- Reducing environmental stress in a growing economy requires improvements in eco-efficiency larger than economic growth, in order to achieve absolute decoupling. How far and how fast can and should we go; can substantial environmental improvements be realised in combination with economic growth?
Research should indicate the potential for environmental improvement through technological development, under realistic driver scenarios.
- When improving environmental performance in one respect, unreasonable problem shifting, to other environmental impacts, is to be prevented. So some overall measure of improvement is required, taking into account the full supply chains for goods and services and allowing for consumption as well as production.
An explicit normative weighting is required, based on both economic analysis and public discussion.
- Eco-innovation, as a micro-level phenomenon, may first be analysed at a micro-meso system level. What counts, however, is the ultimate effect at a macro level, reckoning with all relevant mechanism involved in implementing the innovation.
How to set up this broader analysis is a challenge, with as yet no well developed methods.
- The link of micro changes to macro level analysis firstly is complicated by constraints, as in resource supply and land availability, and as in allowable total environmental stress for example related to carrying capacity. Next, there are mostly negative feedbacks of a social nature, as through market mechanisms, income effects (“rebound”), as explained in the next point. Only seldom will there be positive feedback mechanisms at a macro level. As a result, seemingly breakthrough micro level innovations will mostly have a much more limited macro level effect, realised with more delays than first expected.
The implications for requirements on micro level improvement are to be analysed.
- Deep eco-innovation, as is required for reduced environmental stress in a growing economy, is constrained absolutely or by delays in time by,
- lack of eco- incentives, or by counter incentives like cheap fossil energy, low material resource prices, and inappropriate taxes;
- by limits in resource supply, partially absolute and partially dynamic, mostly occurring at the aggregate level of overall supply of a resource and its substitutes;
- by income effects inherent in shifts in consumption: for example, shifting from passenger car driving to bicycling will lead to substantially increases in other spending;
- by administrative procedures, as also for safeguarding environmental quality against economic pressures, which delay investments.
The speed of deep eco-innovation is constrained; these constraints have not yet been analysed systematically.
- Economic growth, as the growth of total consumption, is a major threat to environmental quality. Growth of 3.5% per annum doubles the total volume of consumption every 20 years. This growth rate is substantially higher than the rate of population growth, which is dropping sharply with increasing income, communications and contraceptives. Innovation is the driving force of growth in our knowledge based economy, with less emphasis on net investment.
New analysis is required on the drivers of economic growth, to be differentiating between factors for labour productivity growth, to be fostered, and towards absolute growth through labour time growth, to be reduced.
- Improving innovation processes will increase economic growth, and will not necessarily lead to eco-innovation. Corporate sustainability policy can play a role in decoupling, but will tend to put prime focus on economic improvement, as market performance is a sine qua non for their functioning.
The shift from innovation to eco-innovation requires new drivers with an explicit focus on eco-efficiency.
- Increases in income tend to be spent on luxury items like specialty food and travelling, what economists call superior goods. They tend to have a relatively high environmental footprint per unit of expenditure.
The income elasticity of demand is a factor to explicitly take into account when analysing options which imply reduced spending, like cycling against car driving.
- Economic growth is the combination of increased labour productivity and labour volume. Reducing labour productivity is not desirable nor really possible, given our focus on research and development. Reducing economic growth by reducing the volume of labour can give a major contribution to reducing environmental stress.
Barriers to working less and incentives for working less are to be analysed as a major subject for sustainable development.
- Strategies for environmental improvement must be judged against the ultimate improvement in performance realised. Major strategies currently are:
- Low-energy society
- industrial ecology/industrial symbiosis
- high labour intensive – low capital intensive production
A single framework for strategy analysis is required for policy discussion, and to be developed.
- Non-fossil energy production installations mostly are more resource intensive to build than fossil energy systems, which require more input in the use phase. Similarly, energy saving infrastructure, as in buildings and transport systems, will require more materials than cheaper systems which use more energy in operation. This implies that in the transition stage the shift to renewable energy and reduced energy consumption will lead to increased materials use. Very fast transitions might even require additional fossil energy use.
The material limits to change are interrelated and mostly present at a global macro level only. This integrated analysis of dynamic supply constraints is to be developed.
- Solar radiation striking the earth forms the basis for most renewable energy sources. As other species need to use this energy too we should limit our appropriation of it.
The energy requirements of nature are a most fundamental factor in biodiversity development, to be analysed actively in the realm of combined ecology and industrial ecology.
- The amount of capital used in a specific production process, which is its capital or labour intensity, does not indicate a relatively high or low environmental impact per unit of value created.
The role of capital, labour, natural resources and knowledge in sustainable development is to be re-assessed.