Upload
others
View
17
Download
0
Embed Size (px)
Citation preview
DEMATERIALIZATION, EMPLOYMENT ANDCOMPETITIVENESS IN A GLOBALIZED ECONOMY
Paper prepared for the plenary session Iof the Fifth Biennial Conference of theInternational Society for Ecological Economics (ISEE)"Beyond Growth: Policies and Institutions for Sustainabiliy"November 15 - 19, 1998, Diego Portales Convention Center, Santiago de Chile,
by
FriedrichÊHinterberger and FredÊLuksWuppertalÊInstitute HamburgÊSchoolÊofforÊClimate,ÊEnvironment,ÊEnergy EconomicsÊandÊPolitics
[email protected] [email protected]
http://members.aol.com/FritzHint
Contents1 Competitiveness, employment and the environment: a magic triangle2 Material flows: the Wuppertal approach to environmental sustainability3 Some empirical data: the recent history of (de)coupling jobs from matter/energy flows4 Employment, material flows and economic activity5 The "fourth corner": the institutional setting6 Sustainability in a globalized economy: an international perspective7 Toward an integrated policy: an ecological economic policy
Abstract
There is a level below the general dimensions of sustainable development (economic, social,
ecological) which has to be considered to reach effective and operationable policy goals. We present
an interpretation that includes competetiveness, employment and throughput (or scale) reduction or
dematerialization. All three goals are related to securing the development conditions of economic,
social and environmental systems. This paper discusses the three goals and stresses the interrelations.
Some empirical data (for Germany) will be presented. It is shown that the institutional setting behind
economic and social processes is decisive and can be formulated as a "fourth corner". In the context
of globalization, an international perspective is important in all three (four) aspects. Key elements for
an integrated (economic and environmental) policy for sustainable development will be presented. It is
emphasized that a policy aimed at sustainable development, understood as the simultaneous
achievement of competetiveness, employment and dematerialization, must address micro-, meso-,
macro-, as well as meta-level problems.
This paper can be downloaded from: www.wupperinst.org !
- 2 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
"In the past, economic development and environmental protectionwere considered mutually antagonistic goals. Promotion of onewould inevitably mean damage the other. In recent years theconcept of 'sustainable development' has attempted to overcomethis apparent conflict: it is now widely accepted that by integratingenvironmental concerns into economic policy, business andindustrial activities can be 'greened'." (Jacobs 1994, p. 1)
1 COMPETITIVENESS, EMPLOYMENT AND THE ENVIRONMENT:A MAGIC TRIANGLE
The title of our conference, "Beyond Growth: Policies and Institutions for Sustainabiliy", reflects not
only current priorities in ecological-economic research, but also the necessity of action to be taken on
different levels. Sustainable development will not be achieved without appropriate policies, and not
without social and economic institutions that "fit" a sustainable development pattern which is "beyond
growth". In this paper, we will deal with this problematique in an international context: How are
competetiveness, employment and the environment related to one another in a more and more
globalized, at least internationalized, world? And what does this imply for political and institutional
steps that have to be taken in order to achieve a development that serves today's as well as
tomorrow's needs?
There is a level below the general dimensions of sustainable development (economic, social,
ecological) which has to be considered to reach effective and operationable policy goals. This paper
will discuss such goals and stress the interrelations. In general and qualitative terms, these goals can
be described as securing the (economic, social and ecological) development conditions of economic,
social and ecological systems (see figure 1). Among the key features are:
¥ competitiveness for securing economic development,
¥ employment as a basic feature of social development and the
¥ reduction of throughput as a precondition for environmental sustainability.
It seems important to separate conceptually the level of goals from the level of policies that are
designed to achieve these goals. To emphasize the conceptual distinction we make: we do not claim
that competetiveness, high employment and througput reduction respresent the "fulfillment" of
sustainable development. What we have in mind is that there is a level below the general dimensions
of sustainable development (economic, social, ecological) which has to be considered to reach
effective and operationable policy goals. We present of course one interpretation. We think, however,
that the interpretation presented here includes rather significant goals: For competetiveness and
employment this becomes evident even from a superficial view of the political scenery, while the
goals of throughput (or scale) reduction is a core policy subscribtion to most ecological economists,
which is not yet on top of the political agenda.
- 3 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
Quelle: F. Hinterberger, 1998 Wuppertal Institut UM – 203e-1/98
The social dimension:Intra- and intergenerational equity,
rough indicator: employment
The economic dimension:Efficiency, structural change,
and competetivenessrough indicator: GDP per capita
The ecological dimension:Preserving ecosystems
rough indicator: material flows
SustainableDevelopment
Figure 1: Sustainability as securing development conditions of ecological, economic and social systems
Wherever political organisations are concerned with visions for future developments, competetiveness
in a globalized world is key, as well as cures for mass unemployment and, increasingly, also the
problem of environmental pressures arising from all sorts of economic activity. But the
connectedness among these goals is ambivalent. There are positive and negative relations. A central
question in this context is therefore the compatibility of competetiveness and employment on one
hand, and ecological goals on the other.
The economic dimension of sustainable development relates to competition and
competitiveness, which today are mainly perceived as matters of (relative) costs and (unit)
productivity, a view which is too narrow and too static to fully understand differences between
countries and regions (see Hinterberger/Luukkanen/Messner et al. 1997). In the longer run and from a
dynamic/evolutionary perspective, it is rather the innovative capacity of a society which determines its
perfomance in relation to others. For this, relative costs and supply side conditions are only but one
determining factor. Others are the society's institutions (from informal networks to the education
system) as well as the values and beliefs of its members toward innovation and competitiveness, but
also mutual trust, the ethics of work etc. Faucheux et al. (1997, 101) define competetiveness as "a
dynamic process involving learning, adaptation, and innovation." Messner (1997) shows that
differences in the economic performance between, for example, Latin America and South-East Asia
cannot be explained by a neo-classical look at factor availability and relative prices nor by some kind
of dependency theory. It is rather a more complex picture of micro, meso, macro and meta conditions
that help to explain such differences. Indicators of economic development/competitiveness are (the
growth of) gross domestic product and (human-made) capital stocks, representing the genuinely
- 4 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
economic factor of production. While the other two, labour and land/nature can be regarded as
primary inputs, representing nature and society, human-made capital can eventually be traced back to
the other two that were necessary to produce it.
Employment as a key element of social development and therefore of the social dimension of
sustainable development is certainly closely related to the economic performance. But here not only
economic growth and the relative price of labour are relevant. Zweim�ller (1998), for example, shows
how the interaction of innovation, costs and demand/supply conditions on labour markets co-
determine empoyment as a macro-economic result. As a quantitiative indicator we may here refer to
the rate of (un)employment (measured in the number of persons employed or unemployed) and the
volume of employment (measured in working hours). It is difficult to assess ex ante the employment
effects of environmentally positive developments (for an overview over German studies analysing the
relationship between environmental protection and job creation, see Klingert et al 1998). In the
following, we will dicuss some past developments in the relationship between environmental
indicators and employment. One important finding to be shown is that there is not at all a fixed
relationship between employment and these indicators. In his 1994 study for the WWF, Michael
Jacobs showed that "environmental policies do not, in general, destroy jobs. On the contrary, many
environmental measures are likely to be job-creating. Even more importantly, it shows that
environmental improvement is likely to become an essential part of economic development over the
next twenty years - to the extent that failure to enact environemtal protection measures may lead to
worse economic performance, and therefore ultimately fewer jobs." Today, such a view is widely
acknowledged and fostered by many studies. On the other hand, the extent of unempoyment today
has reached a magnitude that makes it impossible to solve the problem simply by 'greening jobs'.
