15 Decoupling

15.1 Ecomodernism vs Ecosocialism

Angus

John Bellamy Foster, author of Marx’s Ecology and many other ecosocialist books, has taken up the subject in depth. In “The Long Ecological Revolution,” a masterful article in the November issue of Monthly Review, he writes:

“No revolutionary movement exists in a vacuum; it is invariably confronted with counterrevolutionary doctrines designed to defend the status quo. In our era, ecological Marxism or ecosocialism, as the most comprehensive challenge to the structural crisis of our times, is being countered by capitalist ecomodernism — the outgrowth of an earlier ideology of modernism, which from the first opposed the notion that economic growth faced natural limits. If ecosocialism insists that a revolution to restore a sustainable human relation to the earth requires a frontal assault on the system of capital accumulation—and that this can only be accomplished by more egalitarian social relations and more consciously coevolutionary relations to the earth — ecomodernism promises precisely the opposite. ….

“It is dispiriting but not altogether surprising that some self-styled socialists have jumped on the ecomodernist bandwagon, arguing against most ecologists and ecosocialists that what is required to address climate change and environmental problems as a whole is simply technological change, coupled with progressive redistribution of resources. Here again, the Earth System crisis is said not to demand fundamental changes in social relations and in the human metabolism with nature. Rather it is to be approached in instrumentalist terms as a formidable barrier to be overcome by means of extreme technology. …

“If this stance is ‘socialist,’ it is only in the supposedly progressive, ecomodernist sense of combining state-directed technocratic planning and market regulation with proposals for more equitable income distribution. In this vision, ecological necessities are once again subordinated to notions of economic and technological development that are treated as inexorable. Nature is not a living system to be defended, but a foe to be conquered.”

Angus (2017) John Bellamy Foster on Jacobin and Ecomodernism

15.2 Environmental Decoupling

Decoupling: the end of the correlation between increased economic production and decreased environmental quality.

Conclusion

The needed decoupling does not occur! Not GLOBAL, not FAST-ENOUGH, not LONG-ENOUGH.

Decoupling as a main or single strategy to combine economic and environmental aims should be judged as taking a very large risk with our common future.

The claim that the economy can grow while at the same time the “environmental bads” diminish needs further support from sources other than empirical research literature. The claim needs to be supported by detailed and concrete plans of structural change that delineate how the future will be different from the past.

Memo

Distinctions between impact and resource decoupling, and relative and absolute decoupling are a staple in the literature. Decoupling the growth of economy can be discussed in terms of resource use (resource decoupling) or environmental impact (impact decoupling).

An important conceptual distinction to be made is between absolute (strong) and relative (weak) decoupling. Relative decoupling means that economic growth is faster than the growth of environmental da- mage or resource use, even though the latter may still be growing.

Absolute decoupling, in turn, means that the economy is growing while the amount of resource use and/or environmental impact is decreasing. relative decoupling does not necessarily lead to ab- solute decoupling. Relative decoupling due to, for instance, increased material efficiency, may continue for long periods of time without ever turning into absolute decoupling.

Relative decoupling is, by definition, connected to increased impacts and/or resource use, so in order to evaluate the pertinence of evidence of relative decoupling it is neces- sary to investigate what are the structural reasons for the relative de- coupling, and find out if they are such that they can continue and in- tensify into absolute decoupling.

Local decoupling does not necessarily entail global decoupling. Decoupling become problematic when outsourcing and trade are taken into account

Making decoupling a continuous phenomenon is harder than achieving decoupling for a limited period of time, as continuous decoupling entails permanent changes in structures of production. Only long-enough periods of analysis provide reliable information on prevailing trends.

One of the problems widely discussed with relation to sectoral decoupling is the phenomenon of rebound or so-called Jevons’ paradox.

It is easy to achieve resource decoupling in comparison to impact decoupling. An economy may relatively easily replace a harmful substance, such as ozone-depleting CFC gases, and thus be absolutely decoupled from the specific impact. Indeed, such a decou- pling may be achieved by increased material use, if the use of the re- placement demand more resources, such as energy. In contrast, a de- crease in resource use, whether in terms of DMC or TMR or something similar, demands a wider-reaching change in the functioning of the economy.

