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Rsta 2016 0383
Rsta 2016 0383
degrowth
rsta.royalsocietypublishing.org
Giorgos Kallis
ICREA Professor, ICTA, Autonomous University of Barcelona,
Bellaterra, Catalunya, Spain
Review GK, 0000-0003-0688-9552
Cite this article: Kallis G. 2017 Radical
dematerialization and degrowth. Phil. Trans. R. The emission targets agreed in Paris require a
Downloaded from https://royalsocietypublishing.org/ on 03 October 2023
Keywords:
degrowth, dematerialization, decarbonization
1. Introduction
Nation states committed in Paris to significant reductions
in carbon emissions. Reducing carbon emissions requires
Author for correspondence: reducing material use [1]. This dematerialization is
Giorgos Kallis ‘radical’, first because of its unprecedented scale, and
e-mail: giorgoskallis@gmail.com second, because of the significant social, cultural and
political changes it will entail [2]. The thesis of this paper
is that radical dematerialization is not compatible with
economic growth. Less material use will, in all likelihood,
come only with less output, that is with a smaller
economy. Vice versa, policies of radical dematerialization
will slow down the economy. Capitalist economies,
however, become unstable when they do not grow [3].
Economic slowdowns often have negative social effects.
The question is then whether, and how, could we
manage, or even prosper, without growth [3,4]. A main
obstacle to strict policies for dematerialization is their
presumed negative effect on growth. This rests on the
assumption that a lack of growth is always disastrous.
If the absence of growth is manageable, then this makes
it easier to implement policies that drastically reduce
material demand.
2017 The Author(s) Published by the Royal Society. All rights reserved.
Section 2 outlines the field of ecological economics (EE) and its understanding of the economic
2
process. This provides the theoretical and empirical backbone for the claims made in this article.
Section 3 argues that it is unlikely that material use will be reduced if the economy grows.
rethink economics from an ecological point of view [6]. It is a diverse field of research reclaiming
the classical economic approach, in which land and resources were essential factors of production.
Five basic insights from EE are presented below:
(1) The economy is a process of material transformation driven by human and non-human
work.
(2) Efficiency improvements lead to more, not less, resource use.
(3) Factors of production—resources, labour and capital—are complements, not substitutes.
(4) Services embody significant amounts of energy and materials.
(5) Externalities are cost-shifting successes.
and economic output [14]. Economists accounting for growth attribute it mostly to ‘total factor
productivity’—a name given to all factors other than capital and labour that affect growth—a
shorthand for ‘technological progress’. But as Ayres & Warr [9] show total factor productivity is
strongly associated with the amount of energy used and the efficiency of conversion of energy
inputs into useful work. Technological progress is therefore progress in using more energy, more
efficiently.
If energy is a ‘cause’ of economic growth, as these studies suggest that it is, and if fossil fuels
are a unique source of high EROI, then decoupling growth from fossil fuels is less likely than
conventionally believed. If the economic process is the application of energy and human work
on the transformation of materials, then economic growth is also likely to be strongly coupled
with material use (see §3). Couldn’t, however, economic growth and resource use be decoupled
by using resources more efficiently?
Certain resources may also not be substitutable. Without getting into details, standard
economic theory assumes perfect substitution between the factors of production (capital, labour,
resources), and unlimited possibilities of substitution between specific resources or materials (say
fossil fuels substituting energy from biomass). There are two problems with this.
Firstly, mutual and full substitutability means that goods and services could in principle be
produced by any of the three factors alone, without the use of the other two. This cannot be
right. To fly, a plane needs both pilots and kerosene. The factors of production are complements,
not substitutes. Machines require workers to operate them, and labour requires tools to be
productive [9]. For certain economic processes, there is a minimum requirement of each factor
without which the process cannot take place.
Secondly, it is reasonable to expect that as resources become scarce and their relative price
increases, investment will go into research and development of substitutes. As fossil fuels get
more expensive, for example, other sources of energy may emerge as substitutes. Whereas this
might have been true in the past and for certain resources, for example, substituting fuel wood
with fossil fuels, the possibility of substitution cannot be asserted a priori independently of
concrete situations. There might or there might not be a substitute for fossil fuels or certain
scarce materials. This question is one of engineering, not of economics. One cannot assume
that there will always be substitutes. And even if there are substitutes, one cannot assume that
these substitutes will be able to maintain the same scale of the economy or rates of growth.
If fossil fuels, for example, are substituted by lower EROI renewables, this will reduce the
total amount of useful work provided by energy sources and dampen the scale and growth of
the economy.
A final theoretical possibility under which the economy could dematerialize and grow is
through structural change. If a growing share of output is provided by services that use few
materials and these services substitute output from more materially intensive goods, then it
might be possible to combine growth with dematerialization.1 But do services use fewer materials
and energy?
(e) Cost-shifting
The environmental costs of economic activities are often considered as ‘externalities’, costs that
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are not accounted for within existing markets. This view presupposes the possibility of an all-
encompassing market where nothing will be external to it. In reality, ‘cost-shifting’ is a pervasive
feature of market activity, where businesses try to increase their profits by shifting their costs to
others, or to society as a whole, when and if they can [23]. Externalities are therefore cost-shifting
‘successes’, rather than market failures [23].