Let us now turn to environmental sustainability. In economic (and still general) terms, the goal
can be interpreted as a reduction of global external effects of today's economic activities on other parts
of the world and on future generations (which shows how strongly the socio-ethical goals of
intergenerational and intragenerational justice are related to economic and ecological issues) The
problem is the difficulties (or rather impossibility) to determine externalities; climate change is just
one global environmental problem and most probably there are more to come (and understand) in the
near future. Even if an internalisation were possible, this would lead to a much too detailed
intervention of public policy into economic processes (see Hinterberger et al. 1996). "Unlike past
technological 'externalities', current environmental problems stem from the accumulation of small
effects, which at some point in time appear to exceed the critical boundaries of the ecosystem or at
least the public perception of those boundaries" (Kemp/Soete 1992, p. 438). In this paper,we are
concerned with this kind of global environmental threats. Environmental policy of the past has been
running behind the ever changing faces of the different environmental problems. Such an analysis has
lead to the claim that a more comprehensive view is needed on environmental problems and the policy
aimed at these problems.
- 5 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
We will present such a comprehensive vision of environmental problem in the following
section. Before elaborating the vision, however, it seems appropriate to indicate how the approach we
are suggesting relates to our evolutionary vision. This seems also necessary because the indicator we
present is not (yet) as accepted as, for example, GNP and unemployment figures as socioeconomic
conditions. As already indicated, we understand sustainble development above all as the maintenance
of development conditions of different systems. In the case of ecological systems, this means that
anthropogenic interventions must be substantially reduced. There is one dimension that is of utmost
importance in this respect: the scale, i.e. the throughput of the economy. This one (albeit huge and
complex) dimension is key for the development conditions of natural environments. Hence, the
reduction of complexity we present in the following section is perfectly compatible with our
evolutionary vision Ð indeed, the former is a direct consequence of the latter.
2 MATERIAL INPUTS: THE WUPPERTAL APPROACH TO ENVIRONMENTALSUSTAINABILITY
The Wuppertal Institute developed a methodology of material flow accounting which can provide
comprehensive indicators of the anthropogenic interference into nature. This follows the idea that a
reduction of material flows is necessary to reduce environmental externalities. While the quality of
material flows plays a decisive role for the ecological stability of concrete eco-systems, their quanity
can be regarded as a very rough but comprehensive indicator of human/societal/economic
interventions into nature, which should be reduced: this is how we can define the term
dematerialization (Schmidt-Bleek 1994). It is widely acknowledged within ecological economics that
the scale of the economy is a central determining factor for ecological sustainability (see especially
Daly 1991), and the material flow approach is a method that can operationalize this scale in a
meaningful way (see Luks 1998a, 1998b, Ch. 8).
The Wuppertalian methodology for material input (MI) accounting (Schmidt-Bleek et al 1998)
can serve as an operationalization of Herman DalyÕs concept throughput/scale (see Luks 1998a). It is
obvioius that resource use does not only include the utilization of source functions but also the
pressure put on ecological sinks. To be meaningful from an ecological point of view, it must also
include the anthropogenic material movements that do not enter the economy. Measuring material
inputs is an operationalization of scale, since material input minus stock accumulation equals the
output of the industrial metabolism. Hence, with material input figures for, say, regions and
companies, at hand, we can determine the scale of the throughput of an economy. By including
Òecological rucksacksÓ or Òhidden flowsÓ, material input (MI) is the total material and energy flow (in
mass units like kg or tons) and includes not only the materials converted within the economy but also
those "left aside", for example at mining sites. As hidden flows may also be harmful, this broad
concept of scale is clearly beneficial.
- 6 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
The input approach concentrates on the sources of matter-energy-flows, as opposed to the
emphasis on emissions of the environmental policies currently in practice. Since the quantity of
ressource movement and the intensity of use of material, energy and area represents a hazard to the
environment, the input oriented ecological economic policy advocates for ÓdematerializationÒ, that is
a reduction of the material flows set in motion by human intervention into the ecological system. This
can be achieved by a very far-reaching structural change of the economy. At the same time this
approach is based on the precautionary principle taking into account the interests of future
generations, global aspects and the long term stability of the ecosphere.
One of the ways to quantify material throughput is the MIPS (material intensity per unit of
service) concept. 1 Material inputs are related to a unit of service by calculating from the extraction
until the disposal of a product all the material movements activated for the provision of any kind of
service. These material flows are divided into movements of soils, water, air, abiotic and biotic raw
material. The total material input is then related to the units of service available from the product to
receive MIPS -the material input per unit of service. These are units of use, which help to make
different products (i.e. different kinds of satisfying needs) comparable. A growing number of
enterprises already commit themselves to reducing the material intensity per unit of service (or the
increase of units of service with the same MI) by rethinking and reorganizing their production process
(Liedtke et al. 1998).
The same methodology of material flow accounting has also been used to calculate the material
flows of entire economies (Bringezu 1997). The Direct Material Input (DMI) includes those flows that
enter the economy for further processing, e.g. grains and petroleum. The Total Material Requirement
(TMR) refers to the sum of MI and rucksacks and includes anthropogenic landscape alterations: "It is
the total material requirement for a national economy, including all domestic and imported natural
resources. TMR gives the best overall estimate for the potential environmental impact associated with
natural resource extraction and use" (Adriaanse et al. 1997, 8). In other words, TMR, is the sum of
DMI and ecologial rucksacks.
Of course this concept is criticized for not taking into account the quality (e.g. toxicity) of
substances. The use of the material input framework may involve consideration of all known eco-
toxicities of the material flows associated with a good or service. Other things equal, a reduction of
material input must lead to a considerable reduction of toxic chemical and waste flows through the
technosphere and into the environment. What is more, in most cases it is impossible to distinguish
between "good" and "bad" throughput. There are, however, cases in which it is obvious that such a
differentiation is feasible - plutonium, for example, has a toxic quality that is very different indeed
from, say, sand.2 In many (indeed most) cases, however, it is not possible to anticipate the impacts
1 See www.wupperinst.org for more details.2 Biotechnology is an obvious case: it may be a material-extensive technology with possibly dangerous effects.
These dangers have, of course, to be taken into account. A low material throughput cannot per se serve as anargument for the desirability of a technology (Hinterberger et al. 1996, pp. 89ff.).
- 7 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
human activities have on the natural environment. Besides that, it is of course not only the quality but
also the quantity of throughput that disturbs natural systems. To make this clear one could think of an
industrialized economy that does not produce toxic substances at all - just "good" throughput at
today's level. Would this imply to environmental problems be solved? Clearly, the answer is no. The
waste problems, the greenhouse effect (CO2 is not a toxic substance in the traditional sense), soil
erosion, the threat to biodiversity - none of those problems would be solved if we just "clean up our
throughput" but let it continue to grow. Reducing scale means reducing the potential ecological
impacts of economic activities. The throughput of the industrial metabolism is a crucial factor for the
sustainability of economies. The scale metaphor, which refers to the volume of this throughput, has
provided important insights into this question and has contributed to the acknowledgement of the
importance of the quantity of matter and energy used in the economic process. Reducing scale is
necessary, certainly not sufficient to achive sustainable development.3
"In the end, whether you think economic growth will be beneficialor harmful to the environment in the long run remains a matter ofbelief. Science is not able to give one view preference over theother."Neumayer 1998, p. 172)
3 SOME EMPIRICAL EVIDENCE: THE RECENT HISTORY OF (DE)COUPLINGGROWTH FROM MATTER/ENERGY FLOWS
In macroeconomic terms, we must come to grips with the potential as well as the limits of delinking
(both of which have, of course, considerable political aspects). Taking into account the social aspects
of sustainability, we need to ask wether GDP growth does really increase the economic and social
sustainability or the quality of life. If one considers well-being, services, GDP, material flows and
environmental impact, i.e. a "chain" that relates the purpose of economic activities with the ecologial
impact of these activities, enourmous potentials for delinking become evident, at least from a
theoretical point of view (for a thorough analysis of this issue, see Femia et al. 1998, Malaska 1998).
