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Erschienen in:
The Limits of Resource Use and Their Economic and Policy Implications Kapitel lesen Erstes Kapitel lesen

2014 | OriginalPaper | Buchkapitel

9. Changing the Priorities: From Labour Productivity to the Efficiency in the Use of Resources

verfasst von : Aldo Femia

Erschienen in: Factor X

Verlag: Springer Netherlands

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Abstract

This article argues in favour of including a drastic increase of natural resources use efficiency (RE) among the primary goals of society, with a higher priority level than that of increasing labour productivity (LP). This need is connected to that for a change of the way we look at natural resources (NR) use as well as at its final results. This change of perspective has impact on the very definition of RE. Indeed, RE should not be identified with resource productivity (RP), as RP expresses nothing more than the efficiency with which NR are used in production, regardless to the well-being implications of how production takes place, and of which “needs” does it satisfy. RE is thought in this article as of a more general ability to generate socially desirable results from NR use. The narrow-minded identification of the desirable effects of NR use with production’s economic value – represented by GDP in the numerator of RP – implies an inherently un-solvable trade-off between saving what remains of nature and keeping high living standards. A drastic reduction of NR use is necessary for sustainability; as a consequence dematerialisation should be an overarching goal of policy. Given these premises, drastically enhancing RE is, almost by definition, the only way to reconcile well-being and dematerialisation. This does a-priori not imply a decrease nor an increase of GDP, but requires radical structural changes of the way society is organised to respond to individual and social needs. An ecologically rational policy would strive to transform LP increases into non-working time, rather than into more production. This is one key element of the many far-reaching changes that are necessary in all aspects of the socioeconomic framework to drastically enhance RE. Well-being should be pursued, and not just defined and measured, beyond GDP, by active economic and non-economic policies, encouraging the emergence of new social, institutional and organisational arrangements that enable people to live less resource intensive – but possibly happier – lives. This requires that the domain where rational social choice rules, as opposed to competition and finance, be substantially expanded.

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Vorheriges Kapitel The Challenge of the Whole: Creating System Policies to Tackle Sustainability
Nächstes Kapitel Establishing and Strengthening Markets for Resource Efficient Products and Services
Fußnoten
1
See, e.g. OECD and UNEP work on “resource efficiency” (OECD, nd; UNEP, nd and 2012), as well as the European Flagship initiative on a “Resource efficient” European Commission (EC) (2008, nd).
 
2
For an analysis to be normatively relevant and substantial it is necessary that the notions used have empirical content (see on this, among others, the works by K. W. Kapp, which provide a fundamental reference under many respects; e.g. Kapp 1963, 1970, 1974, 1976, 1977). In the present article we tried to respect this requisite, though the general nature of the argumentation might sometimes conceal this. For the definition and measurement of the socially valuable outcomes of the socioeconomic process, please allow us to refer generically to the ancient, recently revived, debate on well-being and its measurement, including sustainability as an essential dimension. Luckily enough, indeed, the use of GDP for representing all possible socially desirable goals has finally been put in question also in high level policy and official statistics circles (Stiglitz et al. 2009; EC 2009, OECD), so we need not feel uneasy in trying and go down the whole road beyond GDP by drawing the normative consequences of this “paper revolution”.
 
3
In principle, any of the ways in which socio-economic systems take advantage of the functions of nature may be thought as of the use of a natural resource. For instance, in the Thematic Strategy on the Sustainable use of natural resources and management of wastes (TS-SUR), natural resources are defined as “including raw materials such as minerals, biomass and biological resources; environmental media such as air, water and soil; flow resources such as wind, geothermal, tidal and solar energy; and space (land area)” (EC 2003, p. 8–9 and EC 2005, p. 3). This broad definition of resources makes the concept of scarcity applicable also to the functions of the natural environment. For an early conceptualization along these lines, see Hueting (1980).
 
4
Advocates of the so-called “green economy” claim that it is only a matter of investments.
 
5
The “green economy” literature provides, along with official policy documents, textbook examples of how potentially revolutionary concepts tend to be encapsulated and mixed up in mainstream thinking, where they are in the long run neutralized so that eventually business as usual, after some maquillage, may continue to prevail. To make an example from an otherwise very advanced work, according to UNEP (2012) a green economy is defined as “one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”. However, “major components of well-being and social equity in connection with green economy policy interventions may include: employment, the growth of the environmental goods and services sector (EGSS), total wealth including human capital, natural capital and produced capital, access to key resources such as clean energy, water and sanitation, and health. Investing in clean technology, for example, is expected to generate jobs and income from the growth of the EGSS. Investing in ecosystem restoration is expected to enhance the value of natural capital, while training in green skills will help build human capital, adding to the total wealth of nations”. The terms and captions in bold (the emphasis has been added) point more to a shift in the conception of well-being from identification with short-run monetary income to permanent real income than to a radical change of perspective. This is a great progress, but not a sufficient one in our view.
Coming back in particular to resource efficiency, also in UNEP’s quoted document it is represented by Energy productivity (Btu/USD), Material productivity (ton/USD), Water productivity (m3/USD) and CO2 productivity (ton/USD).
 