Ever since the colonies, growth is fuelled by the extraction of surpluses in the imperial centres
by exploiting people and environments elsewhere [24]. If such costs were internalized, probably
there would not have been growth to begin with. An ‘internalization’ of ecological or carbon
costs today would possibly bring growth to an end, especially if accumulated debts from the
past were included. This is why carbon or other environmental taxes are resisted by the powerful
economic interests that profit from the externalization of carbon or environmental costs. As Raj
Patel [25] vividly puts it, the social and ecological cost of a McDonald burger is in the order of
200$. McDonalds would not have a business if it was to internalize its costs.
2
A question also is to what extent GDP growth might be inflated from financial services—20% of GDP in some advanced
economies—and private or public debt.
260 6
240 GDP
material intensity
80
1980 1985 1990 1995 2000 2005 2010
Figure 1. Trends in global material extraction, GDP and material intensity (kg/$) 1980–2013 (data from the WU Global material
flows database and the World Bank; indexed values, 1980 values equal 100).
0.6
0.5
0.4
0.3
0.2
0.1
0
–0.1
material footprint domestic material consumption gross domestic product
Figure 2. Relative changes in OECD material footprint, domestic material consumption, and GDP from 1990 to 2008. GDP is
calculated as purchasing power parity using 2005 US Dollars as the base year. Values are plotted as X = (Xt 2 − Xt 1 )/Xt 1 ;
t 1 = 1990. Figure from Wiedmann et al. [22].
used to produce the goods and services that they consume, increases hand in hand with the
size of their economies (figure 2). There is no sign of peak-stuff if one looks at material footprint
instead of domestic material consumption (the actual materials consumed, plus imports minis
exports). Despite substantial deindustrialization and de-agrarianization, the material demands
of the so-called ‘service economies’ continue to grow.
Take California: the information sector accounts for 8% of the total state product, 21%
together with business and professional services that include computer systems and design [31].
Agriculture’s share of the economy is down to 2%. Yet, the state’s water footprint grew almost
40% from 1992 to 2010 [21].
Research on individual metals confirms a similar story to that of aggregated material flows.
The Jevons’ paradox is confirmed for 57 different materials for all of which there is no evidence of
dematerialization. Increases in consumption and production outpace savings from technological
improvements [32]. And at the sites where metals are extracted, conflicts intensify because of the
negative environmental and social consequences of extraction [33].
The separation in the trends of domestic material consumption and material footprint in high-
income economies is not evidence that they are doing something better. It is a by-product of the
globalization of the economy. Industrializing economies produce the consumer goods of service
7
economies [30]. (The idea that one day all economies could graduate to be service economies with
saturated material consumption raises the question who would produce then their industrial
future with structural changes in the economy, or the advent of new materials and technologies.
But on this basis, no econometric study could ever be a basis for policy since we can always hope
that with sufficient will we can change established causal relations.
In conclusion, the more (less) an economy grows, the more (less) materials it uses. The next
section argues that the reverse holds true too. Radical dematerialization is likely to slow down
the economy.
Assuming that the EE diagnosis is correct, a decline of economic output is inevitable. The
question is whether we will follow a ‘prosperous way down’ [19]; or grow more and collapse after
crossing planetary boundaries. Degrowth research investigates under what social and political
conditions the inevitable downscaling can become prosperous and not catastrophic [42,43].
This includes policies that make degrowth stable, reducing the dependence of wellbeing upon
growth [3,42].
The next section focuses on three economic policies that can act as levers of change in
a possible transition: work-sharing, green taxes and public money. These policies do not
directly target material use. Yet they are important from a radical dematerialization perspective.
They facilitate a downscaling of the economy that will reduce material use. And they secure
wellbeing in conditions of economic contraction—a likely outcome of strict dematerialization
or decarbonization policies.
6. Conclusion
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The take-home message of this article is that decarbonization and dematerialization are
incompatible with economic growth; and that strict policies for decarbonization and
dematerialization will have a negative effect on growth. This requires thinking how to manage
without growth. Three policies were indicatively discussed: sharing work, taxing resources and
energy instead of work, and creation of money by the state, redirecting it to a green transition.
All this is a tall order. Given the current political climate, opting for a voluntary ‘prosperous
way down’ is extremely unlikely. The pursuit of growth has the features of a ‘collective action’
tragedy. Without sufficient international governance, each nation is bound to pursue growth in
the search for economic and military advantage in a globalized world. The end result is likely to
be ruin for all.
Understandably, some prefer to imagine against historical experience, that it is possible
to decouple resource use from economic growth, and to fuel growth with renewable energy.
The technological achievements during the last 200 years or so of capitalism fuel this hope.
Yet previous technological achievements were energy and resource-intensive, accelerating the
transformation of matter and the fresh occupation of new territories. Capitalism has been
extremely good at relentlessly and violently expanding; there are few signs that it can be as good
at peacefully contracting.
It might well be the case that ‘the politically acceptable is ecologically disastrous while the
ecologically necessary is politically impossible’ [65]. Scientists, however, should not limit the
pursuit of truth within the confines of the politically acceptable. This article provided theoretical
and empirical evidence for such an inconvenient truth—further growth is not ecologically
sustainable.
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