Well-being can clearly be kept constant, while impact is substantially reduced if
¥ (A) the "well-being intensity of services",
¥ (B) the "service intensity of income/production",
¥ (C) the material productivity of income/production", would increase and/or
¥ (D) the environmental impact of a material throughput would shrink.4
3 Suggestions for a more detailed concept, which allows for qualititive differentiations of material flows are in
preparation (Hinterberger et al. 1999), but available empirical data concentrates mainly on the bulk materialflows for countries, companies, products and services
4 Should the factors just mentioned all decrease by the same proportion, a tenfold reduction of their product isreached by a 1.78fold change in each of them. Spreading this in a time span of, say, 50 years, a 1.6% annualchange of each factor would more than suffice. Changes of such a magnitude are not unusual within the realmof a "normal" technical and structural economic change.
- 8 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
While such a view seemed quite radical some years ago, it is today accepted by large and growing
parts of industry, international and national organisations as well as by environmentalists. The
political problem is how to give to economic development a direction which is needed for sustainable
development. But what about the "real world" Ð what can we learn from empricial evidence?
There are theoretical and empirical aspects to the "delinking" of employment, material flows
and GDP; both structural and scale effects have to be considered. The empirical debate on the
economy-ecology-relationship is dominated by the so-called Environmental Kuznets Curve (EKC). A
general "Kuznets-relationship" has so far not been established, i.e. it is not at all certain that
environmental pressure increases with rising income and then, after a certain plateau, starts to declince
("inverted U"). As far as future developments are concerned, the EKC-thesis gives no reason to be
overly optimistic about an "automatic" delinking of economic activities and environmental pressures.
Up to now, problems related to the use of indicators, to the question of explanatory variables other
than incomes and the to the models applied all leave it an open question whether there is actually
something like a EKC. Caution should be the order of the day.5 The issue of the appropriate indicator
is of special interest: while some studies observe EKCs for some pollutants, highly aggregated
indicators so far do not reproduce EKC-results (Rothman/de Bruyn 1998, p. 145). From this follows
that "policy matters", i.e. that political action is needed to realize delinking potentialities. Since one
cannot manage what cannot be measured, appropriate indicators are necessary. Here, a
comprehensive indicator such as TMR is of special interest, because the magnitude of TMR would not
change over time if
¥ a shift of material intensive production occurs from domestic production to imported goods and/or
¥ different materials would be substituted for each other.
Ayres (1994, 17) has observed that "narrowly conceived environmental policies over the past 20
years and more have largely shifted waste emissions from one form (and medium) to another, without
significantly reducing the totals" (our emphasis). The "totals" are of course what we refer to as scale
or TMR. Hinterberger/Renn/Sch�tz (1998) present a time series of some of the quantitative indicators
presented in the preceeding section (figure 2):
¥ material flows (measured in Total Material Requirement and Direct Material Input6; see Adriaanse et
al. 1997) and
¥ GDP and capital stocks as a measure of economic activities.
5 See Rothman/de Bruyn 1998 and the other articles in the special issue of Ecologial Economics [May 1998] on
the EKC as well as de Bruyn/Opschoor 1997 and Neumayer 1998.6 While the first (abbr. TMR) is more compehensive, the latter (DMI) excludes material flows from abroad as
well as overburden in mining.
- 9 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
1,00
1,20
1,40
1,60
1,80
2,00
2,20
2,40
2,60
2,80
3,00
time
GDP
DMI
TMR
Index: 1960=1
1960 19941970 1980 1990
0,50
1,00
1,50
2,00
2,50
3,00
3,50
4,00
capital stock
GDP
working hours
Index: 1960=1
time1960 19941970 1980 1990
Source : WI Wuppertal Institute UM-740/741e / 98
Figure 2: Relative delinking (weak dematerialization) from economic growth in Germany
The (West) German TMR has grown by 55% between 1960 and 1990, four fifth of which areattributable for the first 15 years of that period of massive (re)construction of the German economy.
There is some sort of dematerialization, which, however, cannot be attributed to conscious
dematerialization policies. Many natural resources, which are part of the TMR, may be ecologically
scarce, but not economically scarce (see Hinterberger et al. 1998, 26; on the relationship between
- 10 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
economic and ecological scarcity see also Luks 1998a). The German economy, like other
industrialized economies, shows a structural break around the two energy crises, which can be seen in
figure 2. While GDP and capital stock grew steadily, both indicators of material flows ceased to grow
after 1974.7 German unification (the merger with the less efficient economy of the former GDR) lead
to a sharp increase of material flows through the German economy (higher than the growth of GDP
and population through unification), hence we have two turning points with respect to the material
flows of the German economy, which were also of outstanding socioeconomic importance: The oil
crises of the 1970s and the unification of East and West Germany.
The preceeding remarks show what - in similar terms - many other studies have shown
before. But only very recently do we have a comprehensive picture of material flows instead of rather
singular invironmental indicators. What this data show is that despite of an increase in resource
productivity, there is no indication for dematerialization, i.e. a decrease in resource flows in absolute
terms.8 Investiating this in more detail, we can find counter-balancing effects. A recent study breaks
down the relation between economic and ecological indicators to 55 sectors of German input/output
tables. The relationship between productivity and growth in the ecological context resembles the same
relationship with respect to production and job creation. Here, productivity increases must be
countered by growth in production in order to aviod unemployment due to technical progress. Moll et
al. (1998) investigate the changes in level and structure of economic indicators and material
throughput of the German economy between 1980 and 1990. While material flows (in terms of TMR)
increased only by 0.8 % in that period, GDP grew by 25 %. A decomposition analysis shows that
ceteris paribus this would have increased TMR by 13% while structural changes forced TMR to
decrease (by 22 %). Additionally, resource extraction technologies became more inefficient (which,
again ceteris pariubus, would have increased TMR by 8 %). Together with some other (but minor)
effects that lead to keep TMR in fact almost constant (+0.8%)(p. 28).
A similar story can be derived from a look at the changes in final demand (consumption, investmentsand exports). Especially an increase in the demand for non ferrous metals and non ferrous metalproducts was responsibe for increasing material demands of the economy: The TMR of this sectorincreased by 70.9%. The production of road vehicles used 24% more TMR in 1990 than in 1980.Other sectors that contributed to an increase of TMR are electric power, steam, hot water (49.7%),musical instruments, toys, sports equipment, decoration (47.1%), electrical machinery and equipment(28.7%) and chemical products (19.9%). On the other hand, the TMR of coal and products of coalmining went down by 69.4%, iron and steel by 20.2%, building and civil engeneering work andinstallation and building completion works (14.4. and 18.9%, respectively), products of mining 7 Hinterberger/Renn/Schütz (1998) show that looking at growth rates rather than absolute figures, a delinking of
material flows from GDP cannot be proven.8 With de Bruyn/Opschoor (1997, 258) we can differentiate between strong and weak dematerilization A falling
material intensity would in this sense represent weak dematerialization, while strong dematerialization means areduction of the absolute amount of TMR:9 Something similar happened some time later with ãcapitalÒ,which was theoretically attacked in the course of the Cambridge-Cambridge controversy in capital theory, whichquestioned the possibility to measure capital without determining income distribution, which is in turndepending on how we measure capital.
- 11 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
(excluding coal, petroleum, and gas) (46.6%) and foundry products (33.3%). What is of interest isthat the accountability of different sectors has important political implications, since knowing thecomposition of the overall material use means knowing where ecological economic policy canintervene with possibly best results (see Moll et al. 1998, pp. 31f.).
