiplied by 3.4, but nitrogen application multiplied by 8.3 (FAOSTAT Database, Undated, Fig 2.9), and Alvarez found that for Europe, Spain and the US GDP increased 74% in 20 years, but materials use actually increased 85%. (Latouche, 2014.)

The IEA reports relative decouplings for per capita energy use in US, Canada, OECD. Fig 2.6.  Final energy use in the industry sector of the IEA21 increased by only 5% while output rose 39%, between 1990 and 2005. (p. 28), ( … but this was in a period when much heavy industry was moving overseas)

The IEA (2008) finds that there was little change for cement production (p 34.) The index for paper improved from 80 to 92. (Fig 3.5 p. 32, and aluminium went from c.16 kWh/kg to 15 over the period, but the future potential is limited. There was little improvement for cars, and slow improvement for electricity production.

Tverberg’s (2015) plot for the growth of energy and GWP shows parallel paths, with  energy a little lower. That is, energy does not fall away much from the GDP growth line.

Tverberg says, “In recent years, we have heard statements indicating that it is possible to decouple GDP growth from energy growth. I have been looking at the relationship between world GDP and world energy use and am becoming increasingly skeptical that such a decoupling is really possible.”

“Prior to 2000, world real GDP (based on USDA Economic Research Institute data) was indeed growing faster than energy use, as measured by BP Statistical Data. Between 1980 and 2000, world real GDP growth averaged a little under 3% per year, and world energy growth averaged a little under 2% per year, so GDP growth increased about 1% more per year than energy use. Since 2000, energy use has grown approximately as fast as world real GDP–increases for both have averaged about 2.5% per year growth.
Figure 10a for energy intensities for the world, shows little improvement since 1980. Fig 11 shows a drop from index 258 to 225 …and flat since 2000.”

Tverberg (2011) says the main cause for optimistic national claims would seem to have been outsourcing of heavy manufacturing.

 During the last century the global material supply has grown somewhat slower than primary energy supply.

The material and energy intensity of the global economy continuously declined towards 30% (materials) and 50% (energy) of its value calculated for 1900.

Krausmann et al. (2009) say that most of the reduction in material intensity was due to the declining intensity of biomass use, while the intensity of minerals use actually increased.

Energy intensity declined by 0.68% per year, and materialintensity even by 1% per year. (p. 10.) That is, energy needed per unit of GDP would take 106 years to halve.

Cloete (2015) says, “Some time ago, I plotted the fraction of the US economy comprised of manufacturing against energy intensity to find an almost perfect correlation (see below). It therefore appears as if the outsourcing of energy intensive labour to developing nations (and buying back the goods with dollars created out of thin air) is the primary cause of US energy intensity reductions.” 

Australian petroleum products consumption increased from 27,902 million litres in 1970 to 52,095 Ml in 2010,an approximately 1.75% p.a. exponential rate of growth.  In the same period GDP increased at 2.5%-3% p.a.  (Again around the 0.6 multiple above.) So at this rate by 2050 petroleum consumption would be about 87% higher than now.

World Steel Association, (2016), reports that the energy needed to produce 1 kg of steel in the US fell 13% between 2000 and 2014, i.e., at an average 0.325% p.a., meaning that it would take more than 200 years to halve.

Similar conclusions re stagnant or declining materials use productivity etc. are arrived at by Aadrianse, 1997, Dettrich et al., (2014), Schutz, Bringezu and Moll, (2004), Warr, (2004), Berndt, (1990), Schandl and West, (2012), and Victor (2008, pp. 55-56).

The significance of EROI.
This is probably the most important issue relevant to the tech-fix and decoupling claims. The Energy Return On Invested energy for overall energy production/supply is falling. The world EROI for the production of oil and gas has declined from 30:1 in 1995 to about 18:1 in 2006. (Hall, Lambert, and Balogh, 2014. See also Nafez, 2016, Murphy, 2010.), Values for the new fossil fuel sources such as via fracking are low; for tar sands and oil shale it is around 4 and 7. Values for renewables are also low; wind is best with an estimate around 18, biomass ethanol is c. 4 and biomass diesel about 2. PV is controversial, usually claimed to be 8 but some argue 2-3. These figures represent a “negative decoupling” for energy over time, i.e., technical advance has not been able to prevent the amount of energy produced per unit of effort from decreasing.
To summarise:
This evidence indicates that the best estimated decoupling rates indicate that as GDP rises 1% materials or energy used rise .6%.  This would mean that by 2050 normal 3% p.a. GDP growth would have multiplied it by 4, and that materials use would be 2.4 times as big as it is now. This is obviously far from keeping materials demand from increasing as GDP increases, let alone dramatically reducing it as is needed.

None of this evidence provides any support for the general tech fix faith with respect to demand for energy, materials or environmental impact. Ecomodernist claims assume very large increases in output can be achieved while resource demands are kept down to sustainable levels, but all the evidence found in this review shows that this is flatly contradicted by previous and present technical advance. It is very likely that normal economic growth will continue to be accompanied by marked increases in demand for materials and energy. Yet present demands are grossly unsustainable, and if all were to live as rich nations expect to resource demands are likely to be tens of times greater than they are now. (See the first two pages in Sustainability: The Simpler Way Perspective.

This constitutes a powerful case that technical advance isn’t capable of solving the big global problems and that for transition to some kind of Simpler Way is the only path to a just and sustainable world.

            Appendix: Would renewable energy make a difference?
The transition to renewable energy also seems likely to significantly increase energy needed to build the energy sector.  For wind to equal the output of a coal-fired power station, about 2,000 turbines of 1.5 MW capacity would be needed, and these might weigh 400,000 tonnes, (possibly 700,000+ tonnes) and most of this would be energy intensive steel, plastic and cement. The embodied energy might be 12 PJ. The power station might weigh only 10,000 tonnes, (?) Certainly supplying the perhaps 120 million tonnes of coal to the power station over a 40 year lifetime favours wind on the materials demand account.  However the energy needed to supply that amount of coal (if EROI = 46) might take 1/46 x 120M x 24 GJ, = only 4.26 PJ. So on the energy account transition to a renewable system would seem to greatly worsen the situation, not decouple.

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