Decoupling CO2 emissions from GDP can very well coexist with unsustainable environmental impacts and resource use

Decoupling is a measure of ecological efficiency, not one of sus- tainability: even an absolutely decoupled economy can transgress pla- netary boundaries either through its impacts or its resource use.

Moreover, as climate change threatens to pass the tipping points after which efforts of mitigation become harder (Lenton, 2011; Lenton et al., 2019), the decoupling of CO2 emissions from economic growth has to be sufficiently fast.

The most common case of absolute decoupling reported (50 articles) is between CO2 emissions and economic growth. It is important to notice, that none of these 50 studies explicitly study the possible effect that trade and outsourcing have on national emission and GDP.

The literature finds evidence of impact decoupling, especially between GHG emissions (such as COX and SOX emissions) in wealthy countries for certain periods of time, but not of economy-wide resource decoupling, least of all on the international and global scale. Quite the opposite: there is evidence of increased material intensity and re-cou- pling.

Vaden (abstract)

The idea of decoupling “environmental bads” from “economic goods” has been proposed as a path towards sustainability by organizations such as the OECD and UN. Scientific consensus reports on environmental impacts (e.g., greenhouse gas emissions) and resource use give an indication of the kind of decoupling needed for ecological sustainability: global, absolute, fast-enough and long-enough. This goal gives grounds for a cate- gorisation of the different kinds of decoupling, with regard to their relevance. We conducted a survey of recent (1990–2019) research on decoupling on Web of Science and reviewed the results in the research according to the categorisation. The reviewed 179 articles contain evidence of absolute impact decoupling, especially between CO2 (and SOX) emissions and evidence on geographically limited (national level) cases of absolute decoupling of land and blue water use from GDP, but not of economy-wide resource decoupling, neither on national nor international scales. Evidence of the needed absolute global fast-enough decoupling is missing.

Vaden 2020 Decoupling for sustainability (pdf)

15.3 Technological Decoupling

Cerdeiro

Technological decoupling—broadly defined as the undoing of cross-border trade in high-tech goods and services—has been associated with concerns about intellectual property protection, data privacy, and national security concerns as well as a renewed attention to industrial policies. However, surprisingly little is known about what such strategies might entail for the affected economies. News reports have highlighted the political economy motivations for decoupling and mapped out the unravelling of ties (Webster, 2020), with few attempts to quantify their economic impacts. The academic literature has so far focused predominantly on theoretical aspects of technological decoupling (Garcia-Macia and Goyal, 2020 and references therein) and innovation and research and development (R&D) spillovers (Cai and others, 2019). This paper aims to help fill this gap by providing a taxonomy of channels through which decoupling can affect economic activity and embedding these different layers in a global quantitative macroeconomic model to assess the effects of various scenarios.

Barriers to trade in high-tech sectors between major economies could have profound effects on world production and consumption patterns because they affect some of the fastest growing sectors in most economies and high-tech production is heavily dependent on cross-border trade.

To help quantify the economic effects of technological decoupling, this paper considers three possible channels, focusing on the production and trade of goods that are themselves reliant on innovative intellectual property, particularly in information and communication technology sectors (“high-tech” goods).

• The short- and long-term reduction in global trade flows, whereby rival countries impose higher non-tariff barriers (NTBs) to eliminate the relative demand for high-tech imports, a direct effect that is compounded by domestic investment and consumption responses to the resulting permanent income losses. 2 These effects are quantified using the IMF’s Global Integrated Monetary and Fiscal model (GIMF).

• The long-term impact on output of sectoral misallocation, that is, the less efficient allocation of resources across sectors as trade is cut off between hubs and blocs. These effects are quantified using a sectoral, computable general equilibrium trade model which estimates these effects (Caliendo, Feenstra, Romalis, and Taylor, 2017; CFRT henceforth).

• The short- and long-term dynamics losses because of the effect of lower foreign knowledge diffusion on domestic labor productivity. These effects are derived empirically from data on patents, R&D spillovers, and their productivity effects among technological leaders. Estimates, originally produced for IMF (2018a), are extended here to also include China and Korea.

Technological fragmentation can lead to losses in the order of 5 percent of GDP for many economies.

Cerdeiro (2021) IMF WP721/69 [(pdf)[pdf/cerdeiro_2021_technological_decoupling.pdf)