Wuppertal Institute UM-739e/98
Sectors with increasing TMR
non ferrous metals and non ferrous metal products plus 70.9%
production of road vehicles 24.0%
electric power, steam, hot water 49.7%
musical instruments, toys, sports equipment, decoration 47.1%
electrical machinery and equipment 28.7%
chemical products 19.9%
Sectors with decreasing TMR
coal and products of coal mining minus 69.4%
iron and steel 20.2%
building and civil engeneering work 14.4%
installation and building completion works 18.9%
products of mining (excluding coal, petroleum, and gas) 46.6%
foundry products 33.3%
Table 1: Industries with increasing/decreasing material flows, West-Germany 1980 Ð 1990
While the figures presented give important information, there are problems that are on a deeper layer
of social reality. From an evolutionary point of view, the question is rather about the feasibility of
different development paths than about the mathematical magnitude of certain relations. The question
is, whether a decrease in material throughput would harm the development conditions of socio-
economic systems. Many economists believe that market economies have an inherent ÒdriveÓ toward
growth (in monetary terms of GDP/capita), which is closely related to the innovative capacity and
other features that ensure socio-economic well being. The fear is that a non-growing economy would
sooner or later fall into a downward spiral of economic crises, and that the decline in material
production and/or monetary income could in the long run not be compensated by gains in well-being
per unit of income. Hence, even if the link between material wealth and individual well-being were
- 12 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
quite loose, a decline in material production and/or monetary income creation would trigger serious
losses in well-being. This, however, cannot be "proven" in a way that would be regarded as
scientifically satisfying. In particular, no empirical study about past development can give us secure
information about future developments. Social reality cannot be captured in a few formulas, no matter
how elaborate. The evolutionary perspective reminds us that while path dependency is definitely an
important feature of changes, "surprises" (for example technological innovations) will always play a
role and can lead to developments that cannot be predicted. The exploding importance of
international/global issues since the early seventies is but one example.
4 LABOUR AND MATERIAL FLOWS AS FACTORS OF PRODUCTION
The issue of employment is of course of particlar interest in this respect. It is often assumed that an
ecologically bounded economy will suffer from serious employment problems. But is this necessarily
so? In this sections, we present some theoretical and empirical considerations. Bleischwitz (1998)
discusses why in the traditional economic discourse, labour productivity is considered as a key issue
while ressource productivity (indicating the efficient or inefficient use of natural ressources) is
neglected by most economists. Obviously this has changed since the time of Classical economics
(Smith, Ricardo, Malthus and many others) whoconsidered land as an (somethimes the) important
factor of production. One reason seems to be rooted in the rise of empirical economics, where it was
not at all clear, how to measure ãlandÒ or the use of nature in a similarly comprehsnive manner as
ãlabourÒ and ãcapitalÒ9. The publication of data for the material throughput of national economies
(such as TMR) enables us to bring back ecological economics into the debates of macroeconomics,
which uses differnt factors of production and explains what happens if their relation changes by some
exogenous or endogenous developments. To develop a better understanding for these relationships,
the knowledge about (the importance of) material flows can be combined with conventional
macroeconomic reasoning. We still need a "macroeconomics of dematerialization", which would be
part of an environmental macroeconomics as envisioned by Daly (1991; 1996).
Material input (MI) can be viewed from two sides. On the one hand - as expressed earlier -
they represent a rough estimate for environmetnal externalities. On the other hand, they are a
fundamental basis of any economic activity (you cannot produce something from nothing). In this
view, MI can interpreted as a factor of production, the use of which should be reduced for ecological
reasons. This makes material inputs a bit different from other factors of production (labour and
capital). One attempt in this direction was made by Schuhmacher et al (1997), who include material
flows in an econometric KL(E)M production function, in which KL(E)M stands for capital, labour
(,energy) and materials; while other studies used refined mateials to operationalize ãmaterialsÒ, TMR
and especially DMI figures are more comparable with labour and capital in terms of a primary factor
of production. Since DMI excludes (imported and domestic) rucksacks, it can be interpreted as a very
- 13 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
general material input factor. The problem is that (relative) prices of resource extraction do not reflect
the ecological rucksacks, wich distorts the results of standard econometric modelling.10
As for employment, the number of jobs in Germany has increased (between 1960 and 1990)
by 8.53%. There is, as in all developed economies, a clear tendency for increasing labour
productivity. For example: the productivity of labour in Germany has increased by 3.78 per cent per
year between 1960 and 1990. As is well known, technical progress with a bias towards labour
productivity has so far lead to massive unemployment with parallel detrimental environmental effects.
What is obvious from the figures just presented that there appears to be no fixed relationship between
growth, use of environmental resources, and employment. What is more, there have so far be no
deliberate policies to induce dematerialization processes, but even so, there seems to be at least some
form of delinking. While this does by no means indicate a "Kuznets-relationship", it shows some
potential for delinking that has been utilized in the past. Technical progress, however, has so far been
biased towards labour saving and growth effects (induced by this increase in labour productivity)
have eaten up the modest increases in labour productivity. Hence, giving technical progress a new
direction, i.e. influencing innovations in a way that resources and not labour is saved, will be key for
sustainable development.
From the empirical data presented in the previous section, we can now derive the development
of factor productivities. Figure 3 shows that both DMI and TMR rise (although much less than labour
productivity), while material flows in absolute terms (figure 2) are not reduced.
0,5
1
1,5
2
2,5
3
time
TMR productivity
labour productivity
DMI productivity
capital productivity
1960 1994
index: 1960=1
1970 1980 1990
Source : WI Wuppertal Institute UM-742e / 98
Figure 3:Factor productivities in Germany (indices)
10 If we include energy, materials should exclude those material flows related to the use of energy (see Manstein
1996).
- 14 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
Another attempt was made by Wenke/Hinterberger (1998). This study shows that (over the period
from 1960 to 1990 in Germany, material flows (in terms of DMI) correlate stronger with GDP than
labour. It also reveals a clear contribution of (changes in) material inputs to economic growth, which
is considerably smaller than that of labour and capital, but nevertheless significant. Interestingly,
elasticities of production for material inpus are considerably higher in periods of recession than in
phasees of economic boom, while this relation is opposite for the other factors of production
(including energy).11
A first simulation of scenarios including data for material input and employment was made by
Meyer/Lutz (1998). One of the questions was, what would have happened if over the period from
1980 to 1990 no increase in the relative share of the service industry had occured. The study is based
on a dynamic input/output model and shows that the actual trend of economic development (with an
ongoing trend toward more services) has led to an increase of domestic production as well as imports,
it has reduced employment and increased material flows. 12
5 THE "FOURTH CORNER": THE INSTITUTIONAL SETTING
In the first chapter of this paper, we discussed competitiveness, employment and dematerialisation as
three "corners" of a magic triangle that are crucial both to understand the underlying processes as well
as their interrelations and to re-formulate sustainability as a normative imperative. Competetiveness,
employment and a healthy environment are highly interrelated issues in that achieving one goal always
has implications for the others. What is necessary, is therefore a policy that makes these goals
mutually compatible. Of crucial importance in this respect is the institutional environment in which
economic and political decisions are madeIn all three fields of consideration, external effects are
crucial. Faucheux et al. (1997, 131) emphasize that "a key factor for economic co-ordination
becomes the development of alliances of government (national andinternational institutions), the
private sector (trade and industryassociations), and people (consumer associations, NGOs of all
types) to promote a common vision of the world, along with new standards of conductgiving
legitimacy to certain orientations."
Kemp and Soete (1992) refer to both positive and negative externalities, which are related to
technical progress. But they "work" in different directions. While the benefits of technological
innovation widely diffuse, the economic risks are mostly borne by the limited group of innovators.
Negative environmental externalities, on the other hand, are mostly more diffuse than the direct
economic benefits to income earners from certain activities (see also Rennings/Hemmelskamp 1998,
p. 3). This fits to considerations by Meyer-Stamer (1998), who shows that while on the micro level,
innovations seem to appear at random, on the macro level, innovation is highly path dependent. This
11 Similar results can be obtained from looking at total factor productivities (Wenke/Hinterberger, 1998).12 Scharnagl, Spangenberg et al. (1998) have used similar data for a European simulation study by utilizing a
system dynamics modell (called ãSuEÒ).
