3.2.1. Evidence of Success
Five of the selected case studies were evaluated as having achieved absolute decoupling. Only four of these are considered in detail in this paper due to difficulties in assessing the performance of one of the policy mixes in relation to a specific sub-set of resources addressed. Of the four case studies, only one is considered to have achieved absolute decoupling within limits.
Case Study 1: Sustainable Levels of Fish Catch in Iceland
Fish stocks represent a renewable resource if effectively managed. Nevertheless, healthy fish populations have a number of ecological requirements in order to survive and over fishing amongst other pressures can exhaust this valuable resource. Policies to address the sustainability of Icelandic fish stocks represent an example of successful absolute decoupling within limits, distinguishing the evolution of gross economic output of fishing activities, to levels of fish stocks on the other.
Like other industrialised fishing nations in the first half of the twentieth century, Iceland was over-exploiting its fisheries. Numerous international (until 1976) and domestic fishermen competed for shares of the resource, leading to a race to fish, with fishermen over-investing in their equipment in order to compete. This resulted in increased over fishing in the industry when compared to the fish stocks’ capacity to reproduce. By 1973 herring stocks had collapsed with a catch of 10,000 tonnes compared to the highest catches in the mid-1960s (2 million tonnes in 1965) [43
]. Estimated spawning biomass declined from 14 million tonnes in 1950 to less than 2000 tonnes by 1972 [44
]. The collapse was followed by a sharp drop in demersal stock (i.e.
, fish such as cod or haddock which live and feed in the demersal zone) and catch levels of capelin were seriously threatened by overfishing [43
The policy mix evaluated involves three instruments introduced over the course of four decades and in a mostly ad-hoc manner (independently of policy analysis). The three instruments are: total allowable catches (TACs), individual tradable quotas (ITQs) and a resource tax.
The first TAC was set for herring in 1975, divided equally among boat owners. The quota shares were initially not transferable, though this was changed in 1979 at the initiative of the boat owners. With evidence of the success of the herring catch quota system, TAC shares were introduced for capelin in 1980 (with transferability introduced in 1986). Application of the TACs and ITQs to demersal fisheries was more gradual beginning with the introduction of effort quotas in 1977 which lead to harvesting of a maximum number of fish allowable during fishing days, to over-investment in the fleet and overfishing. The system continued until 1983 when the Fisheries Minister was given discretionary power, through a revised Fisheries Act, to issue individual quotas for each vessel in the demersal fisheries. Each vessel was issued a TAC share based on its catch history, quotas were partly transferable and small boats were exempt. A partial redesign in 1985 was replaced in 1990 when effort quotas were abandoned and replaced with a fully transferable system of ITQs, as per other fish stock types.
In 1991, a small “service fee” was introduced on quota holders (fishers) to allay criticisms that the public was not receiving any benefits from the privatisation of the resource and the revenue was used to aid the reduction of the fleet.
In 2002, a resource tax (applying to all species) was introduced, replacing previous levies. The tax was calculated based on a fishing firm’s quota and its economic performance, both for a reference period of 12 months. Total catch value for the year was calculated and deductions made for fuel, wages and other operating costs. Total tax revenue for the given year was charged at 9.5% of this calculation and the tax calculated based on a “per cod-equivalent”, (total tax revenue divided by catch on cod-equivalent kilograms) [45
This policy mix does not have an explicitly stated objective, but the objective of the Fisheries Management Act is “to promote (exploitable marine stocks’) conservation and efficient utilisation, thereby ensuring stable employment and settlement throughout Iceland”. TACs and ITQs serve to limit how much fish can be caught (TAC) and to allocate rights to fisheries through a cap-and-trade mechanism (ITQ).
Since the introduction of the ITQ system, a steady improvement in fish stocks has occurred and there has also been a steady increase in the fishable biomass of cod stock, from 550,000 tonnes in 1992 to around 1.2 million tonnes in 2012. The spawning stock of Icelandic cod is increasing and “is higher than has been observed over the last five decades” with fishing mortality (percentage of the fish stock removed each year by fishing) at an historical low [46
presents the over-exploitation of fisheries resources and the economic performance of the fishing sector (gross output). Over-exploitation is represented by the degree to which Icelandic landings of cod exceed the TAC. The sector’s economic performance has steadily grown over the studied period (1997–2011) while over-exploitation has shown an overall downward trend, stabilising over the past decade at less than 10%. Therefore it can be concluded that absolute decoupling within limits
has been achieved.