6
See e.g. the most popular approach to human capital measurement (Jorgenson-Fraumeni).
 
7
Three types of problem shifting may be distinguished: in time (e.g. avoiding now air emissions by creating radioactive pollution for later), in space (e.g. changing the location of a polluting industry) and between resources (e.g. avoiding the use of one resource by using up another one).
 
8
To be precise, EW-MF-based measures are not independent from problem shifting in time, since they refer to current flows only; however, within the limits of the underlying definition of “resources”, Domestic Material Consumption (DMC) – which has been adopted by the EU (see EUROSTAT; nd) for the calculation of the resource productivity indicator used in the monitoring of the European sustainable development strategy – is in principle not influenced by shifting between resources (but for the unlikely case of substitution of solid materials with water or air), while the measures that consider indirect flows such as Total Material Requirement (TMR) or measures expressed in Raw Material Equivalents (e.g. DMCRME) are independent also from shifts in space. Unfortunately, indicators of the latter kind are not as widely available as DMC: official statistics is not ready to provide the necessary data on the so-called “hidden flows”, and the investments in developing the necessary tools are scanty.
 
9
It should be noted that this is independent of whether and how different materials are aggregated.
 
10
It should be noted that maintaining dematerialisation as necessary only, and not also as sufficient, does not subtract from its importance as a normative concept.
 
11
Standard economics maintains that the ultimate result of the use of resources is satisfaction of needs and that this is reflected in economic value; it then attaches to this some unwanted side-effects called negative externalities, by whose monetization it tries to close the self-referential mono-dimensional circle of its reasoning. Indeed, the concept of externality refers not to environmental degradation phenomena considered per se, but to unintended interferences of one economic agent’s deeds in the utility functions of other economic agents. Environmental degradation phenomena, per se, may be much more or much less significant for the functioning of nature than for economic agents’ utility, and are therefore ontologically not representable by monetary values.
 
12
“aiming at ensuring that the consumption of resources and their associated impacts do not exceed the carrying capacity of the environment and breaking the linkages between economic growth and resource use” (European Parliament and Council 2002, p. 12).
 
13
“Environment policy needs to move beyond emissions and waste control. It is necessary to develop means to identify the negative environmental impacts of the use of materials and energy throughout life cycles (often referred to as the cradle to grave approach).
It is also not sufficient to look at life cycles in geographic isolation. […] informed policy-making requires knowledge of how resources move through the global economy, what drives this and what the impacts are wherever the resources are extracted and used” (EC 2005, p. 5).
 
14
As far as the metrics are concerned, reference was made to a simplistic interpretation: “it is clear that taking resource use as a proxy for environmental impacts is not the way to proceed” (EC 2003, p. 11).
 
15
Some passages are highly representative of a way of reasoning that is a-priori dismissive of dematerialisation policy: “At present the environmental impacts of using non-renewable resources like metals, minerals and fossil fuels are of greater concern than their possible scarcity. […] The Resources Strategy should therefore focus on reducing environmental impacts, thus enabling growing economies to use resources efficiently, from both an economic and an environmental point of view. This de-linking – commonly called decoupling – of impacts from growth is the overarching goal to which this strategy will contribute” (EC 2003, p. 4).
By the way, scarcity has meanwhile become a serious worry for the EU; this concerns at the moment some specific materials (e.g. rare earths), but it can be foreseen that it will soon expand.
“[…] if we focus on reducing the environmental impacts of resource use, the appropriate policy response would be to ensure that resource use does not lead to unacceptable environmental degradation. This response would include the promotion of clean technologies and more eco-friendly consumer products. Although in certain cases, e.g. through more recycling or more resource-efficient design, this could reduce the quantity of resources used, this would be a consequence rather than an explicit objective of the policy” (EC 2003, p. 10).
 