- 15 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
means that macro-conditions, but also institutions, are the crucial variables for innovative capacity,
not only in a regional or national, but also in an international context. A German research project on
innovative effects of environmental policies defines environmental innovation as "measures by all
relevant agents (companies, politicians, lobbyists, churches, private households) that develop, use or
introduce new ideas and activities, products and production processes leading to reduce environmental
pressures or contributing to ecological sustainability (FIU 1997). This includes technical, social and
institutional innovations (Rennings/Hemmelskamp 1998). From this follows that innovations
contribute to all three aspects of sustainable development.
The effects of individual decisions on the labour market can be regarded as another externality,
which is again diffuse in relation to the individual decisions. In turn, it is not only the individual
decison on participation in the labour market (but the whole framework from social security to the
general approach to employment, work and private activities).
If effects are diffuse, they cannot be reduced or increased by simple mechanisms. It is rather
the instituional setting which is important for (changes in) these processes. Therefore the institutional
setting behind economic and social processes is decisive and can be formulated as a "fourth corner" to
our triangle. Since it makes up another dimension, we should rather speak of pyramid than a flat
figure with four corners (see figure 4).
Quelle: F. Hinterberger,1998 Wuppertal Institut UM – 203e-2/98
The institutional settingnetworks and guiding principles
Figure 4: The institutional setting: a pyramid of sustainable development
"Insitutions" should be understood in a broad sense, i.e. not only as formal institutions, such as
political organisations or legal frameworks, but also comprising "informal" facts such as preferences,
behavioural patterns and habits. Socio-economic changes require changes in insititutions. Any market
- 16 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
activity is embedded in an insitutional frame, which co-determines its outcome. Therefore it is not
only the price-relations that need to change in order to achieve more ecologically (and socially)
oriented market decisions. Societies have and need guiding principles so that individual agents can
relate their behavior to each other. These, in turn, are rooted in a society's system of (permanent)
education, its culture (is it innovative and attracted by fashions, for example) and the organisation of
its communication (existence of networks, the role of non-profit organisations etc.).
In other words, the meso and meta levels of a structured society are equally important as the
the micro and macro conditions. This is an interesting parallel to Esser et al (1996), who show that
similar processes and mechanisms are relevant for determinig the an economyÕs competitiveness (and
terhefore also the potential for job creation): education, culture, the functioning of networks and the
existence of shared beliefs (for or against world market orientation) are as crucial for a societyÕs
success on the world markets as (relative) costs and innovation capacities (see next section).
On the other hand, while the institutional setting is important, price relations do affect market
decisions and therefore ecological "guard-rails" are necessary to avoid external effects and to keep
socio-economic developments away from degrading the bio-physical basis of our existence. We will
come back later to the concrete measures that can be taken in order to implement such guard rails in
form of eco-taxes or tradable permits. From an institutional perspective, it is important to stress,
however, that these measures are difficult to employ if formal and informal insititutions - the legal
framework as well as the societal beliefs - contradict such a policy. In other words, guard-rails
("Leitplanken") and guiding principles ("Leitbilder") re-inforce each other, and any policy to change
the development must take this interrelation into account in order to be effective.
A similar view is expressed, for example, by the UN Comission on Sustainable Development
when it proposes four levels of indicators: economic, social, ecological and institutional. But the
concrete formulation of indicators for a country's institutional setting is very difficult. In the context
of this paper, dematerialization is more than a technical effort and a quantitative measure of ecological
progress: if a substantial reduction of material flows is to be achieved, it must be translated into
ecological guard-rails and guiding principles.We will show in the last chapter of this paper that it is
possible and advantagous (compared to more traditional environmental policies) to link these with
policies for social integration and competitiveness. In any event, the path dependency of
socioeconomic development has to be taken into account. One important issue of the current paths of
most economies is the stong influence they experience form the world-wide trend toward
globalisation, which brings us to our next topic.
6 SUSTAINABILITY IN A GLOBALIZED ECONOMY:AN INTERNATIONAL PERSPECTIVE
Just as "sustainable development" has dominated the political and scientific discourse of the 1980s
and early 1990s, "globalization" has become the buzzword of the late 1990s. While the first,
- 17 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
however, is a normative concept expressing a desired development, the latter is mainly expressed as a
fact that influences many other developments and especially the scope for national economic, social
and environmental policies. This is not the place to assess the globalization thesis or to investigate the
definitions, causes or implications of globalizing processes. What is beyond doubt is that the
international scenery has changed since the 1970s and especially during the last decade. Economic,
social, cultural as well as ecological problems all have a "global dimension", in that developments at
one place tend to have implications for other places.13 This is also emphasized in one of the most-
quoted definitions of globalization which has been formulated by the British sociologist Anthony
Giddens (1990, 64), who defines globalization as "the intensification of worldwide social relations
which link distant localities in such a way that local happenings are shaped by events occuring many
miles away and vice versa."
To what extent competetiveness is affected by globalizing processes, is one of the hotly
debated issues in this arena. Some authors (such as Altvater/Mahnkopf 1996) suggest that the nation
state becomes powerless and that political decisions in general can have only little impact in a world
that is dominated by an ever expanding global capitalism. On the other hand, books like Globalization
in Question (Hirst/Thompson 1996) ask whether the "strong globalization thesis" is valid in the first
place and whether globalization is just a "necessary myth" (Hirst/Thompson 1996, Ch. 1). They
suggest that while we are clearly moving towards an inter-national economy, a globalized economy,
in which single nations have no power and where truly trans-national corporations are the most
important global player, is not in sight. Several authors point to the fact that in pure quantitative terms,
the world was at least as "globalized" in the period from 1870 to 1914 as it is today. Few, however,
would argue that there are no qualitative differences between that period and the late twentieth
century. While scope and intensity of globalizing/internationalizing processes are still contested, we
can be sure that there are changes on a global scale that affect economic, social and ecological
developments.
Also on this level, we can oberserve structural and scale effects. Obviously, what is termed
globalization can be seen as a gigantic structural change with many effects, among them scale effects
with respect to economic activities as well as ecologically relevant flows. Indeed, many authors (in
particular those in the tradition of the French regulation school) see the change from fordism to
postfordism as a central cause for the change in the international scenery (see, for example, Hein
1994, 1995, 1997; Lipietz 1997). That this structural change has many Ð and very different Ð effects
on the labour market situation in both industrialized and developing countries is well known.
What should be emphasized is that "cutthroat competion" between nation states in order to
attract investment flows cannot be sustainable in a socio-economic sense, just as the current "models"
13 Faucheux et al. (1997) differentiate economic and ecological globalization: They define economic globalization
as "the manifestation on a worldwide scale of the social values and requirements of business competition. (...)Ecological globalization, by contrast, manifests itself in environmental matters such as free-market issues inthe context of the WTO (...); international agreements on the ozone layer, acid precipitation, greenhouse gases,etc; ownership claims to the products of bioengineering; and the transport and disposal of hazardous wastes"(their emphasis).
- 18 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
of development in the rich countries cannot be sustainable on a global scale. If competitiveness is just
seen in the reduction of (relative) costs, this could lead to a beggar-my-neighbour policy, not taking
into account the economic and social needs and necessities of many people in all countries. High
unemployment poses not only social problems, but also reduces effective demand and therefore the
potential for further development in all parts of the world. Also for these reasons, the broader view of
(systemic) competitiveness as presented in the ealier sections, is more appropriate especially from a
globalization point of view.
Last but not least, the material consequences of these developments must be taken into acount.