The policy mix aimed to improve environmental sustainability as well as to maximise profitability of the exploitation of the resource. Before the introduction of the ITQ system the profitability of the fisheries sector was poor [47
] and the ITQs increased the sector’s efficiency by reducing fishing effort and fishing capital, rebuilding fish stocks, raising the quality of the landed catch and improving coordination between supply of landings and market demand [47
]. The introduction of TACs provided fisheries with the right incentives to improve the profitability of their fishing practices and the ITQs allowed transfer of quotas from less efficient firms to more efficient ones. The Icelandic fishing industry has been profitable since the early 1990s and this is mainly due to increased productivity and higher prices.
Case Study 2: Reducing Fertiliser Use in Denmark
Synthetic fertilisers make a considerable contribution to global agricultural output however disruption to biogeochemical cycles, particularly for nitrogen and phosphorus, threatens marine and terrestrial ecosystems. Nitrogen and phosphorus are finite non-renewable resources furthermore, ecological thresholds have been determined for phosphorus and nitrogen flows into oceans [29
]. Efforts to reduce fertiliser input into the Danish agricultural system provide an example of absolute decoupling
between agricultural production and fertiliser use, but ex-post assessment suggests that this was not achieved within limits, due to impacts on Danish waterways.
In the early 1980s dead fish started to wash up in large numbers on Danish shores and waterways, catching media and political attention [50
] and leading to higher levels of awareness of the degradation of the country’s aquatic environment. As a result, a series of Action Plans were introduced from the mid-1980s starting with the 1985 NPO (Nutrients-Phosphorus-Oxygen) Action Plan, an Aquatic Environment Action Plan launched in 1987 (and revised in 1998 and 2004) and a 1991 Action Plan for Sustainable Development in Agriculture. These Action Plans introduced a series of instruments based primarily on regulatory instruments (e.g., bans, limits and requirements) and supported by financial (including a mineral phosphorus tax on feed and subsidies) and information mechanisms, initially voluntary farm-based fertiliser accounts which became mandatory and linked to tax levels paid [51
]. Bans on direct discharges from manure were introduced, alongside government subsidies for investments in animal manure storage capacity.
Monitoring and review feature strongly in this policy mix and amendments to instruments have been made following effectiveness monitoring of the situation on the ground. This includes the strengthening of targets and introduction of further targets (e.g., on nitrogen leaching reduction; areas of forests, organic agriculture and wetlands) and requirements (e.g., mandatory fertiliser accounts, use of nitrogen fertilisers, requirements for low-nitrogen feed, limits on livestock) [19
Denmark’s policy mix aiming to reduce fertiliser use, has evolved since the first national policy document was published in 1985 and has a strong focus on strategic documents that clearly set out detailed policy objectives (targets to be met by a certain date) and announcing policy instruments to meet these objectives.
Fertiliser use in Denmark has decreased considerably since the 1980s while agricultural production has slightly increased. Average apparent consumption of nitrogenous, phosphate and commercial fertilisers per annum from 1980 to 1990 was 1128 thousand tonnes, which by 2005 reduced to 256 thousand tonnes, while agricultural production rose slightly (from a 1995 baseline index of 98, to around 100–102 between 1998 and 2004 [52
]; where the index used by the OECD in its 2008 Environmental Data Compendium is based on price-weighted quantities of agricultural commodities produced, after deduction of quantities used as seed and feed.
The agricultural land area in Denmark has remained stable at around 2600 to 2700 thousand hectares (a 1990–1992 average of 2788 thousand hectares and a 2002–2004 average of 2656 thousand hectares) [53
]. Figure 3
indicates that Danish fertiliser use has been absolutely decoupled from the agricultural sector’s economic performance and that nutrient use and leaching have reduced. Yet, the graph does not depict the oxygen conditions of Denmark’s waters, which have not improved to the extent required i.e.
