Resource Flows: The material basis of industrial economies

Currently, countries measure their economic growth and performance through the System of National Accounts (SNA).

These financial accounts measure the total economic transactions in an economy. Indicators such as Gross Domestic Product (GDP) provide information on whether national income is growing or declining.

There is no equivalent system for measuring the physical “transactions” in an economy.

Policy- and other decision-makers have very little idea of the material requirements of modern economies and few indicators of where, or when, physical constraints are likely to be reached.

With the exception of energy efficiency (a strategic resource), very little official attention is paid to the relationship between resource requirements and economic output.

Examining material flows in Austria, Germany, Japan, The Netherlands, and the United States, this report develops model accounts of the complete “material cycle” or the flow of raw materials through the processes of extraction, production, use, and disposal.

The report also documents:

• the relatively modest quantities of materials that are recycled or added each year to stock in use (largely in the form of infrastructure and durable goods),

• the materials that are quickly returned to the environment as pollution or waste, with potential for environmental harm.

The authors argue that the resource efficiency gains brought about by the rise of e-commerce and the shift from heavy industries toward knowledge- and service-based industries have been more than offset by the scale of economic growth and consumer choices that favor energy- and material-intensive lifestyles.