This brings us back to our approach to ecological problems: Today, the material consumption in the
industrialized parts of the world has reached a level (50 - 80 tons of TMR per capita per year), which
can be buffered by global eco-systems only because the majoritiy of the global population still far
below these figures.14 In other words, even if we cannot determine, where the ecological limits to
global economic growth are: the environmental space (Opschoor 1995) is limited. While the
environmental space concept is an operationalization of the general call for sustainable development
as formulated in the Brundtland-Report, our material input approach is developed to make this
concept more concrete: to make sustainability accountable.
We have emphasized above that the goals of competetiveness, employment and scale reduction
can be derived from the more general goals of economic, social and ecologial sustainability. We have
also argued that the compatibility of these goals is the central problem. This implies that on a scientific
level, these goals have to be taken into account simultanuously. As an empirical evidence for the
current situation, Dahme et al. (1998) present one possible suggestion to link TMR data as an
environmental component with indicators of socio-economic developments. Their example is the
Human Development Index (HDI) as published by the United Nations Development Programme (see
table 2. Empirical data for such an ãSustainable Human Development IndexÒ (SHDI) for four
Country HDI Rank1 HDI TMI TMI Index SHDI SHDI Rank
USA 1 (4) 0,942 84 0,06 0,721 4
Netherlands 2 (6) 0,940 67 0,25 0,768 2
Japan 3 (7) 0,940 45,2 0,50 0,831 1
Germany 4 (19) 0,924 76 0,15 0,730 3
Table 2: Example for a Sustainable Human Development Index (SHDI) 1 In brackets are the actual HDI rankings,
countries (USA, Japan, Germany and the Netherlands) show a re-ranking of SHDI as compare with
HDI for 1994. As a result, the SHDI values of all countries investigated would fall compared to the 14 Just to give an example. Helmut Sch�tz from the Wuppertal Institute estimates, for example, a TMR per capita
of 2 - 5 tons per year for Viet Nam.
- 19 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
original HDI values, and the US would drop considerably behind other countries because of its higher
ecological impact as measured in material flows). For Viet Nam, with an estimated TMR per capita of
2 (HDI value: .557, rank: 121) the SHDI would increase to .667, that is, much closer to industrialized
countries.
What must be taken into account, of course, is the fact that countries like Viet Nam (just to give an
example) strive to become industrialized. As a consequence, the TMR of the less industrialized
countries will definitely increase in the future, which will most likely lead to an unsustainable
development on a global scale. This is exactly the rationale for the call for a dramatic reduction of
material throughput (dematerialization) in the rich (OECD) countries, in order to allow for more
environmental space for catching up (in material input terms) in other parts of the world: In the end, a
substantial reduction of global material flows can only be achieved in the course of technological,
structural and institutional changes in all parts of the world
From this follows that the world-wide matter-energy-throughput, must be a maintarget of an
ecologial economic policy in a world that is characterized by global financial and trade flows. Just as
the economic transactions link different regions and nations closer together, so the material flows
around the globe link these enteties in an ecological sense. The figures presented here show that there
are means to conceptualize and influence the material inputs of economies. They further indicate that
there is very likely a huge potential for a scale reduction that does not automatically lead to both
economic disasters and mass unemployment. It must become a primary target of regional, national
and last but not at all least "global" policies to use this potential. Even though some aspects of
globalization were accelerated by political decisions, the different globalization processes cannot
simply be stopped or even turned back. In a sense, the policy-relevant question then might be not
whether certain processes are "good" or "bad" but what kind of globalization is sustainable (see
Sachs et al 1998)? How a global governance of material flows would look like is not at all certain
today. What is certain, however, that we need political action and not just the hope that the economy
will take care of itself Ð this is, as mentioned above, also evident from the debate over the EKC.
From this, some further research questions can be formulated:
· When a global economic structural change is taking place anyway, what are the ways in which this
change can be influenced in a sustainable direction? In other words: How can global governance be
put into place and how can it be made work effectively (see, for example, Messner/Nuscheler
1996). Especially, what kind of ecological regulations that reduce the scale are needed in a world
that has so far been dominated by (successful) attempts to deregulate trade flows, thereby
increasing competition?
· In what manner would it be helpful for the ecological economic analysis of globalization to reach
out to other social scientific paradigms (such as the regulation school) in order to combine
ecological insights with elaborated research efforts in the context of globalization (see Luks 1999)?
- 20 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
· When material flows are of such central importance, how can this dimension be incorporated into
attempts to model global economic and environmental scenarios? One requirement for this would
be a more detailed empirical picture of global material flowsThese could be fed into economtric
world models (see, for example, Meyer/Uno 1998) in order to achive results similar to those of the
IPCC process and to discuss the material implications of different national and international
policies on a better informed basis.
On the other hand, national (or regional, such as European) policy-making cannot wait until
these questions (or rather fields of reseach) have found scientifically sufficient answers. In the
following, we claim (again) that there is some scope for a national (and European) ãecological
economic policyÒ that aims at the targets of competitiveness, employment and dematerialization in an
integrated manner.
7 TOWARD AN INTEGRATED POLICY:AN ECOLOGICAL ECONOMIC POLICY
The preceeding sections have shown that in a globalized world, competetiveness, job creation and
dematerialization policies are all mutually dependent and interrelated. This poses not only analytical
difficulties but creates a need for an integrated policy, i.e. a political approach that does not separate
economic, social and environmental policy but sees these realms as a whole area of interdependent
sections.15 Economic policy must be environmental policy just as environmental policy must be
economic policy. What is needed is an ãecological economic policyÒ (Hinterberger et al. 1996). Such
an integrated policy must try to formulate the goals of competetiveness, employment and
dematerialization in a way that they arelargely compatible with each other. It also follows from the
analysis above that such a policy needs to aim at four levels: enterprises and consumers (micro level),
institutions and networks (meso), the socio-economic conditions at the macro level such as fiscal,
monetary and distributional conditions. To achieve this, society need at least some minimal consensus
with respect to the objective of sustainable development, interpreted as the combination of
competiveness, social and ecologial goals Ð what we can describe as the meta-level (see also
Hinterberger/Luukkanen/Messner 1997). The learning ability of societies is of crucial importance in
this respect: The achievement of sustainable development will be the result of complex and dynamic
interactions between businesses, the state and intermediary institutions on the different levels.
Development in market economies is the outcome of innovations, and in the context of sustainable
development, understood as the achievement of competetiveness, employment and a sound use of
environmental resources, excellerating innovations and at the same giving them a new Ð a sustainable
Ð direction becomes a central task for policy makers (see also Weizs�cker et al. 1995). Playing off
certain goals against other goals Ð e.g. employment against ecological sustainability Ð is not only not
helpful: it is wrong, considering the mutual dependence of the goals analyzed in this paper. 15 This is also one of the major goals of the European Union as stated in the Amsterdam treaty of 1997.
- 21 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
This requires, that all three policies be not too detailed in order to keep possible interference
small. Rather is it important that political (governmental and non-governmental) agents set
appropriate (and strong) boundary conditions. A solution can be seen in the formulation and
implementation of rough but bold physical limits in terms of material flows (including energy flows)
and land use.16 If these limits are implemented, allocation could be left with the price mechanisms in a
market economy.17 There is a broad range of instruments possible in order to implement the physical
limits of economic activities (see Hinterberger/Luks/Stewen 1996, ch 10 and
Hintgerberger/Welfens/Rave 1998). They range from voluntary agreements over public provision of
information to the use of taxes as well as substances and the introduction of tradable permits on
material flows.18
Even if there would be a common sense about the guideline "dematerialization", every
entrepreneur and every consumer needs information as to how he /she can act according to the guiding
principles. Governments can give this information directly or can indirectly support environmental
education and the further education of children and adults. A way to give minimal information and
induce consumers to buy products with low material intensity, could be the MI figures printed on a
product, which focus on the total material and energy -consumption in the product-life-cycle rather
than ecological details. From this follows the need for a uniform and controllable standard of
calculation to secure comparability of products. This would also allow for ecologically and
economically efficient systems of resource-management within companies. In combination with the
traditional cost-accounting, such an accounting scheme would reflect both inerternal and external
(ecological) costsby considering the induced ecological rucksacks. In this context it is decisive that the
information systems in the company as well as the national level will connect economic as well as
ecological data concerning material intensity (Liedtke 1998). It can show what companies could do
and how these actions could be brought together on the level of the national statistics (the linking of
GDP and MI data).