, the levels of oxygen in water remain too low for the healthy development of the Danish aquatic ecosystem; there was therefore no decoupling from impacts [54
]. This is considered to be due to a still relatively high intensity of nutrients used per hectare in Danish agriculture compared with other OECD countries [53
], as well as due to increasing temperatures caused by climate change. Hence, despite signs of absolute decoupling of fertiliser use from agricultural production and as temperatures are forecast to increase further, the Danish aquatic environment will continue to degrade if the flow of nutrients is not further reduced to take ecological limits into account.
Case Study 3: More Efficient use of Aggregates in the UK
Aggregates are an essential input to the construction sector and whilst readily available they are theoretically finite. Furthermore, the extractive industries linked to their recovery are often characterised as highly wasteful and disruptive to ecosystems [55
]. The aggregates tax in the UK represents a policy which has absolutely decoupled aggregates consumption from construction output. However, it is difficult to assess if this decoupling has taken place within limits.
A change of national government in 1997 introduced environmental tax reform efforts to internalise externalities associated with environmentally damaging activities. A landfill tax had been introduced the year before by the previous government (at a standard rate of GBP 7.00 per tonne and a reduced rate of GBP 2.00 per tonne for inert waste) and proposals for a levy on aggregates extraction were announced in 1997. In 1998, the Government announced changes to the landfill tax to make it more environmentally effective, including increasing the standard rate and in 2002, the aggregates levy was introduced at GBP 1.60 per tonne (see below for detail of increases both charges). The UK aggregates tax is a tax on sand, gravel, or rock that has been dug from the ground in the UK, dredged from the sea in UK waters, or imported. Secondary aggregates from building and maintenance of highways and waterways are exempt from the levy.
The policy mix which is the focus of this case study is primarily made up of the two charges (the landfill tax and the aggregates levy), supplemented temporarily by an aggregates levy sustainability fund which recycled levy revenue towards environmental improvements to aggregates production and alternative uses of recycled aggregates (from 2002 until early 2011).
Levels of both charges have increased over the years, with the landfill tax showing the most dynamism (against a backdrop of poor UK performance and based on waste management targets set out in various pieces of EU legislation). In 1999, an annual ‘escalator’ to the landfill tax (of GBP 1.00) took effect, lasting until 2004 (with an initial raising of the tax level from the original GBP 7.00/tonne to GBP 10.00/tonne in 1999 and increasing by GBP 1.00/tonne annually to reach GBP 15.00/tonne by 2004); and this escalator was increased (to GBP 8.00) from 2011 to 2014, taking the landfill tax to GBP 72.00/tonne. The aggregates levy was also increased in 2008 (from its original GBP 1.60/tonne to GBP 1.95/tonne) and in 2009 (to GBP 2.00/tonne). A further increase to GBP 2.10 was announced for early 2011 but the increase has been delayed by the current Government [56
illustrates the trend in UK aggregates use against construction output against 1995 baseline levels. Before 1995 these were strongly linked, while from 1995 to 2010 a trend of absolute decoupling can be seen. There is an overall increase in construction output in combination with an overall decrease in aggregates consumption.
While evidence of decoupling is clear, it is difficult to assess whether aggregates consumption has been decoupled within limits because the limits are numerous and complex to assess. Firstly, at a macro scale the quantity of aggregates which can reasonably be extracted is finite. However, these pressures may be more acute at smaller scales of observation, for example on small islands, in specific quarries or when considering minerals with specific qualities. Thirdly, environmental impacts are difficult to assess but potentially significant due to the processes used in mining. Dredging can also disrupt marine habitats, for example by destroying benthic organisms or disturbing critical micro water climates. Fourthly, these considerations for potential limits on aggregates are further compounded when considering that aggregates can also be imported (albeit accounting for just 1% of demand in the UK [58
]); hence international considerations for those aggregates must also be taken into account. Considering these four dimensions, accurately assessing the sustainability of aggregates at a national level requires substantial assessment based on multiple indicators. Even though the policy mix of taxes and a sustainability fund was successful in almost immediately triggering absolute decoupling of the use of aggregates from construction output, with a minimisation of environmentally harmful waste disposal, it is therefore unclear that this was done within ecological limits.
