Discussion And Conclusions

It has been suggested that the relationship between throughput and income has an inverted U-shape in the sense that rising incomes can be associated with lower levels of resource inputs in developed economies. This chapter has discussed and reanalyzed this evidence and finds no support for strong dematerialization. Empirical work discussed here suggests that, in the medium term, the relationship between income and throughput is probably N-shaped, with a saw-tooth pattern in the very long term. An explanation for this pattern is that, in an equilibrium phase, economic growth results in an equipropor-tionate increase in throughput. However, during times of radical changes in the technological and institutional paradigms, the relationship between throughput and income growth may be altered somewhat discontinuously, owing to technological advances in the processing and use (including substitutions) of materials.

Such a phase of dematerialization will not continue indefinitely, and the positive relationship between income growth and throughput growth is likely to be restored, albeit at a lower level of throughput per unit of GDP. The empirical data presented here also show where comparisons of data on throughput between the beginning of the 1970s and the mid-1980s go wrong: these years belong to two different classes of attractor points. One cannot conclude that dematerialization is occurring in developed economies from comparisons such as those conducted by Janicke et al. (1989). Investigations into the patterns over a longer period of time are required to determine the true relationship between resource use and income. Predictions on the future development of material use and dem-aterialization must take into account the stochastic imbalances in the relationship between material use and income.

The analysis conducted here is not limited to material and energy use. Some empirical work has suggested that there exists an inverted-U pattern, or environmental Kuznets curve, between several pollutants and income (cf. Selden and Song 1994; Grossman and Krueger 1995). Given the fact that emissions and wastes originate from the consumption of materials and energy, it can be expected that some pollutants would follow similar patterns and that in the long run the relationship between emissions and income might be N-shaped. Some evidence for this has recently been gathered by de Bruyn (2000) and Stern and Common (2000) who conclude that, owing to stochastic imbalances, the environmental Kuznets curve is likely to be spurious.

With worldwide continuing economic growth and developed countries being currently in an equilibrium phase of throughput and income, issues of scarcity, availability, exhaustion of natural resources and growing pollution may return to the research and political agendas. This is likely to occur after the current relinking phase has ended and prices of resources start to rise once again. (In fact, petroleum prices started rising rapidly in 1999, and the higher levels show every indication of being permanent.) Institutional and technological breakthroughs will then be required to reverse the current rematerialization phase.

One such period of radical change obviously occurred in the years following the first oil crisis (1974-5) when prices of energy and raw materials rose to unprecedented levels and environmental awareness was increasing. This may have prompted governments and business enterprises to reconsider their use of resources and to start a process of rationalization, or restructuring. A revival of environmental awareness may be the vehicle through which a new stage of restructuring may be introduced so that the positive relationship between income growth and throughput growth will again be shifted in a different direction, albeit only temporarily.

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