In the institutional view developed above, it is important, that economic agents relate their
activities to each other. Providing information is a necessary but certainly not sufficient condition for
this. Companies and/or their associations could commit themselves to achieve binding environmental
goals, which contribute to the higher goal of dematerialization. The advantage to rules or prohibitions
by the state is the preservation of a relatively large entrepreneurial freedom, while the danger is that
without further state activities, incentives to reduce throghput are too small. Here it is also useful to to
increase the degree of integration of the citizens in the process of an ecological and competitive
16 Additionally, some more detailed measures have to be taken to control hazardous substances, but the more
material flows are reduced the more hazardous substances should be avoided also.17 It is certainly a good claim to "get the prices right" but the question remains what are the right prices. This
depends crucially on the definition of limits below which certain material flows (inputs and/or outputs) shouldbe reduced
18 For the reduction of hazardous flows some regulation will still be necessary but to reduce the overall sum ofbulk material flows economic instruments are much more suitable
- 22 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
technological development. This way social interests are connected with those of the individual
companies.
Beside these soft measures and instruments, which donÕt always turn out to be efficient,
financial incentives are necessary supporting companies on their way to achieve sustainability and
dematerialization. Subsidies often have a harmful effect on the environment and create social costs.
Nevertheless fixed term subsidies can play an important role in setting an ecological structural change
and redirect resources in an ecologically productive manner. The affore mentioned methodology of
material flow accounting could be used as a general criterion for an ecological reduction and
reorganisation of subsidies. Energy and material taxation is not tied to emissions or waste but
concentrates on the materials entering the economic process. Both tax bases (energy and material
input) provide an estimate for the environmental stress potential. A fundamental difference between
material and energy taxes is the fact that the amount of substances, which have to be taken into
account as material input in case of material input taxation, is much larger than the number of energy
sources. So an energy tax could be administrated in an easier way. When introducing a energy taxes it
is necessary to think about the reduction of those material flows which will not be affected by an
energy tax in a sufficient extent. The introduction of tradable permits of material flows would allow
firms to displace a certain quantity of primary material in exchange of a monetary payment. A national
or international authority could determine the permissible extraction quantity as an ecological guard
rail and issue certificates accordingly, while setting prices for resource use would be left up to the
markets.
There is no Óone and onlyÓ instrument to achieve the goal of dematerialization. A policy of
dematerialization cannot ignore the instruments put in place so far, but should be combined with the
instruments mentioned above. It is important to coordinate the different instruments in order to create
incentives to reduce all material flows by keeping at the same time the intensity of intervention in
economical decisions on a low level. There is the chance that dematerialization - in comparison to the
current environmental laws - provides a useful tool for deregulation of economic as well as
environmental policy. A dematerialization through deregulation (compared with today's environmental
policy) could therefore trigger innovation and create employment. In environmental terms this would
lead to an avoidance of detrimental effects to global eco-systems and so lead to an internalisation of
external effects through the backdoor. Such a policy can certainly not be prescribed. If ecological
economists want to shape policy in a certain direction economists should become part of this process.
This involves of course also the question of which economic approach is employed. The above
considerations rely on the assumption that both ecological and economic systems are complex
dynamic systems and that the goal of sustainability means that the conditions of development of these
systems should be secured rather than trying to achieve a prespecified equilibrium. Empirical research
can be helpful in guiding such decisions, in particular with respect to the interaction between meso-
and macro-level. Structural changes (meso level) and growth effects (macro level) are crucial for the
ecological effects of economic activities Ð and, of course, both levels are also crucial for the
- 23 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
employment effects of dematerialization policies. Further empirical as well as theoretical research to
analyze dematerialization potentials and job effects can therefore help determining where policy might
be most effective.
AcknowledgementsThis paper presents results of reseach efforts at the Wuppertal Institute as well as those of a Europeanreseach network ("CompETE"; For more information, please refer to our web-site"http://www.wupperinst.org/Projekte/compete/compete.html"). We thank Kai Dahme, Christian Kopfand Maria J. Welfens for helpful comments. All usual disclaimers apply.
ReferencesAdriaanse, Albert / Bringezu, Stefan / Hammond, Allen / Moriguchi, Yuichi / Rodenburg, Eric /
Rogich, Donald / Sch�tz, Helmut (1997): Resource Flows: The Material Basis of IndustrialEconomies. Washington, D.C.: World Resources Institute.
Altvater, Elmar / Mahnkopf, Birgit (1996): Grenzen der Globalisierung. �konomie, �kologieund Politik in der Weltgesellschaft. M�nster: Westf�lisches Dampfboot.
Ayres, Robert U. (1994): Industrial metabolism: Theory and Policy. In: Ayres, Robert U. /Simonis, Udo Ernst (Eds.): Industrial metabolism: Restructuring for sustainable development.Tokyo/New York/Paris: United Nations University Press. 3 - 20.
Bringezu, Stefan (1997): Material Flow Indicators. In: Moldan, B. / Matravers, R. (Eds.):Sustainability Indicators. Report of the Project on Indicators of Sustainability. Series: SCOPE, No. 58:170-180.
de Bruyn, S.M. / Opschoor, J.B. (1997): Developments in the throughput-income relationship:theoretical and empirical obervations. In: Ecological Economics 20. 255 - 268.
Dahme, Kai / Hinterberger, Friedrich / Sch�tz, Helmut / Seifert, Eberhard K. (1998):Sustainable Human Development Index: A suggestion for "greening" the UN's indicator. Submittedto the International Journal of Environmental Pollution.
Daly, Herman E. (1991): Elements of Environmental Macroeconomics. In: Costanza, Robert:Ecological Economics. The Science and Management of Sustainability. New York/Oxford: ColumbiaUniversity Press. 32 - 46.
Daly, Herman E. (1996): Beyond Growth. The Economics of Sustainable Development. Boston:Beacon Press.
Esser, K. /Hillebrand, W. / Messner, D. / Meyer-Stamer, J. (1996): Systemic Competitiveness.New Governance Patterns for Industrial Development. London: Frank Cass.
Faucheux, Sylvie / O'Connor, Martin / Nicola�, Isabelle (1997): Economic Globalisation,competetiveness, and environment. In: OECD (Ed.): Globalisation and Environment. PreliminaryPerspectives. Paris: OECD. 101 - 139.
Femia, Aldo / Hinterberger, Friedrich / Luks, Fred (1998): Ecological Sustainability, EconomicGrowth, Individual Well-Being ... and Dematerialization. Mimeo.
FIU - Forschungsverbund innovative Wirkungen umweltpolitischer Instrumente (1997):Rundbrief September 1997. RWI Essen.
Giddens, Anthony (1990): The Consequences of Modernity. Stanford (Cal.): StanfordUniversity Press.
- 24 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
Hein, Wolfgang (1994): Ungleichzeitige Entwicklung(en): Weltgesellschaftlicher Umbruchund die Schwierigkeiten auf dem Wege zu einer neuen Weltordnung. In: Ders. (Hrsg.): Umbruch inder Weltgesellschaft, Hamburg: Deutsches �bersee-Institut. 3 - 44
Hein, Wolfgang (1995): Von der fordistischen zur post-fordistischen Weltwirtschaft. In:Peripherie 59/60. 45 - 78.