16
The quoted study is aimed at responding to some questions that are at the core of the present article’s concerns: “Can companies spur their competitiveness and can the EU as a whole enhance its competitiveness through improving material efficiency and through developing new products and services that lower the overall resource intensity?”; “The policy-oriented aim of the current report thus is to align the economic interest in cutting material purchasing costs and innovation with the environmental issue of reducing environmental pressure. The focus on resource productivity can be seen as advantageous in that regard, since resources are used in all industries and productivity is a key concept for economic development”; “Our report seeks to test the hypothesis, that resource productivity leads to an enhancement of competitiveness through lowering material purchasing costs and through developing new products and services that lower the overall resource intensity” (p. 7).
 
17
Total labour productivity, i.e. the GDP generated per unit of labour input, is identical to per capita income times the working effort intensity of the population, with the latter defined as the ratio between the labour input to production and the total population: GDP/L ≡ (GDP/P)*(P/L). The latter ratio depends on the demographic structure, the employment rate and the daily working hours. Total labour productivity may grow because the quality of labour used in the production process increases, because capital is made available in greater quantity or better quality or is used more intensively, and because greater overall efficiency is attained in how these factors are combined in production, as to obtain a bigger or better output (multi-factor productivity). Changes in the composition of the economy by kind of activity imply changes of total labour productivity at the economy-wide level since different activities have different levels of labour productivity.
 
18
This penetration ability is itself due to the production efficiency, which in turn increases also as a consequence of the expansion of the market.
 
19
See for instance Pasinetti (1981).
 
20
At present, especially in Europe, one of the policies mentioned (saving banks) has fired back. After these costly operations, deficit spending has been declared to be the worst of sins, and as a consequence the “produce more” case is not prevailing at the moment, which exacerbates all sorts of social problems.
 
21
The quoted report warns that two distortions may derive from the kind of data used to calculate RP and LP. Indeed, it is likely that the increase of RP be overestimated and that of LP underestimated, respectively because of “a shift of resource intense sectors or production processes abroad” and of “a trend towards more part-time employment” (p. 42, footnote). The latter distortion implies a “nominally lower labour productivity compared to a calculation based on man-hours” and an equivalent but contrary distortion (overestimation) of the labour input (L). This results in attributing to a growth in L a responsibility for the growth of GDP, and its consequent effects on R, which really belongs to LP. Indeed, despite RP increased faster than LP in several countries, as already seen only one country, among EU25, Turkey, Japan and the USA was able to reduce DMC in absolute terms.
 
22
Research and debates on the topic are long standing. Just as an example, D. L. Meadows wrote in the preface to Hueting (1980), that “it has become customary to preface national economic policy recommendations with a brief disclaimer acknowledging that Gross National Product (GNP) does not provide an adequate index of social welfare and that GNP growth is neither inevitable nor necessarily always desirable” (also see, on GDP’s meaning and problems, Fuà 1993; for an interesting, politically coherent, point of view, see Mujica 2012). However this debate was mostly relegated, until not long ago, to heterodox circles. The importance of the quoted documents lies not so much in their indubitably highly valuable contents as in the authoritativeness of their authors and promoters. In particular the Stieglitz report’s main substantial contribution should not be looked for as much in the new elements it introduces in the debate as in the systematisation of the issue and of the quite numerous surrounding topics, as well as in some of its conclusions, such as those clarifying that social choices cannot be based on any single indicator.
 
23
This is perfectly in line with the normative approach taken in the present article, which, as seen above, suggests that LP gains should be “sterilised” by transforming them into more leisure or unproductive work rather than into more production. Some radical theorists have gone as far as to adopt the “degrowth” slogan (see e.g. Martinez-Alier 2010). In our view, it may be misleading to consider economic growth per se as it is neither intrinsically good nor bad. The real problem is how to make possible that ecologically and socially rational choices prevail. GDP may grow or fall as a consequence, and if a way to make the system work anyway is found there is no need to be bothered by this too much.
 
24
Indeed, when the same or similar goods are part of the capital stock they are likely to be used much more intensively.
 
25
Recycling alone would be a sufficient alternative if all materials could be recovered from prematurely obsolete goods and if the energy necessary to melt them down could be produced without causing environmental stress. Since unfortunately these possibilities are not real (even in pure theory, as they are dismissed by the second law of thermodynamics), recycling may and must be one part in a general framework of objectives.
 
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Metadaten
Titel
Changing the Priorities: From Labour Productivity to the Efficiency in the Use of Resources
verfasst von
Aldo Femia
Copyright-Jahr
2014
Verlag
Springer Netherlands
Buch
Factor X

Print ISBN: 978-94-007-5705-9

Electronic ISBN: 978-94-007-5706-6

Copyright-Jahr: 2014

DOI
https://doi.org/10.1007/978-94-007-5706-6_9