Environmental writer and analyst Chris Goodall discovered something rather intriguing recently – that the amount of stuff Britain uses peaked in around 2001-2003 and has gone into decline. Shortly after the millennium, we started using fewer material resources to run the economy – oil, water, paper, fertiliser, cement – you name it, chances are we’re getting through less of it now than we were ten years ago.
We know this because buried deep in the vast mass of figures churned out by the Office of National Statistics every year are the Material Flow Accounts. I’d never heard of them and heaven knows how they work them out, but these are essentially an attempt to put a single figure to the entire weight of material inputs to the economy. Here’s what they show:
The top line above shows the total amount of resources Britain requires, including all the materials used in other countries to make things that we import. Below that the red line shows all the stuff actually used in the UK, including imported materials, and the yellow line is the stuff that is extracted in the UK. Those materials are divided into three categories: biomass (wood, food, textiles), minerals (metals, clay, sand, stone) and fossil fuels (oil, gas, coal). You can explore the details in Goodall’s paper here.
What we see is a fairly steady increase in the amount of materials used to run the British economy, up until the last decade, where it begins to slowly drop away, and then there’s a sharper decline brought on by the recession.
This is interesting, says Goodall, because the economy more or less doubled in size in the last decade without the need for additional material inputs. He suggests that this shows that ‘decoupling’ is possible: economic growth can be ‘decoupled’ from material resources and physical limits to growth can be transcended. He even goes so far as to say that “the economic growth in the UK over the last generation has not resulted in any increase whatsoever in direct environmental pressure.”
If we’re using less stuff and reducing our impact on the earth, this is good news. The steady state economy, of which I’m an advocate, is all about zero growth in material inputs – not zero growth per se, a common misunderstanding and one that Goodall appears to make here too.
If we’re using less stuff and still growing the economy, then that’s fine by me, but I’m not sure about the extrapolation that the economy can therefore be decoupled from material resources. There are more factors at work than the ‘maturing’ of the economy. For one, the reason that the economy doubled without additional material inputs is that the last decade of growth was mainly speculative. This was growth driven by the City and a runaway property market, and we’re now seeing it for what it is: a debt bubble.
If Britain had experienced the kind of growth that the government is now trying to stimulate, that of industry, exports, and infrastructure, then the chances are that we’d have seen more materials used. From a pro-growth point of view, the de-coupling of the last decade may not have been a good thing, as it represents a more ephemeral form of economic activity.
Second, many of the declines in material use that we’re seeing aren’t voluntary. The reduction in oil use is driven in large part by the oil price. Use of gas, metals, and phosphorus are all in decline, and all of them have seen steep price increases. So maybe the materials consumption stats don’t so much show decoupling as demand destruction. In which case, what we’re seeing here is not evidence that the economy can transcend physical boundaries, but the opposite: growth is already at risk from rising prices, and we’re only making up the shortfall by taking on debt.
Either way, Chris Goodall has dug up some interesting findings, and the ‘peak stuff’ paper is well worth a browse if you’re so inclined.
The Earthbound Report 
I’ve been reading Prosperity Without Growth which talks at length about decoupling and its fallicies. Whilst I agree that there has been a decoupling effect brought on by speculative markets, this is entirely fake. The real economy that underlies our country has been getting smaller, and ordinary people have been suffering as a result, in astronomical house (and other) prices brought on by the speculators, who are getting richer and richer at the expense of the many.
We must be careful, whilst we burst the speculative bubbles, not to encourage the growth of material throughputs. This would be done through removing subsidies for fossil fuels, bringing fuel prices in line with the real price the world has to pay for them and directing capital to increase resource efficiency, rather than prop up inefficient structures. We need austerity measures, but we need them in things which increase our material consumption, not in things like the NHS, where the expenditure is mostly on human resources.
Absolutely, I think many of the growth stimulating measures being pursued at the moment at counter-productive in sustainability terms – most notably the cutting of petrol tax. Promoting resource-intensive forms of consumption is a pointless exercise because of rising international prices, quite aside from the environmental side.
Service-based consumption such as health and education are wiser places to be investing, which is why it’s a shame that the schools for the future programme and universities have been pushed to one side.
That’s because most of our growth was in financial services and other intangibles, not in manufacturing or anything which requires materials.
It seems to me that this is an apparent effect that has a lot to do with how GDP is measured. And as you say, Jeremy: a lot of that “growth” was driven by the city, by speculations, and it is difficult to assess if – and in what magnitude – those speculations on the global market resulted in an increased material throughput and resource consumption elsewhere. Ultimately the global balance is all that counts.
And from the physical point of view: economic growth and energy/resource use cannot be de-coupled. Thermodynamics stands in the way. You cannot make, alter or move something without using energy and/or material. The relationship can be changed by increased efficency (sending an MP3 via iTunes costs fewer resources than pressing and shipping an old record etc.), but it is always far from zero. Let us presume material throughput would go down to zero, while growth continues: what, then, would be growing? But regarding the Itunes example: one company makes money, but the postman lost his job. So did the record presser. etc. They need to earn their money elsewhere to meet their material needs.
Yes, it’s a mixed picture, and you’re right to point out that the global balance is all that matters. The paper celebrates our decline in materials use, but that will have been overwhelmed by the increase globally. There’s this odd idea out there that growth is the thing that we all need, because it will move economies onto services and lower their materials use and pollution. That only works for individuals – we can’t have every country in the world running a service economy, or there’s no one to stitch our clothes or assemble radios.
Even a service economy cannot experience unlimited growth. For one most services quite simply are not really needed. But even if we would want to take advantage of every service we can get hold of, there is a simple limit to that: time. Enlisting a service provider or consuming an immaterial good (e.g. a computer game, a movie) always costs time. It is entirely pointless to offer more services (most of which nobody needs) and immaterial goods than there is actual consumer time to consume them. In recent years a new catchword appeared here in Germany: Konsumverweigerer. A term that sounds like a criminal offence. It means, literally: “Consumption refuser” and refers to individuals (like me) who just keep refusing to spend money on things they absolutely have no use for. And the likes of me are considered a problem for the economy – for the well being of all. “Inlandkonsum ankurbeln” (literally “crank up domestic consumption”) still is presented as one of the main mainstream policy goals. In this context I keep thinking of Douglas Adams who foresaw this development: his solution to the limited time problem were videorecorders who watch the videos for us. I once wrote a short story where answering machine answering machines played a major role. We have to invent machines to begin a new era of consumption to keep up growth!