Hein, Wolfgang (1997): Weltgesellschaftlicher Wandel und nachhaltige Entwicklung Ð dieZukunft als Fortsetzung der Geschichte. In: Nord-S�d aktuell, XI (2). 327 - 349.
Hinterberger, Friedrich / Luks, Fred / Stewen, Marcus (1996): �kologische Wirtschaftspolitik.Zwischen �kodiktatur und Umweltkatastrophe. Berlin et al: Birkh�user.
Hinterberger, Friedrich / Luukkanen, Jyrki / Messner, Dirk / Spangenberg, Joachim /Althaler, Karl / Calafati, Antonio / Martinez-Alier, Juan / M�rle, Holger (1998): CompETE. A newresearch agenda. Wuppertal/Berlin: CompETE Working Paper No. 1. (seehttp://www.wupperinst.org/Seiten/Projekte/compete)
Hinterberger, Friedrich / Moll, Stephan / Femia, Femia (1998): Arbeitsproduktivit�t,Ressourcenproduktivit�t und Ressourcenintensit�t der Arbeit. Graue Reihe des Instituts Arbeit undTechnik 1998.
Hinterberger, Friedrich / M�ndl, Andreas (1998): Das Ziel der Nachhaltigkeit imSpannungsfeld von Wirtschafts- und Umweltpolitik. Wuppertal/Wien: �IN/WI Policy Paper No. 2.
Hinterberger, Friedrich / Renn, Sandra / Sch�tz, Helmut (1998): Arbeit, Wirtschaft, Umwelt:Einige Indikatoren sozialer, wirtschaftlicher und �kologischer Entwicklung im Zeitablauf. Draft for aWuppertal Paper.
Hinterberger, Friedrich / Welfens, Maria / Bannasch, Daniel / Rave, Tilmann (1998): Input-oriented Environmental Policy: new market-based incentives for sustainable development. ESEENewsletter No. 6. 2-3.
Hinterberger , Friedrich / Fr�hlich, Michael / Rosinski, Niki et al. (1999). QualitativeAspekte im MIPS-Konzept. Manuscript: forthcoming.
Hirst, Paul / Thompson, Graham (1996): Globalization in Question. The internationaleconomy and the possibilities of government. Cambridge: Polity Press.
Jacobs, Michael (1994): Green Jobs? The Employment Implications of EnvironmentalPolicy. A report for WWF. Brussels.
Kemp, Ren� / Soete, Luc (1992): The Greening of Technological Progress. An evolutionaryperspective. Futures. 437 - 457.
Klingert, Sonja, et al. (1998): Schafft Umweltschutz Besch�ftigung? Hans-B�ckler-Stiftung,Manuskripte 253.
Liedtke, Ch. / Rohn, H. / Kuhndt, M. / Nickel, R. (1998): Applying material FlowAccounting: Ecoauditing and Resource Management at the Cambium Furniture Workshop. Journalof Industrial Ecology. Forthcoming in Vol. 2 (3).
Liedtke, Ch. / Kuhndt, M. (1998): ComPASs - CompaniesÕ and SectorsÕ Path to SustainableDevelopment. Paper presented at the UNEP Workshop ãWhat is a Sustainable Enterprise?Ò Paris.
Liepietz, Alain (1997): Developments and Alternatives: Hopes for Post-Fordism. In:Tylecote, Andrew / van der Straaten, Jan (Ed.): Environment, Technology and Economic Growth.The Challenge to Sustainable Development. Cheltenham/Northampton: Edward Elgar. 206 - 225.
Luks, Fred (1998a): Der Steady-State als Grundlage eines Sustainable Development.Doctoral thesis, Hamburg.
Luks, Fred (1998b): Throughput, Scale, Material Input. In: K�hn, J�rg / Gowdy, John /Hinterberger, Friedrich / van der Straaten, Jan (Hrsg.): Sustainability in Question: The Search for aConceptual Framework. Aldershot: Edward Elgar (Forthcoming)
- 25 -
Hinterberger/Luks: Dematerialisation, employment and competitiveness ISEE Plenary Paper
Luks, Fred (1999): Importing and Exporting Sustainable Development. Some Thoughts onthe Ecological Economics of International Trade. Paper in Preparation.
Malaska, Pentti (1998): Sustainable Development Analysis. Mimeo.Manstein, Christopher (1996): Das Elekrizit�tsmodul im MIPS-Konzept. Wuppertal:
Wuppertal Papers No. 51.Messner, Dirk (1997): The Network Society. Economic Development and International
Competitiveness as Problems of Social Governance. London: Frank Cass.Messner, Dirk / Nuscheler, Franz (1996): Global Governance. Herausforderungen an die
deutsche Politik an der Schwelle zum 21. Jahrhundert. Bonn: Stiftung Entwicklung und Frieden,Policy Paper 2.
Meyer, Bernd / Lutz, Christian (1998): �koeffiziente Dienstleistungen undMaterialverbrauch. Eine Simulationsstudie mit dem disaggregierten Modell PANTA RHEI. Mimeo.
Meyer-Stamer, J�rg (1998): Jenseits traditioneller Industrie-, Standort- undInnovationspolitik. Pr�sentation vor dem Arbeitskreis Internationale Wirtschaft. Friedrich-Ebert-Stiftung. Bonn.
Moll, Stephan / Bringezu, Stefan / Femia, Aldo / Hinterberger, Friedrich (1998): Ein Input-Output-Ansatz zur Analyse des totalen Ressourcenverbrauchs einer National�konomie. Ein Beitragzur Methodik der volkswirtschaftlichen Materialintensit�tsanalyse. Beitrag zum 6. StuttgarterInput-Output Workshop. Mimeo.
Neumayer, Eric (1998): Is Economic Growth the Environment's Best Friend? In: Zeitschriftf�r Umweltpolitik und Umweltrecht 2/98. 161 - 176.
Opschoor, J. (Hans) B. (1995): Ecospace and the fall and rise of througput intensity. In:Ecological Economics 15 (2), November. S. 137 - 140.
Rennings, Klaus and Jens Hemmelskamp (1998): Nachhaltigkeit und Innovation.Sch�pferische Zerst�rung ohne Zerst�rung der Sch�pfung. Beitrag zum ZEW-Symposium"Theoretische und empirische Wirtschaftspolitik". Mannheim.
Rothman, Dale S. / de Bruyn, Sander M. (1998): Probing into the environmental Kuznetscurve hypothesis. In: Ecological Economics 25. 143 - 145.
Sachs, Wolfgang et al. (1998): Globalisierung und Nachhaltigkeit. Welche Formen derGlobalisierung sind zukunftsf�hig? Mimeo.
Schmidt-Bleek, Friedrich (1994): Wieviel Umwelt braucht der Mensch? mips - Das Ma§ f�r�kologisches Wirtschaften. Berlin et al.: Birkh�user Verlag.
Schmidt-Bleek, Friedrich et al. (1998): MAIA. Einf�hrung in die Materialintensit�tsanalyse.Berlin et al: Birkh�user Verlag.
Spangenberg, Joachim (1998): Investing in Sustainability. Paper presented at the EuroSASEConference on European Advances for Socio-Economics. Vienna, July 1998.
Spangenberg, Joachim / Bonniot, Odile (1998): Sustainability Indicators Ð A Compass on theRoad Towards Sustainability. Wuppertal: Wuppertal Paper 81.
Weizs�cker, Ernst Ulrich von / Lovins, Amory B. / Lovins, Hunter L. (1995): Factor Four.London: Earthscan.
Wenke, Martin / Hinterberger, Friedrich (1998): Materialeinsatz, Faktorproduktivit�t undgesamtwirtschaftliche Produktionsentwicklung. M�nchengladbach/Wuppertal: Mimeo.
Zweim�ller, Josef (1998): Wachstum und Besch�ftigung. Wuppertal/Berlin: CompETEWorking Paper No. 4 (http://www.wupperinst.org/Projekte/compete/compete.html).