Case Study 4: Reducing Plastic Bag Usein Ireland
Plastics represent a high utility finite fossil-based resource. Single use bags and other disposable plastic packaging items closely linked with consumption are often coupled with economic growth. Critically however, bags which have not been effectively collected by waste management systems accumulate and persist in terrestrial and marine biospheres, with unnecessary and increasingly well understood damage to marine life, as well as wider socio-economic impacts [59
In 2002, Ireland introduced a tax on plastic carrier bags as a means of reducing litter through reduced bag use. Although before the introduction of the tax plastic bags made up a relatively small percentage of litter, the bags were seen as a visible and persistent part of litter in the countryside and along the coast [60
]. The tax is the only ongoing instrument in this policy mix; it was temporarily complemented by public awareness campaigns around the time of its introduction.
Prior to the introduction of the tax, plastic bag use per capita was at 328 bags per person per year. Following the introduction of the tax at EUR0.15/bag, an extremely rapid and pronounced drop in plastic bag use, a reduction of 95% occurred in the space of five months, bringing per capita use to 21 per year. However, during a period of strong economic growth, this per capita use level gradually increased to 30 by 2006. The tax was therefore increased to EUR0.22/bag in 2007, leading to a reduced per capita use of 26 bags per person in 2008; 18 in 2010 [61
]. The aim of the increased rate was to maintain annual per capita use at 21 or fewer bags. It should be noted that the 2008 global financial and economic crisis hit Ireland very hard, so this reduction in plastic bag use cannot be allocated purely to the tax level increase [62
]. Nonetheless, this case study like the previous one dealing with aggregates in the UK, illustrates absolute decoupling
(of plastic bag use from economic growth) achieved through a simple policy mix (mainly a tax and a public awareness campaign).
The more difficult aspect to establish is whether this decoupling addresses ecological limits (notably the levels at which plastic debris pollution poses serious risks for the marine environment). A legal provision was introduced in 2011 to set a ceiling for the tax at EUR0.70 and to allow the tax to be amended once in any financial year. Revenue from the tax is paid into an environment fund to provide funding for recycling centres and other environmental activities, including cleaning up illegal landfill sites; with annual revenues rising from initial figures of EUR 12–14 million to EUR 23.4 million in 2009. This fund could potentially serve the purpose of ensuring that decoupling occurs within limits (e.g., of the levels of plastic pollution which the earth system can tolerate i.e., linked to its impacts on the marine biosphere); however this is as yet not a defined as a policy objective and would require an assessment of multiple national and international indicators.
3.2.2. Learning from Less or Not Yet Successful Experience
A small number of case studies from the DYNAMIX project had not yet shown signs of achieving any decoupling at the time of the ex-post assessment. One of the case studies detailed here addressed carbon dioxide (CO2) emissions (focusing on industrial energy efficiency in Portugal), while another focused on the sustainable use of forests and wood (in Finland).
Case Study 5: Improving Industrial Energy Efficiency in Portugal
Fossil based energy production is closely coupled with economic output in most countries. In the EU, as part of decarbonisation programmes linked to climate change targets, Member States are undertaking initiatives to increase resource efficiency, including in industrial sectors.
Portugal’s industrial energy efficiency policy mix was developed as part of the country’s ongoing contribution to reaching the EU climate and energy targets for 2020; based on the national implementation of EU Directive 2006/32/EC on energy end-use efficiency and energy services (the Energy Services Directive) [63
], which aims to reduce by at least 9% the final energy consumption of all Member States by 2016 (using 2008 as the baseline). Member States were required to submit their planned activities towards the target to the European Commission through National Energy Efficiency Action Plans (NEEAP). The NEEAP evaluated in the case study dates from 2008 and aimed to increase energy efficiency of total final energy consumption by 9.8% by 2015 (exceeding the EU target by 0.8%). Measures targeted all sectors, with 30% of the projected energy savings coming specifically from industry.
