Developments in Material productivity (GDP/DMI) (3.1)

Indicator Assessment
Prod-ID: IND-334-en
Created 16 Mar 2012 Published 13 Apr 2012 Last modified 04 Sep 2015
9 min read

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Material productivity in the EU27 increased over the period 2000-2007 at an average annual rate of about 1%. For a short period in time, from 2000 to 2003, even a slight absolute decoupling of material input from economic growth was observed. Over the entire period 2000-2007, however, only relative decoupling occurred, i.e. GDP increased more than DMI. There is thus no sign of a trend towards absolute reduction of material resource use in EU27.

Key messages

Material productivity in the EU27 increased over the period 2000-2007 at an average annual rate of about 1%. For a short period in time, from 2000 to 2003, even a slight absolute decoupling of material input from economic growth was observed. Over the entire period 2000-2007, however, only relative decoupling occurred, i.e. GDP increased more than DMI. There is thus no sign of a trend towards absolute reduction of material resource use in EU27.

3. Is European material productivity improving for key materials?

Developments in Material productivity (GDP/DMI)

Note: A time series of Material productivity in EU27

Data source:
Downloads and more info

Material productivity in the EU27 rose 6% from 2000 to 2003, then decreased in 2004 but increased to slightly above the 2003 level by 2007. Over the entire period 2000 – 2007 an increase of resource productivity of almost 7% was observed.

While the EU27 GDP has continuously increased during the 2000 to 2007 period, the DMI had slightly declined in the first four years until 2003. When economic growth increases, while at the same time DMI is decreasing, this is called 'absolute decoupling' of resource use from economic growth. We observe this type of situation for 2000-2003, though not strongly expressed. From 2003 to 2007, however, the DMI is again increasing together with economic growth showing lower growth level from 2000 (9.6% vs. 17% for GDP) which is a sign of relative decoupling.

However, much of the growth of the GDP was from services industries, so, this apparent decoupling needs to be investigated more closely before any definitive conclusions can be made about making progress in this area (Eurostat 2010). It may be that the material productivity has resulted from an increased outsourcing of finished and semi-finished products of material intensive industries abroad. To reveal such trends a Raw Material Equivalent based indicator would be needed.

Eurostat (2010): Environmental statistics and accounts inEurope. Chapter 2: Economy-wide material flows (Schütz, H. and Hass, J.).Luxembourg: Publications Office of the European Union. 

Indicator specification and metadata

Indicator definition

This indicator shows how much gross domestic product (GDP) is generated per unit of direct material input (DMI) to an economy overtime, derived from the annual quantity of raw materials extracted from the domestic territory (DEU) of an economy plus all physical imports (IMP). 

Units

The Eurostat material flow database (http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=env_ac_mfa&lang=en ) provides the DEU data in units of thousands of metric tonnes.

The Eurostat external trade statistics ComExt (http://epp.eurostat.ec.europa.eu/newxtweb/setupdimselection.do ) provides the IMP data in units of 100 kg.

The Eurostat national accounts database (http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_gdp_k&lang=en ) provides the GDP data in units of millions of euro, chain-linked volumes, reference year 2000 (at 2000 exchange rates).

The derived indicator material productivity (GDP/DMI) is expressed as Euro per kg. 


Policy context and targets

Context description

The question is linked to the concept of eco-efficiency, which dates back to 1992, when it was presented by the World Business Council for Sustainable Development. Since then, it has been widely recognized as a new paradigm, bringing together economic and environmental progress. It aims at minimising resource use, emissions and ecological damage while maximizing efficiency of production to sustain economic prosperity. It is a pillar of resource efficiency and green economy initiatives. OECD calls in its Green Growth Strategy for greater efficiency in the use of resources and natural assets enhancing productivity, reducing waste and energy consumption and making resources available to highest value use. Moreover, it is approved that ‘issue-specific and sector-specific insights […]’ have to be gained to track ‘the implications of a green growth transition’.

