One strand of environmentalism is always eager to see economic growth as inherently unsustainable. It says that all increases in income result in a greater use of the earth’s resources. That line of thinking was clearly represented in George Monbiot’s article yesterday. ‘Production appears to be indistinguishable from destruction’, he wrote gloomily.
He quoted me agreeing with him. Actually, I didn’t. What I said to George was that as countries take off into economic growth, they use vastly more steel, concrete and aluminium to build the infrastructure to house their people and give them transport and other basics of life. Once that period of explosive expansion of resource use is over, a country’s economic growth stops needing ever increasing tonnes of materials. Nations such as Japan and the UK, for example, have seen major cuts in the minerals and fuels that they need. Broadly speaking, for example, once an economy reaches a total level of about 10 tonnes of steel per person it has provided for society’s needs. At the other extreme, even food consumption is tending to fall in the richer economies. (Yes, British people are eating much less than they did).
It’s not just me saying this. UK government data shows a reduction in material use from about 12 tonnes a year per person to around 9 tonnes from 2000 to 2013.
The paper which George uses to buttress his antagonism to economic growth uses a simple method to show that although rich countries are indeed using fewer resources this fall is more than made up by increases in the weight of materials embodied in imports.
There is a single overwhelming reason for this: Chinese urbanisation. In 2008, the last year of the research, China was in headlong growth. Ten of millions of people were moving to cities every year. 10 billion tonnes, or about 15% of the world’s total use of physical materials – fuels, minerals, foods – was being used to build the houses and roads China needed to provide for its people. We tend not to recognise the extraordinary pace of the development China has undergone. Even now, the country is using about 25 times as much cement as America. In 2014 it produced half of the world’s entire production of steel.
In the latter part of the last decade, Chinese exports represented about 50% of its entire economy. The researchers on whom George relies make the crucial assumption that 50% of the steel and concrete used to create new Chinese infrastructure in 2008 should therefore be allocated to exports. All the goods imported into the UK from China bear their share of this embodied allocation.
The argument between George and me therefore comes down to this question. How much of the Chinese investment in steel and concrete, the overwhelmingly dominant materials used in urban growth, should properly be assigned to exports? The inner accountant in me says it is absurd that Chinese exports of consumer electronics in any one year should bear the environmental costs of the growth of cities in that country. China was building up an infrastructure that will last for many decades.
The right calculation to make is to spread the tonnage of construction materials over their period of use, perhaps sixty or more years. But in George’s world the materials used in the building of a flat for a manager at a Foxconn electronics factory should be loaded into the environmental cost of the computer in the year of its construction. In my opinion, this assumption is simply wrong.
Developed economies have almost certainly passed the point of peak use of materials. Even Chinese growth is also slowing. Its steel production grew 3 fold between 2000 and 2014 but it has now peaked and the industry has huge excess capacity. That is why the world steel price has collapsed, putting UK plants at risk.
The world has huge environmental problems. But economic growth in developed economies does not exacerbate them. It makes them easier to solve.