Three different instruments were used in the policy mix: an Industry Efficiency System, aiming to promote energy efficiency through modified production processes, new technologies and behaviour change [64
]; green fiscal instruments, particularly taxes and an accelerated depreciation scheme to increase the uptake of energy efficient equipment; and the Energy Efficiency Fund to encourage behavioural change, raise awareness and support energy efficient equipment. Of the three, the Industry Efficiency System was the most constraining, requiring industrial facilities consuming more than 500 tonnes of oil equivalent/year (toe/year) to have regular energy audits [65
], and to develop Energy Consumption Rationalisation Plans (PREns), setting individual facility-specific targets for energy and specific energy consumption as well as energy rationalisation measures [65
]. Following approval by the national government these became strictly binding Rationalisation Agreements for Energy Consumption (ARCEs), linked to exemptions from excise duties on petroleum and energy products according to certain criteria [64
]. The ARCE was also the basis for applying for subsidies for energy audits and investments in energy management and monitoring equipment [64
]. Penalties for non-compliance with ARCE targets were also introduced, with a sum paid for each toe/year exceeded.
Despite the focus on industrial energy use and the synergies between the different regulatory and economic policy instruments, Portugal’s industrial energy use per unit of value added increased slightly between 2000 and 2010 (see Figure 5
). In the same period, Portuguese industrial final energy consumption reduced by 14%. Therefore, apparent energy use reductions appear to be due to a reduction in industrial production, rather than an improvement in energy efficiency. Portugal was amongst the EU countries hardest hit by the international economic and financial crisis and this is likely to explain much of the reduction in energy use. Hence in this case, the economy and energy consumption appear to continue to be coupled.
Case Study 6: Sustainable Use of Forests and Wood in Finland
Forests provide essential ecosystem services and a renewable resource when effectively managed. Excessive deforestation and mismanagement of forests continues to be a key global driver of biodiversity loss, carbon emissions and soil degradation [67
]. In many countries forestry products or land use change contribute significantly to economic output, but the benefits are often coupled with environmental degradation. In Finland, efforts to increase the sustainability of the forestry sector have seemingly failed to decouple the economic performance of the forestry sector from environmental degradation.
The relevant policy mix in Finland aims to enhance and secure the sustainable supply of wood. It was created against a backdrop of international, EU and national efforts at controlling negative environmental impacts of unsustainable forestry management practices and tree-felling levels. This included the Forest Stewardship Council certification scheme at the international level and EU instruments such as the EU Forest Law Enforcement, Governance and Trade (FLEGT), Voluntary Partnership Agreements, the EU Timber Regulation and the Programme for the Endorsement of Forest Certification schemes.
Legislative acts on forestry were developed at the national level, with a strategic programme for the forest sector (2009–2011) and national forest programmes (2010 and 2015). Further voluntary measures were put in place for the certification and labelling of products for example; and financial support was awarded to develop more sustainable forestry practices and innovation projects.
Forests are culturally and economically important in Finland. The forest sector contributes approximately 4% of national GDP and forest industry products represent approximately 20% of Finland’s total export of goods [68
]. Finnish wood removals appear to be within sustainable resource limits (with removals at lower levels than growth). Domestic wood production has increased, yet remains healthily under the annual growth in growing stock. It also appears to have been stable over the past two decades, even though domestic consumption was steadily increasing until the 2008 global economic and financial crisis, particularly for wood fuel [69
Absolute decoupling of wood removal from deforestation in the forestry sector can be said to have been achieved within national sustainability limits (as defined in the Finnish National Forest Programmes). However, the policy mix in Finland has not to date succeeded in decoupling the forestry industry’s economic performance and wood removal, from the global degradation of forests: within planetary limits.
Habitat degradation and biodiversity loss in Finland was reported to continue despite some improvements brought about by the policy mix. This is thought to be due to intensive forestry practices, resulting in reduced ecological integrity and quality of habitats. Furthermore, the policy mix failed to address the substitutability of forestry products with imported goods whose environmental impacts are at least as significant. As wood consumption grew in the country there was a significant increase of imports (a 50% increase from 1990 to 2007), particularly of wood fuel (more than a 400% increase from 1990 to 2007) driven by EU and Finnish renewables targets. Worryingly, much of the wood fuel supply was imported from Russia and there is a suspicion that a large portion of this may be from illegal sources [70
]. In order to achieve decoupling within planetary
boundaries, national measures focusing on internationally traded resources need to address global impacts of resource use, particularly imports.