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Open AccessArticle

Economic Values and Resource Use

IVL Swedish Environmental Research Institute, P.O. Box 210 60, SE-100 31 Stockholm, Sweden
Academic Editor: Francesca Montevecchi
Sustainability 2016, 8(5), 490; https://doi.org/10.3390/su8050490
Received: 11 January 2016 / Revised: 2 May 2016 / Accepted: 13 May 2016 / Published: 18 May 2016
Absolute decoupling of GDP growth from resource use implies that economic output can be increased without simultaneously increasing input. The essential meaning of this proposition is that the economic values that represent the GDP can be realized by increasing resource efficiency. Given that the GDP is first and foremost a measure of economic activity rather than welfare the possibility of absolute decoupling is theoretically limited. This paper demonstrates theoretically and empirically that economic values at the macroeconomic level are fundamentally determined by the use of production factors, primarily labor and physical capital. Technical innovations or efficiency gains increasing utility without raising the costs of production do not add to the GDP unless they stimulate investments in physical capital. Hence the neoclassical notion of productivity is only found to be relevant as a microeconomic concept. In practice, GDP growth is mostly explained by capital accumulation and a key question is whether or not capital accumulation can be decoupled from the use of materials and energy. This will determine the possibility of decoupling of GDP growth from resource use and environmental impact. Alternative measures of progress focusing on welfare rather than economic activity are more likely to achieve absolute decoupling. View Full-Text
Keywords: decoupling; economic values; GDP growth; aggregate production; productivity decoupling; economic values; GDP growth; aggregate production; productivity
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Malmaeus, J.M. Economic Values and Resource Use. Sustainability 2016, 8, 490.

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