Environmentally relevant structural change: Empirical analysis
Environmental benefits of structural change
Before dealing with the option of accelerating environmentally benign structural change in the economy, it is necessary to consider ways to describe such processes, especially with respect to international and intertemporal comparisons.
Structural change as a continuous shift of labour, capital, and skills to more intelligent uses can also be conceived of as a process of successive delinking: the contribution of traditional factors to the national product decreases whilst the contribution of other factors increases - i.e. they tend to change or lose their function over time. This chapter is concerned with the environmentally relevant factors (sectors) in this process.
Focusing on the four factors described above, figure 1 illustrates such delinking from the growth of the gross domestic product (GDP), taking the Federal Republic of Germany as a first example. The delinking of energy and weight of freight transport from the GDP became apparent by the end of the 1970s, while for cement this process began in the early 1970s; for steel consumption, delinking had already begun in the 1960s.
In the Federal Republic of Germany, structural change generated environmentally benign effects in various ways:
Each of the sectors discussed above would of course need to be examined in greater detail, a step that cannot be undertaken here. One of the ensuing methodological questions is whether or not a different set of indicators would offer a more thorough understanding of environmentally relevant structural change in the economy. 18 The international comparison of the energy and materials side of nearly all the industrial countries, as well as the intention to establish a respective typology, however, seems to justify our concentration on the four indicators chosen for this study.
Environmental protection through resource economy
Figure 2 shows that some delinking was also taking place in the (former) German Democratic Republic (GDR), though it was different in scope and time.
Unlike the FRG, the GDR long continued to rely on the industrial sector, particularly on polluting heavy industry, as the main source of economic growth, while the development of the service sector was woefully neglected. Regarding energy and steel consumption, a slow process of delinking had begun in the early 1970s, but structural change in terms of a "materials economy" was modest. While, according to political rhetoric, increased energy and materials productivity was considered to be the "most important way of reducing the burden on the environ ment," practice fell short in implementing this concept.
In addition, the genuine relief of environmental stress can occur only if an absolute reduction in the relevant energy and materials inputs is achieved. The reduction in the GDR was not very significant, even in relative terms.
Changes in structural environmental impacts: East-West comparisons
The differing scales of GDP and of energy and materials consumption within the national economies have not yet been considered in this chapter. This, however, is important since a process of active delinking would generally be achieved more easily where energy and materials consumption were already at a high level. For active delinking, three aspects (or types) of environmental impacts of production and consumption have to be differentiated: (a) absolute environmental impact; (b) impact per capita; and (c) impact per unit of gross domestic product (GDP).
With regard to the absolute impact (a), it is the change over time that is of interest. Without reference to the size of a country, its population and output, however, the absolute impact does not lend itself to international comparisons. Such comparisons only become feasible if one uses the per capita impact (b) and/or the impact per unit of GDP (c).
In a first round, we computed an aggregated environmental impact index, consisting of the per capita impacts of consumption of primary energy and crude steel, freight transport weight and cement production for all the countries under investigation. In computing the index, equal weight was given to the four indicators, marking the deviation from the mean value of all countries for 1970 and 1985. Thus the relative position and the patterns of change of the countries can be observed. The results of the computations are presented in figures 3, 4, and 5. (The abbreviations used are the international signs for motor vehicle licences.)
As figure 3 shows, in 1970 there was a significant relationship between a country's per capita GDP and the structural impacts on its environment regarding the four selected indicators (sectors). The correlation coefficient for the aggregated environmental impact index and the per capita GDP was 0.76 for all the countries considered. This means that around 1970 the national product of the industrial countries was still strongly based on "hard" production factors (high volume production).
Countries with high environmental impacts per capita (see figure 3) were Sweden (S), the United States (USA), the Federal Republic of Germany (D), Czechoslovakia (CS), Canada (CDN), Norway (N), Switzerland (CH), Japan (J), Belgium (B), and even Finland (SF). In the lowest third of the scale were Hungary (H), New Zealand (NZ), Romania (R), Spain (E), Greece (GR), Ireland (IRE), Yugoslavia (YU), Portugal (P), and Turkey (TR).
During the 1970s and the early 1980s, this relationship between economic performance (GDP) and structural impacts changed considerably. The correlation coefficient in 1985 was at only 0.31, significantly below that of 1970; figure 4 shows the new picture. This means that the process of structural change in several countries reduced the importance of the "hard" factors (high volume production) in the economy.
Accordingly, the position of several countries has improved over time. This was especially true of Sweden, but also of the Federal Republic of Germany, France, the United Kingdom, and the United States. In contrast, the placing of several other countries has deteriorated. This was especially true of Greece, but also of Bulgaria, Romania, the USSR, and Czechoslovakia. The group with the highest structural environmental impacts by 1985 was led by member states of the (former) COMECON, namely Czechoslovakia, the USSR, the German Democratic Republic, and Bulgaria; Western industrialized countries showed up in the second (Canada), sixth (Greece), seventh (Finland), and eighth (USA) position, respectively. Japan, despite its improved position, was still in the top half of the scale.
The dynamics and the international pattern of structural change from 1970 to 1985 are indicated in figure 5, which is derived from figures 3 and 4. The main message here is the variation in the direction of change. In the group of low- and medium-income countries (among the industrial countries), two different patterns emerged: increasing environmental impacts, on the one hand, and stabilizing or decreasing environmental impacts on the other (see figure 5).
The fact that economically advanced Western industrial countries occupied leading positions as regards per capita environmental impacts in 1970 may not be so surprising as it seems at first glance. At that time, Sweden, the USA, and Japan, being confronted with high pollution loads and partly with environmental crisis, had to recognize the need for sweeping environmental protection measures. The fact (by contrast) that Czechoslovakia was "leading" in 1985 indicates the problematique of that country's economic structure. At that time, Czechoslovakia's energy consumption per unit of GDP was more than 50 per cent higher than in most other countries, and specific steel consumption was actually twice that of countries with comparable levels of GDP.
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