Peak Stuff?

Could it be true that resource use is reduced by economic growth?

By George Monbiot, published on the Guardian website, 3rd November 2011

I won’t deny it: my first reaction on seeing the results of Chris Goodall’s research into our use of resources was “I don’t want this to be true.” Obviously, I’d like to see our environmental impacts reduced, as swiftly and painlessly as possible. But if his hypothesis is right – that economic growth has been accompanied by a reduction in our consumption of stuff and might even have driven it – this would put me in the wrong. I’m among those who have argued that a decline in our use of resources requires less economic activity, or at least a transition to a steady-state economy.

Just 10 weeks ago, I wrote the following in the Guardian:

“the current economic system [cannot] address the environmental crisis. Its advocates promised that economic growth and environmental damage could be decoupled: better technology and efficiency would allow us to use fewer resources even while increasing economic output. Nothing remotely like it has happened. In some cases there has been a decline in resource intensity, which means a lower use of materials per dollar of economic output but higher overall consumption. In some cases – such as iron ore, bauxite and cement – even this hasn’t happened: resource use per dollar has risen.”

That was what the available research suggested at the time. But if Goodall’s findings are correct they put a coach and horses through something I strongly believed to be true.

So, for a few minutes, I engaged in what psychologists call protective cognition. I started scouring his findings for reasons to reject them. It took an effort of will to shake myself out of it and remember that the intellectually honest response to new information is to adjust our beliefs to the evidence, rather than adjust the evidence to our beliefs. We must question and test new findings of course, but we must do so as dispassionately as possible. Otherwise we are in danger of doing more harm than good, and of wasting our lives promoting the wrong causes. Anti-vaccine campaigners please take note.

Starting again, this time reading it as objectively as I could, I saw that Goodall’s report appears to be rigorous and unbiased. It answered many of the questions and objections I raised as I read it. People like me have to step back and consider the possibility that Chris Goodall could be right when he states that:

“absolute decoupling of resource use from economic growth may possibly have occurred. … GDP growth, because it brings technological progress which is correlated with more efficient use of resources, may help reduce environmental damage.”

But a good deal of further research is needed before we can conclude that causation as well as correlation is at work here, let alone draw universal conclusions from his findings. Here are some of the questions and issues which occur to me, whose resolution should now be an urgent research priority:

1. If GDP growth helps to reduce the use of resources, should we not expect recession to increase it? I see no evidence of this in the figures, either during the recent recession or during the recessions of the early 1980s and early 1990s. Quite the opposite in fact: resource use seems to decline more steeply during these periods. This looks like a good test of the hypothesis. Might it suggest that the driver is something other than economic growth?

2. The length of declining resource use during periods of economic growth is in some cases very short. If, as Duncan Clark proposes, we disregard the blip in 2001, the key overall indicator (Total Material Requirement) peaked in 2005, which means that there were just 3 years of decline before the recession began. To show that this is a sustained and meaningful trend we’ll need a longer time series (the same goes for issue 1). We should keep monitoring all the resource flow figures Chris Goodall examines.

3. A change over such a short period, and, in some of the cases Chris Goodall investigates (including the headline figures), of just 3 or 4 percentage points, could arise from a short-term fluctuation caused by something other than economic growth. For example, between 2005 and 2008, new housing starts in the UK spectacularly collapsed, from 234,000 to 111,000. A change of this magnitude is bound to have some influence.

4. Why is there a sharp disparity between resource use – including primary energy production – and greenhouse gas emissions? While primary energy production peaked in 2001, the UK’s greenhouse gas emissions rose across the uninterrupted growth years of the last decade (2000-2006). And that’s without taking into account the offshored emissions (those produced by other countries while manufacturing the goods we consume). Offshored emissions appear to negate all the cuts the UK has made since 1990, which were largely an artefact of switching from coal to gas and the decline of manufacturing industry.

This is a bigger potential problem for Chris Goodall’s hypothesis than it first appears, for two reasons:

a. most greenhouse gas emissions arise from primary energy consumption

b. offshored emissions reflect the stuff whose manufacture we commission abroad

If greenhouse gas emissions and the UK’s material flow accounts are seriously out of whack, it suggests that one set of figures is likely to be wrong.

5. An important question which, to his credit, Goodall himself raises, is that of inequality. It has been rising in the UK through both growth and recession. Inequality has an important impact on resource use. As the income of the rich rises they tend to invest much of their new money. As the income of the poor rises, their spending – and therefore resource consumption – tends to rise accordingly. It would be useful to run the resource use figures against a graph of rising inequality. This could offer an alternative explanation for some of the shifts Chris Goodall observes.

6. How does the British experience compare to that of other rich nations, especially those which have not suffered such sharp increases in inequality?

7. Could declining resource use in fact be the result of effective environmental campaigning? That is what many of us would like to believe, so we should treat it with particular caution. It would also be hard to measure. But those who wish to use Chris Goodall’s analysis as a stick with which to beat the greens should hesitate: the figures might reflect our success, rather than expose our wrong-headedness.

None of this is to dismiss his hypothesis. But it does suggest that other explanations might be valid. In any case, we should celebrate the fact that our use of resources appears to be declining, while remaining open to whatever the most plausible explanation for that decline may be.