On European scale the question is linked to the Europe 2020 Strategy for smart, sustainable and inclusive growth which underlines the relevance of resource efficiency to limit emissions across all sectors of the economy. The flagship initiative a Resource-efficient Europe stresses the importance of ‘resource efficiency as core element of sectoral strategies’ to achieve many of the EU’s objectives, i.e. dealing with climate change and ‘reducing EU greenhouse gas emissions by 80 to 95% by 2050 across all sectors’. Key data on sectoral pressures are also reported mandatorily according to Convention on Long-range Transboundary Air Pollution, EU NEC Directive, Gothenburg Protocol, and the Kyoto Protocol.

The EC Roadmap to a Resource Efficient Europe (EC 2011) proposes a provisional lead indicator - "Resource Productivity" - to measure the principal objective of the Roadmap, of improving economic performance while reducing pressure on natural resources. Recognizing the need to start measuring progress immediately, the Commission proposes using, as a provisional lead indicator, resource productivity, measured by the ratio of GDP to Domestic Material Consumption (expressed in Euro/tonne). To compensate for the limitation in scope of DMC, the Commission intends to complement this indicator by a dashboard of macro indicators on water, land and carbon. New indicators on natural ecological capital and on environmental impacts of resource use should be added as soon as possible (EC 2011 - Working paper Part II).

Targets

There is no precise, numbered target for material productivity.

Related policy documents

No related policy documents have been specified

Methodology

Methodology for indicator calculation

This indicator comprises one figure.

Figure 1 presents data on material productivity expressed by GDP over DMI in EU27. This figure is based on material flows data for DEU sourced from Eurostat (http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/ ), data for imports to the EU27 as quantities from Eurostat (http://epp.eurostat.ec.europa.eu/newxtweb/setupdimselection.do ), and data for GDP of EU27 in chain-linked volumes of year 2000, sourced as well from Eurostat (http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_gdp_k&lang=en ).

First, data for DEU and imports are summed up in units of thousands of tonnes which results in the DMI indicator. Second, GDP values given in the original units of million euros are divided by DMI values which yields the material productivity expressed by GDP/DMI in units of Euro per kg. 

Methodology for gap filling

No gap filling was done

Methodology references

No methodology references available.

Uncertainties

Methodology uncertainty

No uncertainty has been identified in the methodology used by the EEA to process the source data.

Data sets uncertainty

With regard to the material flows part (DEU and imports), refer to various information on data uncertainty at the Eurostat websites and in particular to the Compilation Guidelines for Eurostat's 2011 EW-MFA questionnaire: (http://circa.europa.eu/Public/irc/dsis/pip/library?l=/material_accounts/questionnaire_2011/2011_2011_corrected_2011/_EN_1.0_&a=d.)

With regard to GDP, refer to the data section of the Eurostat website of National Accounts:

http://epp.eurostat.ec.europa.eu/portal/page/portal/national_accounts/data

Rationale uncertainty

The policy question is asking for productivity trends for individual material types and not just for material use as a whole. Unfortunately, indicators calculating material productivity for individual material types i.e. biomass, metals, non-metallic minerals and fossil fuels arte not currently available. This would require allocating output from particular industries to use of individual material types. This is a potential future indicator.

In addition, the indicator is restricted to direct material input; it does not include indirect material use caused by Europeans through production of imports for domestic production. For a more meaningful comparison, this material flow indicator should be extended in the future towards raw material equivalents in the first step (with data currently being prepared by Eurostat) and towards total material resources requirement (TMR; i.e. including unused materials extraction) in the second step, in order to indicate possible shifts of resource use and associated environmental pressure via increased imports from foreign countries. The then derived indicator GDP/TMR could show material resource productivity of the EU27 with regard to its global use of total material resources. 

Data sources

  • No datasets have been specified.

Metadata

Topics:

information.png Tags:
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DPSIR: Pressure
Typology: Efficiency indicator (Type C - Are we improving?)
Indicator codes
  • SCP 043
Temporal coverage:

Dates

EEA Contact Info

Almut Reichel
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